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: | August 31, 2015 |
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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.
Item 1. Reports to Stockholders.
BofA Funds
Annual Report
August 31, 2015
• 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 | ||||||
Report of Independent Registered Public Accounting Firm | 25 | ||||||
Federal Income Tax Information | 26 | ||||||
Fund Governance | 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.
President's Message
To Our Valued Shareholders:
A year ago the consensus within the financial community was that the interest rate environment would soon be more hospitable to money market fund investors as a strengthening U.S. economy finally moved the Federal Reserve ("the Fed") to raise short-term interest rates. That rate hike has yet to materialize, so for liquidity investors, the most important news out of Washington has come not from the Fed, but from the U.S. Securities and Exchange Commission ("SEC"), which adopted sweeping changes to the regulations governing U.S. money market funds.
To take effect in October 2016, the amendments to Rule 2a-7 under the Investment Company Act of 1940 include two important reforms that are prompting investors to reevaluate their liquidity investment strategies:
• Institutional prime and institutional municipal money market funds must "float" their net asset values ("NAVs"), which means the value of the funds' shares would be based on the market value of their underlying securities. Only government funds and funds serving retail investors—defined as "natural persons"—would retain their stable, $1-per-share NAVs.
• The boards of trustees of non-government money market funds may impose a temporary liquidity fee of up to 2% of the value of a redemption or to suspend or "gate" redemptions temporarily should a money market fund's level of weekly liquid assets fall below 30% of its total assets.
These changes are part of a multi-year effort on the part of the SEC to make money market funds more resilient during market crises, when heavy redemption activity can exert strong downward pressure on funds' NAVs.
After extensive analysis, we have concluded that the impact of the rule changes will be less significant than many investors first believed. With regard to floating NAV funds, for example, fund managers still will go to great lengths to maintain the $1-per-share NAV after the floating NAV rule takes effect. If there is any movement around the $1 mark, that variation likely would be very limited under normal market conditions because of the preponderance of short-term, high-quality securities in money market funds. As for liquidity fees and redemption gates, these measures would be a last resort for fund managers because of the reputational damage money market fund companies would incur were they to impose these measures.
Recognizing the importance of money market fund reform to our shareholders, BofA Global Capital Management has launched a series of whitepapers analyzing the potential impact of the rule changes on clients' liquidity-management programs. These papers are available at www.bofacapital.com. Our preparations for the implementation of the reforms are proceeding, and we anticipate no problems meeting the October 2016 compliance deadline.
Shifting back to the macroeconomic environment, the Fed held the benchmark federal funds rate steady in September, but we believe the drop in the U.S. unemployment rate and steady economic growth should allow the central bank to begin increasing the federal funds rate from the current 0% to .25% rate—in the near future. This, in our view, will mark the beginning of a gradual increase in rates that over time should translate into potentially more attractive yields for money market fund investors. We are positioning the BofA Funds to capture the potential benefits of a rising-rate environment.
Given the complexity of modern financial markets and the ever-present threat of unforeseen investment challenges, the managers of the BofA Funds will continue to employ a conservative investment process designed to achieve your most important goals: principal protection, a high degree of liquidity and competitive risk-adjusted yields. We believe our conservative investment posture; our focus on the management of liquidity investments; and the resources available to us as part of one of the world's largest financial institutions position BofA Global Capital Management to help you reach your liquidity objectives.
On behalf of everyone at BofA Global Capital Management, I thank you for the opportunity to have served you over the past year. We appreciate your business, and we look forward to working with you in the months and years ahead.
Sincerely,
Michael Pelzar
President, BofA Global Capital Management
ARQ5HMRY
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:
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 $1,000. Please refer to the Fund's prospectus for additional details.
3/1/15 – 8/31/15 (Unaudited)
Account value at the beginning of the period ($) | 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 | 1,024.70 | 0.50 | 0.51 | 0.10 | ||||||||||||||||||||||||
Capital Class Shares | 1,000.00 | 1,000.00 | 1,000.00 | 1,024.70 | 0.50 | 0.51 | 0.10 | ||||||||||||||||||||||||
Daily Class Shares | 1,000.00 | 1,000.00 | 1,000.00 | 1,024.70 | 0.50 | 0.51 | 0.10 | ||||||||||||||||||||||||
Institutional Class Shares | 1,000.00 | 1,000.00 | 1,000.00 | 1,024.70 | 0.50 | 0.51 | 0.10 | ||||||||||||||||||||||||
Investor Class Shares | 1,000.00 | 1,000.00 | 1,000.00 | 1,024.70 | 0.50 | 0.51 | 0.10 | ||||||||||||||||||||||||
Liquidity Class Shares | 1,000.00 | 1,000.00 | 1,000.00 | 1,024.70 | 0.50 | 0.51 | 0.10 | ||||||||||||||||||||||||
Trust Class Shares | 1,000.00 | 1,000.00 | 1,000.00 | 1,024.75 | 0.45 | 0.46 | 0.09 |
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
August 31, 2015
Municipal Bonds – 91.7% | |||||||||||
Par ($) | Value ($) | ||||||||||
CALIFORNIA – 91.7% | |||||||||||
CA City of Los Angeles | |||||||||||
Series 2015 | |||||||||||
2.000% 06/30/16 | 5,500,000 | 5,576,416 | |||||||||
CA City of Oceanside | |||||||||||
Shadow Way Apartments LP, | |||||||||||
Series 2009, LOC: FHLMC 0.020% 03/01/49 (09/03/15) (a)(b) | 1,375,000 | 1,375,000 | |||||||||
CA Corona | |||||||||||
Country Hills Apartments, | |||||||||||
Series 1995 A, DPCE: FHLMC 0.020% 02/01/25 (09/03/15) (a)(b) | 4,795,000 | 4,795,000 | |||||||||
CA County of Riverside | |||||||||||
Series 2015 | |||||||||||
2.000% 06/30/16 | 7,000,000 | 7,098,786 | |||||||||
CA Daly City Housing Development Finance Agency | |||||||||||
Serramonte Ridge LLC, | |||||||||||
Series 1999 A, DPCE: FNMA 0.020% 10/15/29 (09/03/15) (a)(b) | 6,700,000 | 6,700,000 | |||||||||
CA Eclipse Funding Trust | |||||||||||
Series 2007 | |||||||||||
LOC: U.S. Bank N.A. 0.030% 05/01/37 (09/03/15) (a)(b)(c) | 3,785,000 | 3,785,000 | |||||||||
CA Fresno | |||||||||||
Multi-Family Housing, | |||||||||||
Wasatch Pool Holdings LLC, Stonepine Apartments, Series 2001 A, DPCE: FNMA 0.020% 02/15/31 (09/03/15) (a)(b) | 4,655,000 | 4,655,000 | |||||||||
CA Golden Empire Schools Financing Authority | |||||||||||
Kern High School District | |||||||||||
Series 2015 0.220% 05/01/16 (09/03/15) (a)(d) | 11,155,000 | 11,155,097 |
Par ($) | Value ($) | ||||||||||
CA Health Facilities Financing Authority | |||||||||||
Series 2011 B | |||||||||||
LOC: U.S. Bank N.A. 0.010% 07/01/41 (09/01/15) (a)(b) | 3,525,000 | 3,525,000 | |||||||||
Stanford Hospital & Clinics, | |||||||||||
Series 2008 B2: 0.110% 11/15/45 (11/04/15) (a)(d) | 7,500,000 | 7,500,000 | |||||||||
0.140% 11/15/45 (12/03/15) (a)(d) | 8,850,000 | 8,850,000 | |||||||||
CA Indio Multi-Family Housing Revenue | |||||||||||
Carreon Villa Apartments, | |||||||||||
Series 1996 A, DPCE: FNMA 0.020% 08/01/26 (09/03/15) (a)(b) | 5,650,000 | 5,650,000 | |||||||||
CA Infrastructure & Economic Development Bank | |||||||||||
Kruger & Sons, Inc., | |||||||||||
Series 2002, AMT, LOC: Bank of the West 0.100% 11/01/28 (09/03/15) (a)(b) | 2,340,000 | 2,340,000 | |||||||||
Le Lycee Francais De Los, | |||||||||||
Series 2006, LOC: U.S. Bank N.A. 0.060% 09/01/36 (09/03/15) (a)(b) | 1,685,000 | 1,685,000 | |||||||||
Prinsco, Inc., | |||||||||||
Series 2008, AMT, LOC: Wells Fargo Bank N.A. 0.070% 05/01/28 (09/03/15) (a)(b) | 3,350,000 | 3,350,000 | |||||||||
Traditional Baking, Inc., | |||||||||||
Series 2003, AMT, LOC: U.S. Bank N.A. 0.090% 08/01/28 (09/02/15) (a)(b) | 1,145,000 | 1,145,000 | |||||||||
CA Irvine Ranch Water District | |||||||||||
Series 2011 A-1, | |||||||||||
0.050% 10/01/37 (09/03/15) (a)(d) | 1,000,000 | 1,000,000 | |||||||||
Series 2011 A-2, | |||||||||||
0.050% 10/01/37 (09/03/15) (a)(d) | 9,000,000 | 9,000,000 |
See Accompanying Notes to Financial Statements.
2
BofA California Tax-Exempt Reserves
August 31, 2015
Municipal Bonds (continued) | |||||||||||
Par ($) | Value ($) | ||||||||||
CA Irvine Unified School District | |||||||||||
Series 2014 B-9-1, | |||||||||||
LOC: Sumitomo Mitsui Banking 0.010% 09/01/54 (09/02/15) (a)(b) | 4,000,000 | 4,000,000 | |||||||||
CA Kern Water Bank Authority | |||||||||||
Series 2003 A | |||||||||||
LOC: Wells Fargo Bank N.A. 0.010% 07/01/28 (09/03/15) (a)(b) | 3,782,000 | 3,782,000 | |||||||||
CA Los Angeles County, Capital Asset Leasing Corp. | |||||||||||
0.070% 11/06/15 | 4,600,000 | 4,600,000 | |||||||||
0.080% 12/11/15 | 3,000,000 | 3,000,000 | |||||||||
CA Los Angeles Department of Water & Power | |||||||||||
Series 2001 B-3 | |||||||||||
SPA: Royal Bank of Canada 0.010% 07/01/35 (09/03/15) (a)(b) | 10,500,000 | 10,500,000 | |||||||||
CA Metropolitan Water District of Southern California | |||||||||||
Series 2015 A1 | |||||||||||
0.010% 07/01/35 (09/03/15) (a)(d) | 6,500,000 | 6,500,000 | |||||||||
CA Monterey Peninsula Water Management District | |||||||||||
Wastewater Reclamation Project, | |||||||||||
Series 1992, LOC: Wells Fargo Bank N.A. 0.030% 07/01/22 (09/01/15) (a)(b) | 1,792,000 | 1,792,000 | |||||||||
CA Northern California Power Agency | |||||||||||
Series 2008 A, | |||||||||||
LOC: Bank of Montreal 0.010% 07/01/32 (09/02/15) (a)(b) | 10,000,000 | 10,000,000 | |||||||||
CA Pittsburg Public Financing Authority | |||||||||||
Series 2008, | |||||||||||
LOC: Bank of the West 0.030% 06/01/35 (09/03/15) (a)(b) | 2,915,000 | 2,915,000 | |||||||||
CA Pittsburg Redevelopment Agency | |||||||||||
Los Medanos Community, | |||||||||||
Series 2004 A, LOC: State Street Bank & Trust Co., LOC: California State Teachers Retirement System 0.010% 09/01/35 (09/01/15) (a)(b) | 4,460,000 | 4,460,000 |
Par ($) | Value ($) | ||||||||||
CA Pollution Control Financing Authority | |||||||||||
Bay Counties Waste Services, | |||||||||||
Series 2014 AMT, LOC: Comerica Bank 0.100% 08/01/34 (09/02/15) (a)(b) | 2,105,000 | 2,105,000 | |||||||||
Pacific Gas & Electric Co.: | |||||||||||
Series 1996 E, LOC: JPMorgan Chase Bank 0.010% 11/01/26 (09/01/15) (a)(b) | 1,000,000 | 1,000,000 | |||||||||
Series 1996, | |||||||||||
LOC: JPMorgan Chase Bank 0.010% 11/01/26 (09/01/15) (a)(b) | 1,600,000 | 1,600,000 | |||||||||
Zerep Management Corp., | |||||||||||
Series 2014 AMT, LOC: Comerica Bank 0.100% 10/01/44 (09/02/15) (a)(b) | 2,650,000 | 2,650,000 | |||||||||
CA RBC Municipal Products, Inc. Trust | |||||||||||
Kaiser Permanente, | |||||||||||
Series 2011 E-21, LOC: Royal Bank of Canada 0.020% 10/01/15 (09/03/15) (a)(b)(c) | 14,100,000 | 14,100,000 | |||||||||
CA Sacramento Municipal Utility District | |||||||||||
Series 2012 L | |||||||||||
LOC: U.S. Bank N.A. 0.010% 08/15/41 (09/03/15) (a)(b) | 14,615,000 | 14,615,000 | |||||||||
CA San Francisco City & County Airports Comm-San Francisco International Airport | |||||||||||
GTY AGMT: Royal Bank of Canada | |||||||||||
0.050% 11/17/15 | 10,000,000 | 10,000,000 | |||||||||
Series 2009 | |||||||||||
LOC: Bank of Tokyo-Mitsubishi UFJ | |||||||||||
0.010% 05/01/26 (09/02/15) (a)(b) | 10,100,000 | 10,100,000 | |||||||||
CA San Francisco City & County | |||||||||||
Certificates of Participation, | |||||||||||
Series 2007 1883, GTY AGMT: Wells Fargo Bank N.A. 0.060% 09/01/31 (09/03/15) (a)(b) | 13,725,000 | 13,725,000 | |||||||||
CA San Jose Redevelopment Agency | |||||||||||
0.170% 02/16/16 | 7,030,000 | 7,030,000 |
See Accompanying Notes to Financial Statements.
3
BofA California Tax-Exempt Reserves
August 31, 2015
Municipal Bonds (continued) | |||||||||||
Par ($) | Value ($) | ||||||||||
CA San Mateo Joint Powers Financing Authority | |||||||||||
Public Safety Project, | |||||||||||
Series 2007 A, LOC: Wells Fargo Bank N.A. 0.030% 04/01/39 (09/03/15) (a)(b) | 10,000,000 | 10,000,000 | |||||||||
CA Santa Clara Valley Water District | |||||||||||
0.060% 11/09/15 | 7,200,000 | 7,200,000 | |||||||||
CA School Cash Reserve Program Authority | |||||||||||
Series 2015 A | |||||||||||
2.000% 06/30/16 | 5,000,000 | 5,069,257 | |||||||||
CA Sequoia Union High School District | |||||||||||
Series 2015 | |||||||||||
1.000% 06/30/16 | 4,000,000 | 4,023,108 | |||||||||
CA Southern California Public Power Authority | |||||||||||
Series 2009 | |||||||||||
LOC: Wells Fargo Bank N.A. 0.010% 07/01/36 (09/02/15) (a)(b) | 6,990,000 | 6,990,000 | |||||||||
Series A-1 2009 | |||||||||||
LOC: U.S. Bank N.A. 0.010% 07/01/36 (09/02/15) (a)(b) | 2,700,000 | 2,700,000 | |||||||||
CA State Department of Water Resources | |||||||||||
0.020% 09/09/15 | 10,000,000 | 10,000,000 | |||||||||
CA Statewide Communities Development Authority | |||||||||||
0.030% 09/03/15 | 7,000,000 | 7,000,000 | |||||||||
Birchcrest Preservation, | |||||||||||
Series 2001 S AMT, LOC: U.S. Bank N.A. 0.030% 08/01/32 (09/01/15) (a)(b) | 955,000 | 955,000 | |||||||||
Kaiser Permanente: | |||||||||||
Series 9B-3 0.140% 10/06/15 | 1,500,000 | 1,500,000 | |||||||||
Series 9B-4: 0.140% 10/07/15 | 7,000,000 | 7,000,000 | |||||||||
0.140% 11/03/15 | 4,000,000 | 4,000,000 | |||||||||
Series 9B-5 0.230% 01/05/16 | 6,250,000 | 6,250,000 | |||||||||
Series K | |||||||||||
0.230% 01/06/16 | 5,000,000 | 5,000,000 | |||||||||
Painted Turtle Gang Foundation, | |||||||||||
Series 2003, LOC: Wells Fargo Bank N.A. 0.010% 04/01/33 (09/03/15) (a)(b) | 1,600,000 | 1,600,000 |
Par ($) | Value ($) | ||||||||||
Plan Nine Partners LLC, | |||||||||||
Series 2005 A, LOC: Union Bank of CA N.A. 0.040% 02/01/35 (09/03/15) (a)(b) | 8,115,000 | 8,115,000 | |||||||||
Rady Children's Hospital, | |||||||||||
Series 2008 C LOC: Northern Trust Company 0.010% 08/15/36 (09/03/15) (a)(b) | 10,850,000 | 10,850,000 | |||||||||
Summit Rose Apartments LP, | |||||||||||
Series 2015 K 0.400% 02/01/17 (08/01/16) (a)(d) | 7,000,000 | 7,000,677 | |||||||||
CA State | |||||||||||
Kindergarten: | |||||||||||
Series 2004 A2, LOC: State Street Bank & Trust Co., 0.010% 05/01/34 (09/01/15) (a)(b) | 8,200,000 | 8,200,000 | |||||||||
Series 2004 A3, LOC: State Street Bank & Trust Co., 0.010% 05/01/34 (09/01/15) (a)(b) | 14,900,000 | 14,900,000 | |||||||||
Series 2003 A-2 LOC: Bank of Montreal 0.010% 05/01/33 (09/01/15) (a)(b) | 6,950,000 | 6,950,000 | |||||||||
Series 2005 A-2-1, LOC: Barclays Bank PLC 0.010% 05/01/40 (09/02/15) (a)(b) | 2,350,000 | 2,350,000 | |||||||||
Series 2013 | |||||||||||
4.000% 10/01/15 | 1,000,000 | 1,003,120 | |||||||||
CA Tender Option Bond Trust Receipts/Certificates | |||||||||||
Series 2015 | |||||||||||
LIQ FAC: JPMorgan Chase Bank: 0.030% 05/15/21 (09/03/15) (a)(b)(c) | 1,900,000 | 1,900,000 | |||||||||
0.030% 04/01/22 (09/03/15) (a)(b)(c) | 2,225,000 | 2,225,000 | |||||||||
0.030% 05/15/22 (09/03/15) (a)(b)(c) | 5,975,000 | 5,975,000 | |||||||||
CA University of California | |||||||||||
Series 2013, | |||||||||||
0.010% 05/15/48 (09/03/15) (a)(d) | 3,300,000 | 3,300,000 |
See Accompanying Notes to Financial Statements.
4
BofA California Tax-Exempt Reserves
August 31, 2015
Municipal Bonds (continued) | |||||||||||
Par ($) | Value ($) | ||||||||||
CA West Covina Community Development Commission | |||||||||||
Lakes Public Parking Project, | |||||||||||
Series 1988, LOC: Wells Fargo Bank N.A. 0.120% 08/01/18 (09/02/15) (a)(b) | 1,715,000 | 1,715,000 | |||||||||
California Total | 371,430,461 | ||||||||||
Total Municipal Bonds (cost of $371,430,461) | 371,430,461 | ||||||||||
Closed-End Investment Companies – 8.3% | |||||||||||
CALIFORNIA – 8.3% | |||||||||||
CA Nuveen Dividend Advantage Municipal Fund | |||||||||||
Series 2014 AMT, | |||||||||||
LIQ FAC: Citibank N.A.: | |||||||||||
0.090% 08/01/40 (09/03/15) (a)(b)(c) | 23,500,000 | 23,500,000 | |||||||||
0.090% 12/01/40 (09/03/15) (a)(b)(c) | 10,000,000 | 10,000,000 | |||||||||
California Total | 33,500,000 | ||||||||||
Total Closed-End Investment Companies (cost of $33,500,000) | 33,500,000 | ||||||||||
Total Investments – 100.0% (cost of $404,930,461) (e) | 404,930,461 | ||||||||||
Other Assets & Liabilities, Net – 0.0% | 135,914 | ||||||||||
Net Assets – 100.0% | 405,066,375 |
Notes to Investment Portfolio:
Portfolio holdings are subject to change periodically and may not be representative of current holdings.
(a) Parenthetical date represents the effective maturity date for the security which may represent the demand date for puttable or callable securities or the prerefunded date for certain securities where applicable.
(b) Variable rate obligations have long dated final maturities, however, their effective maturity is within 397 days in accordance with a demand feature. These securities are secured by a letter of credit or other credit support agreements from banks. These securities are puttable upon not more than one, seven or thirty business days' notice. Put bonds and notes have a demand feature that matures within one year. The interest rate is changed periodically and the interest rate reflects the rate at August 31, 2015.
(c) Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At August 31, 2015, these securities, which are not illiquid, amounted to $61,485,000 or 15.2% of net assets for the Fund.
(d) Variable rate obligations have long dated final maturities, however, their effective maturity is within 397 days in accordance with a demand feature. These securities are puttable upon not more than one, seven or thirty business days' notice. Put bonds and notes have a demand feature that matures within one year. The interest rate is changed periodically and the interest rate reflects the rate at August 31, 2015.
(e) Cost for federal income tax purposes is $404,930,461.
The following table summarizes the inputs used, as of August 31, 2015, 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 | $ | — | $ | 371,430,461 | $ | — | $ | 371,430,461 | |||||||||||
Total Closed-End Investment Companies | — | 33,500,000 | — | 33,500,000 | |||||||||||||||
Total Investments | $ | — | $ | 404,930,461 | $ | — | $ | 404,930,461 |
The Fund's assets are assigned to the Level 2 input category which represents short-term obligations which are valued using amortized cost, an income approach which converts future cash flows to a present value based upon the discount or premium at purchase.
For the year ended August 31, 2015, all of the securities held in the Portfolio were Level 2 and there were no transfers to report.
For more information on valuation inputs, please refer to the Security Valuation section in the accompanying Notes to Financial Statements.
At August 31, 2015, the asset allocation of the Fund is as follows:
Asset Allocation | % of Net Assets | ||||||
Municipal Bonds | 91.7 | ||||||
Closed-End Investment Companies | 8.3 | ||||||
100.0 | |||||||
Other Assets & Liabilities, Net | 0.0 | ||||||
100.0 |
Acronym | Name | ||||||
AMT | Alternative Minimum Tax | ||||||
DPCE | Direct Pay Credit Enhancement | ||||||
FHLMC | Federal Home Loan Mortgage Corp. | ||||||
FNMA | Federal National Mortgage Association | ||||||
GTY AGMT | Guaranty Agreement | ||||||
LIQ FAC | Liquidity Facility | ||||||
LOC | Letter of Credit | ||||||
SPA | Stand-by Purchase Agreement |
See Accompanying Notes to Financial Statements.
5
Statement of Assets and Liabilities – BofA California Tax-Exempt Reserves
August 31, 2015
($) | |||||||||||
Assets | Investments, at amortized cost approximating value | 404,930,461 | |||||||||
Cash | 95,713 | ||||||||||
Receivable for: | |||||||||||
Interest | 119,948 | ||||||||||
Expense reimbursement due from investment advisor | 16,682 | ||||||||||
Prepaid expenses | 3,387 | ||||||||||
Total Assets | 405,166,191 | ||||||||||
Liabilities | Payable for: | ||||||||||
Investment advisory fee | 7,354 | ||||||||||
Administration fee | 5,916 | ||||||||||
Pricing and bookkeeping fees | 9,679 | ||||||||||
Transfer agent fee | 322 | ||||||||||
Trustees' fees | 2,858 | ||||||||||
Audit fee | 35,027 | ||||||||||
Legal fee | 21,225 | ||||||||||
Custody fee | 1,800 | ||||||||||
Chief Compliance Officer expenses | 1,341 | ||||||||||
Other liabilities | 14,294 | ||||||||||
Total Liabilities | 99,816 | ||||||||||
Net Assets | 405,066,375 | ||||||||||
Net Assets Consist of | Paid-in capital | 405,341,403 | |||||||||
Accumulated net realized loss | (275,028 | ) | |||||||||
Net Assets | 405,066,375 |
See Accompanying Notes to Financial Statements.
6
Statement of Assets and Liabilities (continued) – BofA California Tax-Exempt Reserves
August 31, 2015
Adviser Class Shares | Net assets | $ | 6,030,332 | ||||||||
Shares outstanding | 6,029,704 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Capital Class Shares | Net assets | $ | 55,796,618 | ||||||||
Shares outstanding | 55,790,812 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Daily Class Shares | Net assets | $ | 6,720,860 | ||||||||
Shares outstanding | 6,720,160 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Institutional Class Shares | Net assets | $ | 195,589 | ||||||||
Shares outstanding | 195,568 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Investor Class Shares | Net assets | $ | 4,789,867 | ||||||||
Shares outstanding | 4,789,369 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Liquidity Class Shares | Net assets | $ | 10,002 | ||||||||
Shares outstanding | 10,001 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Trust Class Shares | Net assets | $ | 331,523,107 | ||||||||
Shares outstanding | 331,487,999 | ||||||||||
Net asset value per share | $ | 1.00 |
See Accompanying Notes to Financial Statements.
7
Statement of Operations – BofA California Tax-Exempt Reserves
For the Year Ended August 31, 2015
($) | |||||||||||
Investment Income | Interest | 321,183 | |||||||||
Expenses | Investment advisory fee | 554,344 | |||||||||
Administration fee | 276,128 | ||||||||||
Distribution fee: | |||||||||||
Daily Class Shares | 26,670 | ||||||||||
Investor Class Shares | 6,188 | ||||||||||
Service fee: | |||||||||||
Adviser Class Shares | 15,616 | ||||||||||
Daily Class Shares | 19,050 | ||||||||||
Investor Class Shares | 15,469 | ||||||||||
Liquidity Class Shares | 27 | ||||||||||
Shareholder administration fee: | |||||||||||
Institutional Class Shares | 81 | ||||||||||
Trust Class Shares | 287,485 | ||||||||||
Transfer agent fee | 15,514 | ||||||||||
Pricing and bookkeeping fees | 98,609 | ||||||||||
Trustees' fees | 31,391 | ||||||||||
Custody fee | 9,836 | ||||||||||
Legal fees | 98,375 | ||||||||||
Chief Compliance Officer expenses | 7,888 | ||||||||||
Other expenses | 108,223 | ||||||||||
Total Expenses | 1,570,894 | ||||||||||
Fees waived or expenses reimbursed by investment advisor and/or administrator | (878,814 | ) | |||||||||
Fees waived by distributor: | |||||||||||
Adviser Class Shares | (15,607 | ) | |||||||||
Daily Class Shares | (45,709 | ) | |||||||||
Institutional Class Shares | (79 | ) | |||||||||
Investor Class Shares | (21,646 | ) | |||||||||
Liquidity Class Shares | (26 | ) | |||||||||
Trust Class Shares | (287,830 | ) | |||||||||
Net Expenses | 321,183 | ||||||||||
Net Investment Income | — | ||||||||||
Net realized gain on investments | 152,147 | ||||||||||
Net Increase Resulting from Operations | 152,147 |
See Accompanying Notes to Financial Statements.
8
Statement of Changes in Net Assets – BofA California Tax-Exempt Reserves
Year Ended August 31, | |||||||||||||||
Increase (Decrease) in Net Assets | 2015 ($) | 2014 ($) | |||||||||||||
Operations | Net realized gain on investments | 152,147 | 43,539 | ||||||||||||
Net increase resulting from operations | 152,147 | 43,539 | |||||||||||||
Distributions to Shareholders | From net investment income: | ||||||||||||||
Adviser Class Shares | — | (369 | ) | ||||||||||||
Capital Class Shares | — | (4,426 | ) | ||||||||||||
Daily Class Shares | — | (563 | ) | ||||||||||||
Institutional Class Shares | — | (9 | ) | ||||||||||||
Investor Class Shares | — | (329 | ) | ||||||||||||
Liquidity Class Shares | — | (1 | ) | ||||||||||||
Trust Class Shares | — | (17,088 | ) | ||||||||||||
Total distributions to shareholders | — | (22,785 | ) | ||||||||||||
Net Capital Stock Transactions | 16,084,174 | (72,568,855 | ) | ||||||||||||
Contribution from advisor (See Note 3) | 294,816 | — | |||||||||||||
Total increase (decrease) in net assets | 16,531,137 | (72,548,101 | ) | ||||||||||||
Net Assets | Beginning of period | 388,535,238 | 461,083,339 | ||||||||||||
End of period | 405,066,375 | 388,535,238 | |||||||||||||
Undistributed net investment income at end of period | — | — |
See Accompanying Notes to Financial Statements.
9
Statement of Changes in Net Assets (continued) – BofA California Tax-Exempt Reserves
Capital Stock Activity | |||||||||||||||||||
Year Ended August 31, | |||||||||||||||||||
2015 | 2014 | ||||||||||||||||||
Shares | Dollars ($) | Shares | Dollars ($) | ||||||||||||||||
Adviser Class Shares | |||||||||||||||||||
Subscriptions | — | — | 10,311 | 10,311 | |||||||||||||||
Distributions reinvested | — | — | 40 | 40 | |||||||||||||||
Redemptions | (455,258 | ) | (455,258 | ) | (6,620,470 | ) | (6,620,470 | ) | |||||||||||
Net decrease | (455,258 | ) | (455,258 | ) | (6,610,119 | ) | (6,610,119 | ) | |||||||||||
Capital Class Shares | |||||||||||||||||||
Subscriptions | 94,809,573 | 94,809,573 | 293,566,171 | 293,566,171 | |||||||||||||||
Distributions reinvested | — | — | 2,275 | 2,275 | |||||||||||||||
Redemptions | (119,267,597 | ) | (119,267,597 | ) | (323,889,883 | ) | (323,889,883 | ) | |||||||||||
Net decrease | (24,458,024 | ) | (24,458,024 | ) | (30,321,437 | ) | (30,321,437 | ) | |||||||||||
Daily Class Shares | |||||||||||||||||||
Subscriptions | — | — | 10,456 | 10,456 | |||||||||||||||
Redemptions | (1,895,266 | ) | (1,895,266 | ) | (3,335,401 | ) | (3,335,401 | ) | |||||||||||
Net decrease | (1,895,266 | ) | (1,895,266 | ) | (3,324,945 | ) | (3,324,945 | ) | |||||||||||
Institutional Class Shares | |||||||||||||||||||
Subscriptions | — | — | 40,001 | 40,001 | |||||||||||||||
Distributions reinvested | — | — | 5 | 5 | |||||||||||||||
Redemptions | (10,603 | ) | (10,603 | ) | (1,304 | ) | (1,304 | ) | |||||||||||
Net increase (decrease) | (10,603 | ) | (10,603 | ) | 38,702 | 38,702 | |||||||||||||
Investor Class Shares | |||||||||||||||||||
Subscriptions | 6,538,135 | 6,538,135 | 9,649,037 | 9,649,037 | |||||||||||||||
Distributions reinvested | — | — | 21 | 21 | |||||||||||||||
Redemptions | (7,344,610 | ) | (7,344,610 | ) | (6,926,078 | ) | (6,926,078 | ) | |||||||||||
Net increase (decrease) | (806,475 | ) | (806,475 | ) | 2,722,980 | 2,722,980 | |||||||||||||
Liquidity Class Shares | |||||||||||||||||||
Distributions reinvested | — | — | 1 | 1 | |||||||||||||||
Redemptions | (1,136 | ) | (1,136 | ) | — | — | |||||||||||||
Net increase (decrease) | (1,136 | ) | (1,136 | ) | 1 | 1 | |||||||||||||
Trust Class Shares | |||||||||||||||||||
Subscriptions | 654,195,821 | 654,195,821 | 551,960,544 | 551,960,544 | |||||||||||||||
Distributions reinvested | — | — | 8 | 8 | |||||||||||||||
Redemptions | (610,484,885 | ) | (610,484,885 | ) | (587,034,589 | ) | (587,034,589 | ) | |||||||||||
Net increase (decrease) | 43,710,936 | 43,710,936 | (35,074,037 | ) | (35,074,037 | ) |
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:
Year Ended August 31, | |||||||||||||||||||||||
Adviser Class Shares | 2015 | 2014 | 2013 | 2012 | 2011 | ||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||
Net investment income | — | — | — | (a) | — | — | (a) | ||||||||||||||||
Net realized gain (loss) on investments | — | (a) | — | (a) | — | (a) | — | — | |||||||||||||||
Total from investment operations | — | (a) | — | (a) | — | (a) | — | — | (a) | ||||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||
From net investment income | — | — | (a) | — | (a) | — | (a) | — | (a) | ||||||||||||||
Increase from Contribution from Advisor | — | (a) | — | — | — | — | |||||||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Total return (b)(c) | 0.00 | %(d) | 0.01 | % | 0.00 | %(e) | 0.05 | % | 0.03 | % | |||||||||||||
Ratios to Average Net Assets/Supplemental Data: | |||||||||||||||||||||||
Gross expenses | 0.58 | % | 0.56 | % | 0.57 | % | 0.57 | % | 0.55 | % | |||||||||||||
Net expenses | 0.09 | % | 0.11 | % | 0.19 | %(f) | 0.23 | %(f) | 0.32 | %(f) | |||||||||||||
Waiver/Reimbursement | 0.49 | % | 0.45 | % | 0.38 | % | 0.34 | % | 0.23 | % | |||||||||||||
Net investment income | — | — | — | %(e)(f) | — | (f) | — | %(e)(f) | |||||||||||||||
Net assets, end of period (000s) | $ | 6,030 | $ | 6,478 | $ | 13,083 | $ | 43,603 | $ | 62,936 |
Past performance is no guarantee of future results.
(a) Rounds to less than $0.001 per share.
(b) 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.
(c) Total return at net asset value assuming all distributions reinvested.
(d) The Fund received a capital contribution from the investment advisor which had an impact of less than 0.01% on total return.
(e) Rounds to less than 0.01%.
(f) 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:
Year Ended August 31, | |||||||||||||||||||||||
Capital Class Shares | 2015 | 2014 | 2013 | 2012 | 2011 | ||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||
Net investment income | — | — | — | (a) | — | (a) | 0.001 | ||||||||||||||||
Net realized gain (loss) on investments | — | (a) | — | (a) | — | (a) | — | — | |||||||||||||||
Total from investment operations | — | (a) | — | (a) | — | (a) | — | (a) | 0.001 | ||||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||
From net investment income | — | — | (a) | — | (a) | (0.001 | ) | (0.001 | ) | ||||||||||||||
Increase from Contribution from Advisor | — | (a) | — | — | — | — | |||||||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Total return (b)(c) | 0.00 | %(d) | 0.01 | % | 0.01 | % | 0.08 | % | 0.14 | % | |||||||||||||
Ratios to Average Net Assets/Supplemental Data: | |||||||||||||||||||||||
Gross expenses | 0.33 | % | 0.31 | % | 0.32 | % | 0.32 | % | 0.30 | % | |||||||||||||
Net expenses | 0.09 | % | 0.11 | % | 0.17 | %(e) | 0.20 | %(e) | 0.20 | %(e) | |||||||||||||
Waiver/Reimbursement | 0.24 | % | 0.20 | % | 0.15 | % | 0.12 | % | 0.10 | % | |||||||||||||
Net investment income | — | — | 0.01 | %(e) | 0.03 | %(e) | 0.11 | %(e) | |||||||||||||||
Net assets, end of period (000s) | $ | 55,797 | $ | 80,166 | $ | 110,464 | $ | 75,981 | $ | 117,232 |
Past performance is no guarantee of future results.
(a) Rounds to less than $0.001 per share.
(b) 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.
(c) Total return at net asset value assuming all distributions reinvested.
(d) The Fund received a capital contribution from the investment advisor which had an impact of less than 0.01% on total return.
(e) The benefits derived from expense reductions had an impact of less than 0.01%.
See Accompanying Notes to Financial Statements.
12
Financial Highlights – BofA California Tax-Exempt Reserves
Selected data for a share outstanding throughout each period is as follows:
Year Ended August 31, | |||||||||||||||||||||||
Daily Class Shares | 2015 | 2014 | 2013 | 2012 | 2011 | ||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||
Net investment income | — | — | — | (a) | — | — | (a) | ||||||||||||||||
Net realized gain (loss) on investments | — | (a) | — | (a) | — | (a) | — | — | |||||||||||||||
Total from investment operations | — | (a) | — | (a) | — | (a) | — | — | (a) | ||||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||
From net investment income | — | — | (a) | — | (a) | — | (a) | — | (a) | ||||||||||||||
Increase from Contribution from Advisor | — | (a) | — | — | — | — | |||||||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Total return (b)(c) | 0.00 | %(d) | 0.01 | % | 0.00 | %(e) | 0.05 | % | 0.03 | % | |||||||||||||
Ratios to Average Net Assets/Supplemental Data: | |||||||||||||||||||||||
Gross expenses | 0.93 | % | 0.91 | % | 0.92 | % | 0.92 | % | 0.90 | % | |||||||||||||
Net expenses | 0.09 | % | 0.11 | % | 0.18 | %(f) | 0.23 | %(f) | 0.32 | %(f) | |||||||||||||
Waiver/Reimbursement | 0.84 | % | 0.80 | % | 0.74 | % | 0.69 | % | 0.58 | % | |||||||||||||
Net investment income | — | — | — | %(e)(f) | — | (f) | — | %(e)(f) | |||||||||||||||
Net assets, end of period (000s) | $ | 6,721 | $ | 8,607 | $ | 11,929 | $ | 17,086 | $ | 35,567 |
Past performance is no guarantee of future results.
(a) Rounds to less than $0.001 per share.
(b) 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.
(c) Total return at net asset value assuming all distributions reinvested.
(d) The Fund received a capital contribution from the investment advisor which had an impact of less than 0.01% on total return.
(e) Rounds to less than 0.01%.
(f) The benefits derived from expense reductions had an impact of less than 0.01%.
See Accompanying Notes to Financial Statements.
13
Financial Highlights – BofA California Tax-Exempt Reserves
Selected data for a share outstanding throughout each period is as follows:
Year Ended August 31, | |||||||||||||||||||||||
Institutional Class Shares | 2015 | 2014 | 2013 | 2012 | 2011 | ||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||
Net investment income | — | — | — | (a) | — | (a) | 0.001 | ||||||||||||||||
Net realized gain (loss) on investments | — | (a) | — | (a) | — | (a) | — | — | |||||||||||||||
Total from investment operations | — | (a) | — | (a) | — | (a) | — | (a) | 0.001 | ||||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||
From net investment income | — | — | (a) | — | (a) | (0.001 | ) | (0.001 | ) | ||||||||||||||
Increase from Contribution from Advisor | — | (a) | — | — | — | — | |||||||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Total return(b)(c) | 0.00 | %(d) | 0.01 | % | 0.00 | %(e) | 0.05 | % | 0.11 | % | |||||||||||||
Ratios to Average Net Assets/Supplemental Data: | |||||||||||||||||||||||
Gross expenses | 0.37 | % | 0.35 | % | 0.36 | % | 0.35 | % | 0.34 | % | |||||||||||||
Net expenses | 0.09 | % | 0.11 | % | 0.19 | %(f) | 0.22 | %(f) | 0.23 | %(f) | |||||||||||||
Waiver/Reimbursement | 0.28 | % | 0.24 | % | 0.17 | % | 0.13 | % | 0.11 | % | |||||||||||||
Net investment income | — | — | 0.01 | %(f) | — | %(e)(f) | 0.08 | %(f) | |||||||||||||||
Net assets, end of period (000s) | $ | 196 | $ | 206 | $ | 167 | $ | 686 | $ | 110,499 |
Past performance is no guarantee of future results.
(a) Rounds to less than $0.001 per share.
(b) Total return at net asset value assuming all distributions reinvested.
(c) 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.
(d) The Fund received a capital contribution from the investment advisor which had an impact of less than 0.01% on total return.
(e) Rounds to less than 0.01%.
(f) 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:
Year Ended August 31, | |||||||||||||||||||||||
Investor Class Shares | 2015 | 2014 | 2013 | 2012 | 2011 | ||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||
Net investment income | — | — | — | (a) | — | — | (a) | ||||||||||||||||
Net realized gain (loss) on investments | — | (a) | — | (a) | — | (a) | — | — | |||||||||||||||
Total from investment operations | — | (a) | — | (a) | — | (a) | — | — | (a) | ||||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||
From net investment income | — | — | (a) | — | (a) | — | (a) | — | (a) | ||||||||||||||
Increase from Contribution from Advisor | — | (a) | — | — | — | — | |||||||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Total return(b)(c) | 0.00 | %(d) | 0.01 | % | 0.00 | %(e) | 0.05 | % | 0.03 | % | |||||||||||||
Ratios to Average Net Assets/Supplemental Data: | |||||||||||||||||||||||
Gross expenses | 0.68 | % | 0.66 | % | 0.67 | % | 0.66 | % | 0.65 | % | |||||||||||||
Net expenses | 0.09 | % | 0.11 | % | 0.19 | %(f) | 0.22 | %(f) | 0.30 | %(f) | |||||||||||||
Waiver/Reimbursement | 0.59 | % | 0.55 | % | 0.48 | % | 0.44 | % | 0.35 | % | |||||||||||||
Net investment income | — | — | — | %(e)(f) | — | (f) | — | %(e)(f) | |||||||||||||||
Net assets, end of period (000s) | $ | 4,790 | $ | 5,590 | $ | 2,870 | $ | 9,007 | $ | 6,201 |
Past performance is no guarantee of future results.
(a) Rounds to less than $0.001 per share.
(b) 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.
(c) Total return at net asset value assuming all distributions reinvested.
(d) The Fund received a capital contribution from the investment advisor which had an impact of less than 0.01% on total return.
(e) Rounds to less than 0.01%.
(f) 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:
Year Ended August 31, | |||||||||||||||||||||||
Liquidity Class Shares | 2015 | 2014 | 2013 | 2012 | 2011 | ||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||
Net investment income | — | — | — | (a) | — | — | (a) | ||||||||||||||||
Net realized gain (loss) on investments | — | (a) | — | (a) | — | (a) | — | — | |||||||||||||||
Total from investment operations | — | (a) | — | (a) | — | (a) | — | — | (a) | ||||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||
From net investment income | — | — | (a) | — | (a) | — | (a) | — | (a) | ||||||||||||||
Increase from Contribution from Advisor | — | (a) | — | — | — | — | |||||||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Total return(b)(c) | 0.00 | %(d) | 0.01 | % | 0.00 | %(e) | 0.04 | % | 0.03 | % | |||||||||||||
Ratios to Average Net Assets/Supplemental Data: | |||||||||||||||||||||||
Gross expenses | 0.58 | % | 0.56 | % | 0.57 | % | 0.56 | % | 0.55 | % | |||||||||||||
Net expenses | 0.09 | % | 0.11 | % | 0.19 | %(f) | 0.21 | %(f) | 0.28 | %(f) | |||||||||||||
Waiver/Reimbursement | 0.49 | % | 0.45 | % | 0.38 | % | 0.35 | % | 0.27 | % | |||||||||||||
Net investment income | — | — | — | %(e)(f) | — | (f) | — | %(e)(f) | |||||||||||||||
Net assets, end of period (000s) | $ | 10 | $ | 11 | $ | 11 | $ | 1 | $ | 701 |
Past performance is no guarantee of future results.
(a) Rounds to less than $0.001 per share.
(b) Total return at net asset value assuming all distributions reinvested.
(c) 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.
(d) The Fund received a capital contribution from the investment advisor which had an impact of less than 0.01% on total return.
(e) Rounds to less than 0.01%.
(f) 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:
Year Ended August 31, | |||||||||||||||||||||||
Trust Class Shares | 2015 | 2014 | 2013 | 2012 | 2011 | ||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||
Net investment income | — | — | — | (a) | — | (a) | 0.001 | ||||||||||||||||
Net realized gain (loss) on investments | — | (a) | — | (a) | — | (a) | — | — | |||||||||||||||
Total from investment operations | — | (a) | — | (a) | — | (a) | — | (a) | 0.001 | ||||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||
From net investment income | — | — | (a) | — | (a) | — | (a) | (0.001 | ) | ||||||||||||||
Increase from Contribution from Advisor | — | (a) | — | — | — | — | |||||||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Total return(b)(c) | 0.00 | %(d) | 0.01 | % | 0.00 | %(e) | 0.05 | % | 0.06 | % | |||||||||||||
Ratios to Average Net Assets/Supplemental Data: | |||||||||||||||||||||||
Gross expenses | 0.43 | % | 0.41 | % | 0.42 | % | 0.41 | % | 0.40 | % | |||||||||||||
Net expenses | 0.09 | % | 0.11 | % | 0.18 | %(f) | 0.22 | %(f) | 0.28 | %(f) | |||||||||||||
Waiver/Reimbursement | 0.34 | % | 0.30 | % | 0.24 | % | 0.19 | % | 0.12 | % | |||||||||||||
Net investment income | — | — | — | %(e)(f) | — | %(e)(f) | 0.02 | %(f) | |||||||||||||||
Net assets, end of period (000s) | $ | 331,523 | $ | 287,477 | $ | 322,559 | $ | 372,451 | $ | 381,369 |
Past performance is no guarantee of future results.
(a) Rounds to less than $0.001 per share.
(b) Total return at net asset value assuming all distributions reinvested.
(c) 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.
(d) The Fund received a capital contribution from the investment advisor which had an impact of less than 0.01% on total return.
(e) Rounds to less than 0.01%.
(f) 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
August 31, 2015
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.
The Fund is an investment company and accordingly follows the investment company accounting and reporting guidance of the Financial Accounting Standards Board (FASB) Accounting Standard Codification Topic 946 Financial Services—Investment Companies.
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 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). These investments may trade in markets that are not considered to be active, but whose values are supported by observable inputs such as U.S. government obligations and agency securities, investment-grade corporate bonds and state, municipal and provincial obligations. For money market funds operating under Rule 2a-7 of the 1940 Act, securities are valued at amortized cost which approximates market value and are considered to be valued using Level 2 inputs.
• 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.
18
BofA California Tax-Exempt Reserves, August 31, 2015
Unobservable inputs may include management's own assumptions about the factors market participants would use in pricing an investment.
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
Security Transactions
Security transactions are accounted for on the trade date. Cost is determined and gains (losses) are based upon the specific identification method for both financial statement and federal income tax purposes.
Income Recognition
Interest income is recorded on the accrual basis. Premium and discount are amortized and accreted, respectively, on all debt securities, unless otherwise noted.
Expenses
General expenses of the Trust are allocated to the 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. Expenses directly attributable to a specific class of shares are charged to that share class.
Determination of Class Net Asset Value
All income, expenses (other than class-specific expenses, which are charged to that share class, as shown on the Statement of Operations) and realized 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 based on the following methodologies: income and expenses are allocated to each class based on the settled shares method, while realized gains (losses) are allocated based on the relative net assets of each class.
Federal Income Tax Status
The Fund intends to qualify each year as a "regulated investment company" under Subchapter M of the Internal Revenue Code, as amended, and to distribute substantially all of its tax-exempt or taxable income, if any, for its tax year, and as such will not be subject to federal income taxes. In addition, the Fund intends to distribute in each calendar year
substantially all of its net investment income, capital gains and certain other amounts, if any, such that the Fund 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 Contribution
Within the period September 1, 2014 to August 31, 2015, the Advisor made voluntary capital contributions to the Fund in the amount of $294,816.
Note 4. Federal Tax Information
The timing and character of income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP. Reclassifications are made to the Fund's capital accounts for permanent tax differences to reflect income and gains available for distribution (or available capital loss carry forwards) under income tax regulations.
For the year ended August 31, 2015, permanent book and tax basis differences resulting primarily from capital
19
BofA California Tax-Exempt Reserves, August 31, 2015
contributions were identified and reclassified among the components of the Fund's net assets as follows:
Undistributed Net Investment Income | Accumulated Net Realized Gain (Loss) | Paid-In-Capital | |||||||||
$ | — | $ | 294,816 | $ | (294,816 | ) |
The tax character of distributions paid during the years ended August 31, 2015 and August 31, 2014 were as follows:
August 31, | |||||||||||
Distributions paid from | 2015 | 2014 | |||||||||
Tax-Exempt Income | $ | — | $ | 22,785 |
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, 2015, 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 | $ | 275,026 |
Capital loss carry forwards of $446,963 were utilized by the Fund during the year ended August 31, 2015.
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
BofA Advisors, LLC (the "Advisor"), an indirect, wholly owned subsidiary of Bank of America Corporation ("BofA Corp."), 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 | % |
For the year ended August 31, 2015, 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
20
BofA California Tax-Exempt Reserves, August 31, 2015
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 year ended August 31, 2015, the 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.
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, 2015. There is no guarantee that this expense limitation will continue after such date.
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 (together, 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 the 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.
Distribution and Shareholder Servicing Fees
BofA Distributors, Inc. (the "Distributor"), an affiliate of the Advisor and an indirect, wholly owned subsidiary of BofA Corp., 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 sales support services. The Distributor is entitled to retain some or all fees payable under the Distribution Plan in certain circumstances, including but not limited to, instances when there is no broker of record or when certain qualification standards have not been met by the broker of record. In certain instances, payments will continue to be made pursuant to the Distribution Plan with respect to shares held in classes that are closed to new investors and shares held by specific investors who are not eligible to make additional purchases in a particular share class.
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.
21
BofA California Tax-Exempt Reserves, August 31, 2015
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, 2015 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 the 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, 2015, so that the Fund's ordinary operating expenses (excluding any acquired fund fees and expenses, 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 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 August 31, 2015, the amounts potentially recoverable pursuant to this arrangement are as follows:
Amount of potential recovery expiring August 31: | Total potential | Amount recovered during the year | |||||||||||||||||
2018 | 2017 | 2016 | recovery | ended 08/31/2015 | |||||||||||||||
$ | 460,481 | $ | 488,543 | $ | 587,907 | $ | 1,536,931 | $ | — |
22
BofA California Tax-Exempt Reserves, August 31, 2015
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 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%. Pursuant to a September 25, 2015 amendment, an annual administration fee of $25,000 is also accrued and apportioned to each fund participating in the line of credit based on the average net assets of the participating funds. Prior to the September 25, 2015 amendment, an
annual administration fee of $10,000 was accrued and apportioned to each participating fund under the same terms.
For the year ended August 31, 2015, 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.
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
23
BofA California Tax-Exempt Reserves, August 31, 2015
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.
Note 9. Money Market Fund Regulatory Matters
On July 23, 2014, the Securities and Exchange Commission voted to amend Rule 2a-7, which governs money market funds (such as the Fund). The majority of these amendments take effect in 2016. The most significant change is a requirement that institutional (i.e. large volume institutions such as banks, trusts, insurance companies, etc.) prime and institutional municipal money market funds move to a floating net asset value. Retail (i.e. a money market mutual fund that has policies and procedures reasonably designed to limit all beneficial owners of the money market fund to natural persons) prime, municipal, government and treasury money market funds will continue to transact at a stable $1.00 share price. In addition, the boards of trustees of non-government money market funds may impose a temporary liquidity fee of up to 2% of the value of a redemption and/or suspend (or "gate") redemptions temporarily should a money market fund's level of weekly liquid assets fall below 30% of its total assets. At this time, the Fund's management is evaluating the implications of the reforms and their impact on the Fund, including potential effects on the Fund's operations and returns.
24
Report of Independent Registered Public Accounting Firm
To the Trustees of BofA Funds Series Trust and Shareholders of BofA California Tax-Exempt Reserves
In our opinion, the accompanying statement of assets and liabilities, including the investment portfolio, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of BofA California Tax-Exempt Reserves (the "Fund") (a series of BofA Funds Series Trust) at August 31, 2015, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and the financial highlights for each of the periods indicated, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as "financial statements") are the responsibility of the Fund's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at August 31, 2015 by correspondence with the custodian, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
Boston, Massachusetts
October 21, 2015
25
Federal Income Tax Information (Unaudited) – BofA California Tax-Exempt Reserves
The Fund will notify shareholders in January 2016 of amounts for use in preparing 2015 income tax returns.
26
Fund Governance
The Trustees serve terms of indefinite duration. The names, addresses and ages of the Trustees and officers of the Funds in the BofA Funds Series Trust, the year each was first elected or appointed to office, their principal business occupations during at least the last five years, the number of Funds overseen by each Trustee and other directorships they hold are shown below. Each officer listed below serves as an officer of each Fund in the BofA Funds Series Trust.
Independent Trustees
Name, Address and Year of Birth, Position with Funds, Year First Elected or Appointed to Office | Principal Occupation(s) During Past Five Years, Number of Funds in BofA Funds Series Trust Overseen by Trustee, Other Directorships Held | ||||||
Harrison M. Bains (Born 1943) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Trustee (since 2011) | Retired. Oversees 11 Funds. Mercer Funds (9 funds); BG Medicine, Inc. (life sciences). | ||||||
Paul Glasserman (Born 1962) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Trustee (since 2011) | Jack R. Anderson Professor of Business—Columbia Business School, since 2000 (Senior Vice Dean, 2004-2008; Professor, 1995-2000); Visiting Scholar—Federal Reserve Bank of New York, from 2008 to 2012; Consultant to the U.S. Treasury, 2011-2014; Independent consultant to financial firms since 1995. Oversees 11 Funds. | ||||||
William A. Hawkins (Born 1942) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Trustee (since 2005)1 | Managing Director—Overton Partners (financial consulting), August 2010 to present. Oversees 11 Funds. Columbia Funds (127 funds). | ||||||
R. Glenn Hilliard (Born 1943) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Trustee (since 2005)1 | Chairman and Chief Executive Officer—Hilliard Group LLC (investing and consulting), from 2003 through current; Non-Executive Director & Chairman—CNO Financial Group, Inc. (formerly Conseco, Inc.) (insurance), September 2003-May 2011. Oversees 11 Funds. Columbia Funds (127 funds). | ||||||
William J. Kelly (Born 1960) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Trustee (since 2011) | Chief Executive Officer—Chartered Alternative Investment Analyst Association, January 2014 to present. Oversees 11 Funds. | ||||||
Debra Perry (Born 1951) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Trustee (since 2011) | Retired. Managing Member—Perry Consulting LLC (advisory firm), from 2008 through 2014. Oversees 11 Funds. Korn/Ferry International (recruiting); Sanford C. Bernstein Fund, Inc. (18 funds); Board Member—PartnerRE (reinsurance). |
1 Includes service as trustees of Columbia Funds Series Trust, the predecessor trust.
The Statement of Additional Information includes additional information about the Trustees of the Funds and is available, without charge, upon request by calling 888-331-0904. (Institutional Investors, please call 800-353-0828.)
27
Fund Governance (continued)
Officers
Name, Address and Year of Birth, Position with Funds, Year First Elected or Appointed to Office | Principal Occupation(s) During Past Five Years | ||||||
Michael J. Pelzar (Born 1968) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 President (since 2010) | President, BofA Global Capital Management Group, LLC since May 2010; Managing Director and Head of Product Management of the Advisor from 2007 to 2010. | ||||||
Kenneth B. Crotty (Born 1961) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Vice President (since 2015) Assistant Treasurer (2014-2015) | Chief Operating Officer, BofA Global Capital Management Group, LLC since August 2013; President KBC Consulting 2012-2013; Global Chief Operating Officer of Mercer Investments and President of Mercer Investments US 2006-2012. | ||||||
Jeffrey R. Coleman (Born 1969) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Senior Vice President, Chief Financial Officer, Chief Accounting Officer (since 2010) and Treasurer (since 2009) | Managing Director of Fund Administration and Transfer Agency Oversight of the Advisor since May 2010; Director of Fund Administration of the Advisor since January 2006. | ||||||
Marina Belaya (Born 1967) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Secretary and Chief Legal Officer (since 2013) | Assistant General Counsel, Director, Bank of America since July 2007. |
28
Fund Governance (continued)
Officers (continued)
Name, Address and Year of Birth, Position with Funds, Year First Elected or Appointed to Office | Principal Occupation(s) During Past Five Years | ||||||
James R. Bordewick (Born 1959) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Senior Vice President and Chief Compliance Officer (since 2010) | Chief Compliance Officer of U.S. Trust, Bank of America Private Wealth Management since 2012; Chief Compliance Officer of the Advisor and Managing Director, Bank of America since May 2010. | ||||||
Barry S. Vallan (Born 1969) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Deputy Treasurer (since 2010) and Controller (since 2006) | Director of Fund Administration of the Advisor since May 2010; Vice President—Fund Treasury of the Advisor since October 2004; Vice President—Fund Administration of the Advisor since May 2002. | ||||||
Patrick Campbell (Born 1957) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Vice President (since 2015) Assistant Treasurer (2010-2015) | Director of Transfer Agency Oversight, BofA Global Capital Management Group, LLC since May 2010. | ||||||
Rana J. Wright (Born 1978) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Assistant Secretary (since 2014) | Assistant General Counsel and Director, Bank of America, and Chief Legal Officer, BofA Global Capital Management Group, LLC, since June 2014; Partner, Reed Smith LLP, 2012 to 2014; Associate, Reed Smith LLP, 2003 to 2011. | ||||||
Nitin Mehra (Born 1977) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Vice President (since 2015) Assistant Treasurer (2013-2015) | Managing Director and Head of Strategy and Product at BofA Global Capital Management Group, LLC since May 2011; Managing Director of Strategy and Product at BofA Global Capital Management Group, LLC from 2010-2011; Director of Product Strategy and Development of the Advisor from 2008-2010. |
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 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.
An investment in money market mutual funds is not insured or guaranteed by Bank of America, N.A. or its affiliates, or by the Federal Deposit Insurance Corporation or any other government agency. Although money market mutual funds seek to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in money market mutual funds.
BofA® 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
BofA Global Capital Management
100 Federal Street
Boston, MA 02110
Questions or comments regarding your account or investment in the Funds should be directed to:
Boston Financial Data Services
P.O. Box 8723
Boston, MA 02266-8723
Retail Investors: 888.331.0904
Institutional Investors: 800.353.0828
BofA California Tax-Exempt Reserves
Annual Report, August 31, 2015
© 2015 Bank of America Corporation. All rights reserved.
BofA Distributors, Inc.
100 Federal Street, Boston, MA 02110
888.331.0904 (Institutional Investors: 800.353.0828) www.bofacapital.com
AR-CATE-1015
BofA Funds
Annual Report
August 31, 2015
• BofA Cash Reserves
NOT FDIC INSURED | May Lose Value | ||||||
NOT BANK ISSUED | No Bank Guarantee |
Table of Contents
Understanding Your Expenses | 1 | ||||||
Investment Portfolio | 2 | ||||||
Statement of Assets and Liabilities | 13 | ||||||
Statement of Operations | 15 | ||||||
Statement of Changes in Net Assets | 16 | ||||||
Financial Highlights | 18 | ||||||
Notes to Financial Statements | 28 | ||||||
Report of Independent Registered Public Accounting Firm | 36 | ||||||
Federal Income Tax Information | 37 | ||||||
Fund Governance | 38 | ||||||
Important Information About This Report | 41 |
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.
President's Message
To Our Valued Shareholders:
A year ago the consensus within the financial community was that the interest rate environment would soon be more hospitable to money market fund investors as a strengthening U.S. economy finally moved the Federal Reserve ("the Fed") to raise short-term interest rates. That rate hike has yet to materialize, so for liquidity investors, the most important news out of Washington has come not from the Fed, but from the U.S. Securities and Exchange Commission ("SEC"), which adopted sweeping changes to the regulations governing U.S. money market funds.
To take effect in October 2016, the amendments to Rule 2a-7 under the Investment Company Act of 1940 include two important reforms that are prompting investors to reevaluate their liquidity investment strategies:
• Institutional prime and institutional municipal money market funds must "float" their net asset values ("NAVs"), which means the value of the funds' shares would be based on the market value of their underlying securities. Only government funds and funds serving retail investors—defined as "natural persons"—would retain their stable, $1-per-share NAVs.
• The boards of trustees of non-government money market funds may impose a temporary liquidity fee of up to 2% of the value of a redemption or to suspend or "gate" redemptions temporarily should a money market fund's level of weekly liquid assets fall below 30% of its total assets.
These changes are part of a multi-year effort on the part of the SEC to make money market funds more resilient during market crises, when heavy redemption activity can exert strong downward pressure on funds' NAVs.
After extensive analysis, we have concluded that the impact of the rule changes will be less significant than many investors first believed. With regard to floating NAV funds, for example, fund managers still will go to great lengths to maintain the $1-per-share NAV after the floating NAV rule takes effect. If there is any movement around the $1 mark, that variation likely would be very limited under normal market conditions because of the preponderance of short-term, high-quality securities in money market funds. As for liquidity fees and redemption gates, these measures would be a last resort for fund managers because of the reputational damage money market fund companies would incur were they to impose these measures.
Recognizing the importance of money market fund reform to our shareholders, BofA Global Capital Management has launched a series of whitepapers analyzing the potential impact of the rule changes on clients' liquidity-management programs. These papers are available at www.bofacapital.com. Our preparations for the implementation of the reforms are proceeding, and we anticipate no problems meeting the October 2016 compliance deadline.
Shifting back to the macroeconomic environment, the Fed held the benchmark federal funds rate steady in September, but we believe the drop in the U.S. unemployment rate and steady economic growth should allow the central bank to begin increasing the federal funds rate from the current 0% to .25% rate—in the near future. This, in our view, will mark the beginning of a gradual increase in rates that over time should translate into potentially more attractive yields for money market fund investors. We are positioning the BofA Funds to capture the potential benefits of a rising-rate environment.
Given the complexity of modern financial markets and the ever-present threat of unforeseen investment challenges, the managers of the BofA Funds will continue to employ a conservative investment process designed to achieve your most important goals: principal protection, a high degree of liquidity and competitive risk-adjusted yields. We believe our conservative investment posture; our focus on the management of liquidity investments; and the resources available to us as part of one of the world's largest financial institutions position BofA Global Capital Management to help you reach your liquidity objectives.
On behalf of everyone at BofA Global Capital Management, I thank you for the opportunity to have served you over the past year. We appreciate your business, and we look forward to working with you in the months and years ahead.
Sincerely,
Michael Pelzar
President, BofA Global Capital Management
ARQ5HMRY
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:
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 $1,000. Please refer to the Fund's prospectus for additional details.
3/1/15 – 8/31/15 (Unaudited)
Account value at the beginning of the period ($) | 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 | 1.26 | 1.28 | 0.25 | ||||||||||||||||||||||||
Capital Class Shares | 1,000.00 | 1,000.00 | 1,000.30 | 1,024.25 | 0.96 | 0.97 | 0.19 | ||||||||||||||||||||||||
Daily Class Shares | 1,000.00 | 1,000.00 | 1,000.00 | 1,023.95 | 1.26 | 1.28 | 0.25 | ||||||||||||||||||||||||
Institutional Capital Shares | 1,000.00 | 1,000.00 | 1,000.30 | 1,024.25 | 0.96 | 0.97 | 0.19 | ||||||||||||||||||||||||
Institutional Class Shares | 1,000.00 | 1,000.00 | 1,000.10 | 1,024.05 | 1.16 | 1.17 | 0.23 | ||||||||||||||||||||||||
Investor Class Shares | 1,000.00 | 1,000.00 | 1,000.00 | 1,023.95 | 1.26 | 1.28 | 0.25 | ||||||||||||||||||||||||
Investor II Class Shares | 1,000.00 | 1,000.00 | 1,000.00 | 1,023.95 | 1.26 | 1.28 | 0.25 | ||||||||||||||||||||||||
Liquidity Class Shares | 1,000.00 | 1,000.00 | 1,000.00 | 1,023.95 | 1.26 | 1.28 | 0.25 | ||||||||||||||||||||||||
Marsico Shares | 1,000.00 | 1,000.00 | 1,000.00 | 1,023.95 | 1.26 | 1.28 | 0.25 | ||||||||||||||||||||||||
Trust Class Shares | 1,000.00 | 1,000.00 | 1,000.00 | 1,023.95 | 1.26 | 1.28 | 0.25 |
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
August 31, 2015
Certificates of Deposit – 34.4% | |||||||||||
Par ($) | Value ($) | ||||||||||
Bank of Montreal Chicago | |||||||||||
0.190% 09/15/15 | 50,000,000 | 50,000,000 | |||||||||
0.272% 11/09/15 (09/09/15) (a)(b) | 70,000,000 | 70,000,000 | |||||||||
0.282% 11/04/15 (09/04/15) (a)(b) | 50,000,000 | 50,000,000 | |||||||||
0.282% 12/04/15 (09/04/15) (a)(b) | 59,443,000 | 59,443,000 | |||||||||
0.365% 01/22/16 (09/22/15) (a)(b) | 50,000,000 | 50,000,000 | |||||||||
Bank of Nova Scotia Houston | |||||||||||
0.270% 10/07/15 (09/01/15) (a)(b) | 25,000,000 | 25,000,000 | |||||||||
0.270% 11/02/15 (09/01/15) (a)(b) | 25,000,000 | 25,000,000 | |||||||||
0.280% 12/03/15 (09/01/15) (a)(b) | 88,000,000 | 88,000,000 | |||||||||
0.300% 11/23/15 (09/23/15) (a)(b) | 15,945,000 | 15,945,061 | |||||||||
0.350% 01/07/16 (09/01/15) (a)(b) | 48,000,000 | 48,000,000 | |||||||||
0.360% 02/11/16 (09/01/15) (a)(b) | 40,000,000 | 40,000,000 | |||||||||
Bank of Tokyo-Mitsubishi UFJ Ltd./NY | |||||||||||
0.290% 10/05/15 | 14,000,000 | 14,000,000 | |||||||||
0.318% 09/01/15 | 8,000,000 | 8,000,000 | |||||||||
0.338% 10/28/15 (09/28/15) (a)(b) | 41,000,000 | 41,000,000 | |||||||||
0.348% 11/30/15 (09/28/15) (a)(b) | 21,000,000 | 21,000,000 | |||||||||
BNP Paribas NY | |||||||||||
0.200% 09/04/15 | 85,000,000 | 85,000,000 | |||||||||
Cooperatieve Centrale Raiffeisen-Boerenleenbank BA/NY | |||||||||||
0.372% 02/22/16 (09/22/15) (a)(b) | 63,000,000 | 63,000,000 | |||||||||
Credit Industriel et Commercial NY | |||||||||||
0.230% 09/03/15 | 100,000,000 | 100,000,000 | |||||||||
0.250% 09/01/15 | 7,000,000 | 7,000,000 | |||||||||
0.380% 11/05/15 | 15,000,000 | 15,002,156 | |||||||||
Credit Suisse NY | |||||||||||
0.230% 09/01/15 | 80,500,000 | 80,500,000 | |||||||||
0.230% 09/04/15 | 50,000,000 | 50,000,000 | |||||||||
0.310% 09/02/15 | 38,000,000 | 38,000,000 | |||||||||
0.580% 09/18/15 | 1,723,000 | 1,723,218 | |||||||||
DNB NOR Bank ASA NY | |||||||||||
0.130% 09/02/15 | 11,000,000 | 11,000,000 |
Par ($) | Value ($) | ||||||||||
0.288% 10/15/15 (09/15/15) (a)(b) | 95,000,000 | 95,000,000 | |||||||||
0.315% 10/29/15 | 100,000,000 | 100,000,000 | |||||||||
HSBC Bank USA NA | |||||||||||
0.285% 09/16/15 | 41,000,000 | 41,000,000 | |||||||||
0.298% 10/16/15 (09/16/15) (a)(b) | 65,000,000 | 65,000,000 | |||||||||
0.301% 11/06/15 (09/08/15) (a)(b) | 37,000,000 | 37,000,000 | |||||||||
0.315% 09/15/15 | 25,000,000 | 25,000,000 | |||||||||
0.328% 12/01/15 (09/01/15) (a)(b) | 55,000,000 | 55,000,000 | |||||||||
0.340% 11/16/15 | 25,000,000 | 25,000,000 | |||||||||
Mizuho Corporate Bank Ltd./NY | |||||||||||
0.270% 09/10/15 | 16,584,000 | 16,584,041 | |||||||||
0.270% 09/15/15 | 19,250,000 | 19,250,000 | |||||||||
0.290% 10/15/15 | 92,000,000 | 92,000,000 | |||||||||
National Bank of Canada NY | |||||||||||
0.415% 09/11/15 | 4,073,000 | 4,073,129 | |||||||||
Natixis NY | |||||||||||
0.240% 09/04/15 | 100,000,000 | 100,000,000 | |||||||||
0.240% 09/10/15 | 38,000,000 | 38,000,000 | |||||||||
Nordea Bank Finland PLC NY | |||||||||||
0.340% 11/19/15 | 58,500,000 | 58,499,996 | |||||||||
Skandinaviska Enskilda Banken AB/NY | |||||||||||
0.240% 09/10/15 | 17,720,000 | 17,720,088 | |||||||||
State Street Bank & Trust | |||||||||||
0.193% 01/11/16 (09/11/15) (a)(b) | 40,773,000 | 40,773,000 | |||||||||
0.199% 12/14/15 (09/15/15) (a)(b) | 168,000,000 | 168,000,000 | |||||||||
0.331% 01/06/16 (09/08/15) (a)(b) | 78,000,000 | 78,000,000 | |||||||||
Sumitomo Mitsui Banking Corp./NY | |||||||||||
0.280% 10/02/15 | 52,273,000 | 52,272,991 | |||||||||
0.290% 10/01/15 | 22,000,000 | 22,000,000 | |||||||||
0.320% 09/11/15 | 6,673,000 | 6,673,185 | |||||||||
0.320% 11/30/15 | 73,750,000 | 73,750,000 | |||||||||
0.344% 10/14/15 (09/14/15) (a)(b) | 35,000,000 | 35,000,000 | |||||||||
0.350% 11/23/15 (09/23/15) (a)(b) | 32,525,000 | 32,525,000 | |||||||||
0.419% 02/25/16 (09/25/15) (a)(b) | 60,750,000 | 60,750,000 | |||||||||
Svenska Handelsbanken/NY | |||||||||||
0.215% 09/16/15 | 55,679,000 | 55,679,347 |
See Accompanying Notes to Financial Statements.
2
BofA Cash Reserves
August 31, 2015
Certificates of Deposit (continued) | |||||||||||
Par ($) | Value ($) | ||||||||||
0.305% 11/25/15 | 40,000,000 | 40,000,472 | |||||||||
Toronto-Dominion Bank NY | |||||||||||
0.340% 12/16/15 | 71,285,000 | 71,285,000 | |||||||||
0.343% 01/07/16 (09/08/15) (a)(b) | 50,000,000 | 50,000,000 | |||||||||
UBS AG Stamford, CT | |||||||||||
0.383% 01/14/16 (09/21/15) (a)(b) | 83,000,000 | 83,000,000 | |||||||||
0.390% 01/15/16 (09/24/15) (a)(b) | 50,000,000 | 50,000,000 | |||||||||
Wells Fargo Bank N.A. | |||||||||||
0.270% 10/08/15 (09/01/15) (a)(b) | 50,000,000 | 50,000,000 | |||||||||
0.271% 11/12/15 (09/08/15) (a)(b) | 68,000,000 | 68,000,000 | |||||||||
0.274% 11/12/15 (09/08/15) (a)(b) | 50,000,000 | 50,000,000 | |||||||||
0.278% 10/08/15 (09/17/15) (a)(b) | 15,000,000 | 15,000,000 | |||||||||
0.340% 01/06/16 (09/01/15) (a)(b) | 87,000,000 | 87,000,000 | |||||||||
0.360% 02/18/16 (09/01/15) (a)(b) | 36,000,000 | 36,000,000 | |||||||||
Total Certificates of Deposit (cost of $3,071,449,684) | 3,071,449,684 | ||||||||||
Commercial Paper – 17.4% | |||||||||||
ANZ National International Ltd. | |||||||||||
0.358% 12/29/15 (09/29/15) (a)(b)(c) | 54,723,000 | 54,723,000 | |||||||||
Bank Nederlandse Gemeenten NV | |||||||||||
0.290% 10/13/15 (c)(d) | 37,207,000 | 37,194,412 | |||||||||
0.360% 12/07/15 (c)(d) | 1,769,000 | 1,767,284 | |||||||||
Bank of Nova Scotia (The) | |||||||||||
0.279% 09/04/15 (c) | 50,000,000 | 50,000,000 | |||||||||
BNZ International Funding Ltd. | |||||||||||
0.350% 01/05/16 (09/08/15) (a)(b)(c) | 43,495,000 | 43,495,000 | |||||||||
Caisse des Depots et Consignations | |||||||||||
0.210% 09/17/15 (c)(d) | 35,619,000 | 35,615,676 | |||||||||
0.220% 09/16/15 (c)(d) | 7,000,000 | 6,999,358 | |||||||||
Collateralized Commercial Paper Co. LLC | |||||||||||
0.370% 12/01/15 (d)(e) | 11,000,000 | 10,989,712 | |||||||||
0.400% 12/14/15 (d)(e) | 13,000,000 | 12,984,978 | |||||||||
0.520% 02/22/16 (d)(e) | 30,000,000 | 29,924,600 |
Par ($) | Value ($) | ||||||||||
Collateralized Commercial Paper II Co. LLC | |||||||||||
0.324% 10/01/15 (c)(e) | 27,000,000 | 27,000,000 | |||||||||
0.424% 01/14/16 (09/14/15) (a)(b)(c)(e) | 1,315,000 | 1,315,156 | |||||||||
Danaher Corp. | |||||||||||
0.160% 09/04/15 (c)(d) | 33,527,000 | 33,526,553 | |||||||||
0.200% 09/03/15 (c)(d) | 30,413,000 | 30,412,662 | |||||||||
DNB NOR Bank ASA NY | |||||||||||
0.280% 10/01/15 (c)(d) | 20,000,000 | 19,995,333 | |||||||||
0.294% 10/14/15 (09/14/15) (a)(b)(c) | 40,000,000 | 40,000,000 | |||||||||
0.325% 10/29/15 (c)(d) | 37,000,000 | 36,980,626 | |||||||||
Erste Abwicklungsanstalt | |||||||||||
0.210% 09/10/15 (c)(d) | 37,802,000 | 37,800,015 | |||||||||
0.320% 11/23/15 (c)(d) | 16,667,000 | 16,654,704 | |||||||||
General Electric Capital Corp. | |||||||||||
0.190% 09/08/15 (d) | 25,000,000 | 24,999,076 | |||||||||
0.280% 11/09/15 (09/01/15) (a)(b) | 115,000,000 | 115,000,000 | |||||||||
HSBC Bank PLC | |||||||||||
0.272% 10/09/15 (09/09/15) (a)(b)(c) | 13,000,000 | 13,000,000 | |||||||||
JP Morgan Securities LLC | |||||||||||
0.289% 10/01/15 (09/01/15) (a)(b) | 6,000,000 | 6,000,000 | |||||||||
0.351% 11/10/15 (09/10/15) (a)(b) | 13,517,000 | 13,517,873 | |||||||||
0.397% 02/29/16 (09/29/15) (a)(b) | 15,000,000 | 15,000,000 | |||||||||
KFW | |||||||||||
0.110% 09/01/15 (c) | 33,185,000 | 33,185,000 | |||||||||
Mizuho Corporate Bank Ltd. | |||||||||||
0.280% 09/21/15 (c)(d) | 8,433,000 | 8,431,688 | |||||||||
National Bank of Canada | |||||||||||
0.280% 09/17/15 (c)(d) | 21,750,000 | 21,747,293 | |||||||||
0.363% 12/03/15 (09/08/15) (a)(b)(c) | 59,367,000 | 59,367,000 | |||||||||
Nederlandse Waterschaps | |||||||||||
0.310% 11/30/15 (c)(d) | 36,250,000 | 36,221,906 | |||||||||
0.330% 12/07/15 (c)(d) | 81,481,000 | 81,408,550 | |||||||||
NRW. Bank | |||||||||||
0.185% 09/14/15 (c)(d) | 54,924,000 | 54,920,331 | |||||||||
San Jose, CA International Airport | |||||||||||
0.320% 09/04/15 | 12,875,000 | 12,875,000 |
See Accompanying Notes to Financial Statements.
3
BofA Cash Reserves
August 31, 2015
Commercial Paper (continued) | |||||||||||
Par ($) | Value ($) | ||||||||||
Swedbank AB | |||||||||||
0.285% 09/01/15 | 40,000,000 | 40,000,000 | |||||||||
Toyota Credit Puerto Rico | |||||||||||
0.230% 09/11/15 (d) | 17,228,000 | 17,226,899 | |||||||||
0.230% 09/15/15 (d) | 8,614,000 | 8,613,230 | |||||||||
Toyota Motor Credit Corp. | |||||||||||
0.200% 09/10/15 (d) | 77,850,000 | 77,846,108 | |||||||||
0.200% 09/14/15 (d) | 47,655,000 | 47,651,558 | |||||||||
0.269% 12/07/15 (09/02/15) (a)(b) | 20,000,000 | 20,000,000 | |||||||||
0.282% 11/16/15 (09/21/15) (a)(b) | 40,155,000 | 40,155,000 | |||||||||
0.368% 02/29/16 (09/28/15) (a)(b) | 100,000,000 | 100,000,000 | |||||||||
0.369% 02/23/16 (09/28/15) (a)(b) | 57,000,000 | 57,000,000 | |||||||||
Westpac Securities NZ Ltd. | |||||||||||
0.350% 12/11/15 (c)(d) | 15,376,000 | 15,360,902 | |||||||||
0.361% 02/08/16 (09/08/15) (a)(b)(c) | 109,811,000 | 109,806,952 | |||||||||
Total Commercial Paper (cost of $1,556,713,435) | 1,556,713,435 | ||||||||||
Asset-Backed Commercial Paper – 13.8% | |||||||||||
Albion Capital Corp. | |||||||||||
0.150% 09/04/15 (c)(d) | 47,610,000 | 47,609,405 | |||||||||
0.230% 09/16/15 (c)(d) | 18,538,000 | 18,536,223 | |||||||||
Chariot Funding LLC | |||||||||||
0.330% 11/30/15 (c)(d) | 94,808,000 | 94,729,783 | |||||||||
0.430% 12/29/15 (c)(d) | 17,216,000 | 17,191,529 | |||||||||
Ciesco LLC | |||||||||||
0.250% 09/01/15 (c) | 15,388,000 | 15,388,000 | |||||||||
CRC Funding LLC | |||||||||||
0.200% 09/14/15 (c)(d) | 26,347,000 | 26,345,097 | |||||||||
Fairway Finance Corp. | |||||||||||
0.280% 09/03/15 (c)(d) | 13,700,000 | 13,699,787 | |||||||||
0.283% 11/20/15 (09/21/15) (a)(b)(c) | 13,565,000 | 13,564,699 | |||||||||
0.311% 01/08/16 (09/08/15) (a)(b)(c) | 17,521,000 | 17,519,142 | |||||||||
Jupiter Securitization Co. LLC | |||||||||||
0.420% 12/23/15 (c)(d) | 9,985,000 | 9,971,836 | |||||||||
0.430% 12/29/15 (c)(d) | 17,216,000 | 17,191,529 | |||||||||
Kells Funding LLC | |||||||||||
0.250% 09/04/15 (c)(d) | 15,655,000 | 15,654,674 | |||||||||
0.287% 09/30/15 (09/20/15) (a)(b)(c) | 30,000,000 | 29,999,716 |
Par ($) | Value ($) | ||||||||||
0.300% 10/29/15 (c)(d) | 40,527,000 | 40,525,902 | |||||||||
0.330% 12/11/15 (c)(d) | 33,584,000 | 33,552,907 | |||||||||
Liberty Street Funding LLC | |||||||||||
0.340% 11/09/15 (c)(d) | 27,878,000 | 27,859,833 | |||||||||
0.340% 11/12/15 (c)(d) | 8,745,000 | 8,739,053 | |||||||||
0.380% 12/03/15 (c)(d) | 13,803,000 | 13,789,450 | |||||||||
0.390% 11/30/15 (c)(d) | 28,981,000 | 28,952,744 | |||||||||
Manhattan Asset Funding Co. LLC | |||||||||||
0.210% 09/01/15 | 9,083,000 | 9,083,000 | |||||||||
0.210% 09/02/15 (d) | 5,374,000 | 5,373,969 | |||||||||
0.210% 09/09/15 (d) | 13,440,000 | 13,439,373 | |||||||||
0.210% 09/10/15 (d) | 11,438,000 | 11,437,400 | |||||||||
MetLife Short Term Funding LLC | |||||||||||
0.170% 09/09/15 (c)(d) | 8,889,000 | 8,888,664 | |||||||||
Mont Blanc Capital Corp. | |||||||||||
0.250% 09/16/15 (c)(d) | 22,587,000 | 22,584,647 | |||||||||
0.320% 11/13/15 (c)(d) | 9,419,000 | 9,412,888 | |||||||||
Old Line Funding LLC | |||||||||||
0.288% 11/16/15 (09/16/15) (a)(b)(c) | 13,000,000 | 13,000,000 | |||||||||
0.288% 11/17/15 (09/17/15) (a)(b)(c) | 13,000,000 | 13,000,000 | |||||||||
0.289% 11/30/15 (09/30/15) (a)(b)(c) | 32,170,000 | 32,170,000 | |||||||||
0.366% 01/04/16 (09/24/15) (a)(b)(c) | 20,200,000 | 20,200,000 | |||||||||
0.370% 01/05/16 (09/07/15) (a)(b)(c) | 1,831,000 | 1,830,883 | |||||||||
0.390% 02/01/16 (09/01/15) (a)(b)(c) | 55,101,000 | 55,101,000 | |||||||||
0.391% 01/04/16 (09/16/15) (a)(b)(c) | 7,635,000 | 7,634,345 | |||||||||
0.410% 02/16/16 (09/16/15) (a)(b)(c) | 35,000,000 | 35,000,000 | |||||||||
0.520% 02/25/16 (c)(d) | 4,040,000 | 4,029,671 | |||||||||
Regency Markets No. 1 LLC | |||||||||||
0.130% 09/04/15 (c)(d) | 47,274,000 | 47,273,488 | |||||||||
Sheffield Receivables Co. LLC | |||||||||||
0.270% 09/01/15 (c) | 103,000,000 | 103,000,000 | |||||||||
Thunder Bay Funding LLC | |||||||||||
0.398% 12/28/15 (09/08/15) (a)(b)(c) | 55,000,000 | 55,000,000 | |||||||||
0.398% 12/28/15 (09/09/15) (a)(b)(c) | 45,306,000 | 45,306,000 | |||||||||
0.400% 12/01/15 (c)(d) | 10,433,000 | 10,422,451 | |||||||||
0.460% 01/22/16 (c)(d) | 13,491,000 | 13,466,349 |
See Accompanying Notes to Financial Statements.
4
BofA Cash Reserves
August 31, 2015
Asset-Backed Commercial Paper (continued) | |||||||||||
Par ($) | Value ($) | ||||||||||
Versailles Commercial Paper LLC | |||||||||||
0.260% 09/11/15 (c)(d) | 14,515,000 | 14,513,952 | |||||||||
0.300% 10/28/15 (c)(d) | 32,290,000 | 32,274,662 | |||||||||
0.310% 11/13/15 (c)(d) | 23,548,000 | 23,533,197 | |||||||||
0.320% 11/09/15 (c)(d) | 24,222,000 | 24,207,144 | |||||||||
Victory Receivables Corp. | |||||||||||
0.200% 09/09/15 (c)(d) | 30,000,000 | 29,998,667 | |||||||||
0.210% 09/09/15 (c)(d) | 24,000,000 | 23,998,880 | |||||||||
0.260% 10/02/15 (c)(d) | 1,335,000 | 1,334,701 | |||||||||
Working Capital Management Co. | |||||||||||
0.200% 09/08/15 (c)(d) | 1,987,000 | 1,986,923 | |||||||||
0.210% 09/03/15 (c)(d) | 18,175,000 | 18,174,788 | |||||||||
0.210% 09/04/15 (c)(d) | 36,857,000 | 36,856,355 | |||||||||
Total Asset-Backed Commercial Paper (cost of $1,234,354,706) | 1,234,354,706 | ||||||||||
Time Deposits – 8.6% | |||||||||||
Citibank N.A. | |||||||||||
0.090% 09/01/15 | 256,841,000 | 256,841,000 | |||||||||
Credit Agricole SA | |||||||||||
0.070% 09/01/15 | 57,030,000 | 57,030,000 | |||||||||
Swedbank AB | |||||||||||
0.070% 09/01/15 | 456,300,000 | 456,300,000 | |||||||||
Total Time Deposits (cost of $770,171,000) | 770,171,000 | ||||||||||
Corporate Bonds – 1.7% | |||||||||||
ANZ National International Ltd. | |||||||||||
1.850% 10/15/15 (c) | 8,954,000 | 8,970,003 | |||||||||
Bank of Montreal | |||||||||||
0.800% 11/06/15 | 873,000 | 873,661 | |||||||||
Bank of Nova Scotia (The) | |||||||||||
0.750% 10/09/15 | 11,100,000 | 11,104,869 | |||||||||
2.050% 10/07/15 | 2,857,000 | 2,861,756 | |||||||||
Bank of Tokyo-Mitsubishi UFJ Ltd. | |||||||||||
2.450% 09/11/15 (c) | 16,526,000 | 16,535,249 | |||||||||
Caisse Centrale Desjardins du Quebec | |||||||||||
2.650% 09/16/15 (c) | 5,281,000 | 5,285,891 | |||||||||
Canadian Imperial Bank of Commerce | |||||||||||
0.900% 10/01/15 | 7,215,000 | 7,217,771 | |||||||||
2.350% 12/11/15 | 15,086,000 | 15,167,124 | |||||||||
Coca-Cola Co. | |||||||||||
0.293% 09/01/15 | 5,000,000 | 5,000,000 | |||||||||
Cooperatieve Centrale Raiffeisen-Boerenleenbank BA | |||||||||||
2.125% 10/13/15 | 2,763,000 | 2,768,674 |
Par ($) | Value ($) | ||||||||||
General Electric Capital Corp. | |||||||||||
4.375% 09/21/15 | 3,126,000 | 3,132,882 | |||||||||
Metropolitan Life Global Funding I | |||||||||||
2.500% 09/29/15 (c) | 40,294,000 | 40,358,434 | |||||||||
National Australia Bank Ltd. | |||||||||||
2.750% 09/28/15 (c) | 11,672,000 | 11,692,374 | |||||||||
Royal Bank of Canada | |||||||||||
0.800% 10/30/15 | 8,227,000 | 8,233,055 | |||||||||
Shell International Finance BV | |||||||||||
0.381% 11/10/15 | 16,692,000 | 16,694,294 | |||||||||
Total Corporate Bonds (cost of $155,896,037) | 155,896,037 | ||||||||||
Municipal Bonds (a)(f) – 1.6% | |||||||||||
Colorado – 0.4% | |||||||||||
CO Housing & Finance Authority | |||||||||||
Multi-Family: | |||||||||||
Series 2003 A-1, SPA: FHLB 0.150% 10/01/33 (09/02/15) | 9,205,000 | 9,205,000 | |||||||||
Series 2004 A1, | |||||||||||
SPA: FHLB 0.120% 10/01/34 (09/02/15) | 15,020,000 | 15,020,000 | |||||||||
Series 2008 C1, | |||||||||||
SPA: FHLB 0.100% 10/01/38 (09/02/15) | 6,625,000 | 6,625,000 | |||||||||
Series 2005 B-1, | |||||||||||
SPA: FHLB 0.150% 04/01/40 (09/02/15) | 5,345,000 | 5,345,000 | |||||||||
CO Sheridan Redevelopment Agency | |||||||||||
South Santa, | |||||||||||
Series 2011, LOC: JPMorgan Chase Bank 0.250% 12/01/29 (09/03/15) | 1,565,000 | 1,565,000 | |||||||||
Colorado Total | 37,760,000 | ||||||||||
Florida – 0.1% | |||||||||||
FL Sunshine State Governmental Financing Commission | |||||||||||
0.350% 10/09/15 | 7,230,000 | 7,230,000 | |||||||||
Florida Total | 7,230,000 |
See Accompanying Notes to Financial Statements.
5
BofA Cash Reserves
August 31, 2015
Municipal Bonds (a)(f) (continued) | |||||||||||
Par ($) | Value ($) | ||||||||||
Illinois – 0.0% | |||||||||||
IL University of Illinois | |||||||||||
Series 2014 C | |||||||||||
LOC: Northern Trust Company 0.130% 04/01/44 (09/03/15) | 2,650,000 | 2,650,000 | |||||||||
Illinois Total | 2,650,000 | ||||||||||
Iowa – 0.1% | |||||||||||
IA Finance Authority | |||||||||||
Series 2004 B, AMT, | |||||||||||
SPA: FHLB 0.030% 07/01/34 (09/03/15) | 5,415,000 | 5,415,000 | |||||||||
Series 2007 G, | |||||||||||
SPA: FHLB 0.150% 01/01/38 (09/03/15) | 880,000 | 880,000 | |||||||||
Series 2009 G, | |||||||||||
SPA: FHLB 0.170% 01/01/39 (09/03/15) | 795,000 | 795,000 | |||||||||
Iowa Total | 7,090,000 | ||||||||||
Maryland – 0.0% | |||||||||||
MD Easton | |||||||||||
William Hill Manor, Inc., | |||||||||||
Series 2009 B, LOC: Branch Banking & Trust 0.190% 01/01/26 (09/03/15) | 2,400,000 | 2,400,000 | |||||||||
Maryland Total | 2,400,000 | ||||||||||
Massachusetts – 0.1% | |||||||||||
MA Simmons College | |||||||||||
Series 2008, | |||||||||||
LOC: TD Bank N.A. 0.140% 10/01/22 (09/03/15) | 5,485,000 | 5,485,000 | |||||||||
Massachusetts Total | 5,485,000 |
Par ($) | Value ($) | ||||||||||
Minnesota – 0.3% | |||||||||||
MN Office of Higher Education | |||||||||||
Supplies for Students, | |||||||||||
Series 2008 A, LOC: U.S. Bank N.A. 0.130% 12/01/43 (09/03/15) | 22,395,000 | 22,395,000 | |||||||||
Minnesota Total | 22,395,000 | ||||||||||
New Jersey – 0.1% | |||||||||||
NJ North Hudson Sewerage Authority | |||||||||||
Series 2012 | |||||||||||
LOC: TD Bank N.A. 0.120% 06/01/44 (09/03/15) | 6,385,000 | 6,385,000 | |||||||||
New Jersey Total | 6,385,000 | ||||||||||
New York – 0.2% | |||||||||||
NY Housing Finance Agency | |||||||||||
Series 2015 B | |||||||||||
LOC: Landesbank Hessen-Thüringen: 0.080% 11/01/44 (09/02/15) | 15,235,000 | 15,235,000 | |||||||||
West 60th Realty LLC, | |||||||||||
Series 2014 B1 LOC: Manufacturers & Traders: 0.220% 05/01/46 (09/02/15) | 3,830,000 | 3,830,000 | |||||||||
New York Total | 19,065,000 | ||||||||||
North Carolina – 0.1% | |||||||||||
NC Catawba | |||||||||||
Catawba Medical Center, | |||||||||||
Series 2009, LOC: Branch Banking & Trust 0.190% 10/01/34 (09/03/15) | 5,350,000 | 5,350,000 | |||||||||
North Carolina Total | 5,350,000 | ||||||||||
Oregon – 0.2% | |||||||||||
OR Housing & Community Services Department | |||||||||||
Series 2006 C, AMT, | |||||||||||
SPA: State Street Bank & Trust Co. 0.030% 07/01/36 (09/03/15) | 4,460,000 | 4,460,000 |
See Accompanying Notes to Financial Statements.
6
BofA Cash Reserves
August 31, 2015
Municipal Bonds (a)(f) (continued) | |||||||||||
Par ($) | Value ($) | ||||||||||
Single Family, | |||||||||||
Series 2006 F, AMT, | |||||||||||
SPA: State Street Bank & Trust Co. | |||||||||||
0.040% 07/01/37 (09/03/15) | 17,650,000 | 17,650,000 | |||||||||
Oregon Total | 22,110,000 | ||||||||||
Wisconsin – 0.0% | |||||||||||
WI Housing & Economic Development Authority | |||||||||||
Series 2005 E, | |||||||||||
SPA: BMO Harris Bank N.A. 0.160% 03/01/36 (09/02/15) | 2,170,000 | 2,170,000 | |||||||||
Series 2008 B | |||||||||||
SPA: BMO Harris Bank N.A. 0.130% 03/01/33 (09/02/15) | 1,085,000 | 1,085,000 | |||||||||
Wisconsin Total | 3,255,000 | ||||||||||
Total Municipal Bonds (cost of $141,175,000) | 141,175,000 | ||||||||||
Government & Agency Obligations – 0.4% | |||||||||||
U.S. Government Agencies – 0.4% | |||||||||||
Federal Farm Credit Bank | |||||||||||
0.200% 01/13/16 (09/01/15) (a)(b) | 28,120,000 | 28,119,479 | |||||||||
0.220% 04/18/16 (09/18/15) (a)(b) | 2,000,000 | 2,000,069 | |||||||||
0.250% 02/01/16 (09/01/15) (a)(b) | 2,700,000 | 2,700,458 | |||||||||
U.S. Government Agencies Total | 32,820,006 | ||||||||||
Total Government & Agency Obligations (cost of $32,820,006) | 32,820,006 | ||||||||||
Closed-End Investment Company – 0.1% | |||||||||||
Nuveen Municipal Opportunity Fund, Inc. | |||||||||||
Series 2010, AMT, LIQ FAC: Citibank N.A. 0.110% 12/01/40 (09/07/15) (a)(b)(c) | 5,900,000 | 5,900,000 | |||||||||
Total Closed-End Investment Company (cost of $5,900,000) | 5,900,000 |
Par ($) | Value ($) |
Repurchase Agreements – 22.0%
Joint Repurchase Agreement | |||||||||||
Treasury & Agency Account, dated 08/31/15, due 09/01/15 (repurchase proceeds $456,465,788) (g) | 456,464,000 | 456,464,000 | |||||||||
Joint Repurchase Agreement | |||||||||||
Treasury Account, dated 08/31/15, due 09/01/15 (repurchase proceeds $183,009,626) (g) | 183,009,000 | 183,009,000 | |||||||||
Repurchase agreement with | |||||||||||
ABN Amro NV, dated 08/31/15, due 09/01/15 at 0.140%, collateralized by U.S. Treasury obligations and U.S. Government Agency obligations with various maturities to 04/01/45, market value $37,099,875 (repurchase proceeds $36,372,141) | 36,372,000 | 36,372,000 | |||||||||
Repurchase agreement with | |||||||||||
ABN Amro NV, dated 08/31/15, due 09/01/15 at 0.150%, collateralized by U.S. Treasury obligations and corporate bonds with various maturities to 07/25/23, market value $57,277,188 (repurchase proceeds $54,557,227) | 54,557,000 | 54,557,000 | |||||||||
Repurchase agreement with | |||||||||||
BNP Paribas Prime Brokerage, Inc., dated 08/31/15, due 09/01/15 at 0.300%, collateralized by a preferred stock and corporate bonds with various maturities to 05/15/41, market value $19,218,235 (repurchase proceeds $17,038,142) | 17,038,000 | 17,038,000 |
See Accompanying Notes to Financial Statements.
7
BofA Cash Reserves
August 31, 2015
Repurchase Agreements (continued)
Par ($) | Value ($) | ||||||||||
Repurchase agreement with | |||||||||||
BNP Paribas Prime Brokerage, Inc., dated 08/31/15, due 10/15/15 at 0.420%, collateralized by a common stock, preferred stocks and corporate bonds with various maturities to 05/15/41, market value $31,472,926 (repurchase proceeds $28,064,726) (b)(h) | 28,050,000 | 28,050,000 | |||||||||
Repurchase agreement with | |||||||||||
Citigroup Global Markets, Inc., dated 08/31/15, due 09/01/15 at 0.200%, collateralized by common stocks, market value $10,919,064 (repurchase proceeds $10,085,056) | 10,085,000 | 10,085,000 | |||||||||
Repurchase agreement with | |||||||||||
Citigroup Global Markets, Inc., dated 08/31/15, due 10/05/15 at 0.320%, collateralized by common stocks, market value $38,000,340 (repurchase proceeds $35,010,889) (h) | 35,000,000 | 35,000,000 | |||||||||
Repurchase agreement with | |||||||||||
Goldman Sachs & Co., dated 08/31/15, due 09/01/15 at 0.110%, collateralized by U.S. Government Agency obligations with various maturities to 07/01/45, market value $59,080,621 (repurchase proceeds $57,922,177) | 57,922,000 | 57,922,000 | |||||||||
Repurchase agreement with | |||||||||||
HSBC Bank PLC, dated 08/17/15, at 0.220%, collateralized by common stocks and U.S. Treasury obligations with various maturities to 07/15/24, market value $124,548,350 (b)(h)(i) | 122,092,000 | 122,092,000 |
Par ($) | Value ($) | ||||||||||
Repurchase agreement with | |||||||||||
HSBC Securities USA, Inc., dated 08/03/15, at 0.170%, collateralized by corporate bonds with various maturities to 02/15/25, market value $46,385,868 (b)(h)(i) | 44,173,000 | 44,173,000 | |||||||||
Repurchase agreement with | |||||||||||
HSBC Securities USA, Inc., dated 08/31/15, due 09/01/15 at 0.130%, collateralized by U.S. Government Agency obligations with various maturities to 12/01/43, market value $24,116,124 (repurchase proceeds $23,642,085) | 23,642,000 | 23,642,000 | |||||||||
Repurchase agreement with | |||||||||||
ING Financial Markets LLC, dated 08/31/15, due 09/01/15 at 0.220%, collateralized by common stocks, market value $37,287,488 (repurchase proceeds $34,076,208) | 34,076,000 | 34,076,000 | |||||||||
Repurchase agreement with | |||||||||||
J.P. Morgan Clearing Corp., dated 06/09/15, due 09/04/15 at 0.540%, collateralized by corporate bonds with various maturities to 05/01/32, market value $10,518,079 (repurchase proceeds $9,561,461) | 9,549,000 | 9,549,000 | |||||||||
Repurchase agreement with | |||||||||||
J.P. Morgan Clearing Corp., dated 06/22/15, due 09/21/15 at 0.530%, collateralized by corporate bonds with various maturities to 05/01/32, market value $10,571,546 (repurchase proceeds $9,612,861) | 9,600,000 | 9,600,000 |
See Accompanying Notes to Financial Statements.
8
BofA Cash Reserves
August 31, 2015
Repurchase Agreements (continued)
Par ($) | Value ($) | ||||||||||
Repurchase agreement with | |||||||||||
J.P. Morgan Clearing Corp., dated 08/31/15, due 10/15/15 at 0.425%, collateralized by exchange-traded funds, market value $88,001,036 (repurchase proceeds $80,042,460) (h) | 80,000,000 | 80,000,000 | |||||||||
Repurchase agreement with | |||||||||||
J.P. Morgan Clearing Corp., dated 08/31/15, due 11/30/15 at 0.625%, collateralized by a common stock and corporate bonds with various maturities to 12/15/37, market value $142,420,526 (repurchase proceeds $129,675,415) (h) | 129,471,000 | 129,471,000 | |||||||||
Repurchase agreement with | |||||||||||
Mitsubishi UFJ Securities USA, Inc., dated 08/31/15, due 09/01/15 at 0.130%, collateralized by U.S. Government Agency obligations with various maturities to 08/01/43, market value $44,519,081 (repurchase proceeds $43,646,158) | 43,646,000 | 43,646,000 | |||||||||
Repurchase agreement with | |||||||||||
Mizuho Securities USA, Inc., dated 07/09/15, due 10/05/15 at 0.280%, collateralized by corporate bonds with various maturities to 06/15/25, market value $89,754,952 (repurchase proceeds $85,503,482) | 85,445,000 | 85,445,000 | |||||||||
Repurchase agreement with | |||||||||||
RBC Capital Markets, dated 08/10/15, due 09/10/15 at 0.250%, collateralized by corporate bonds with various maturities to 08/04/25, market value $69,087,954 (repurchase proceeds $65,802,163) (h) | 65,788,000 | 65,788,000 |
Par ($) | Value ($) | ||||||||||
Repurchase agreement with | |||||||||||
RBC Capital Markets, dated 08/31/15, due 10/30/15 at 0.250%, collateralized by corporate bonds with various maturities to 02/15/25, market value $108,082,501 (repurchase proceeds $102,977,890) (b)(h) | 102,935,000 | 102,935,000 | |||||||||
Repurchase agreement with | |||||||||||
RBC Capital Markets, dated 08/31/15, due 10/30/15 at 0.300%, collateralized by common stocks and exchange-traded funds, market value $50,410,130 (repurchase proceeds $45,849,914) (h) | 45,827,000 | 45,827,000 | |||||||||
Repurchase agreement with | |||||||||||
Societe Generale NY, dated 08/31/15, due 09/01/15 at 0.150%, collateralized by U.S. Government Agency obligations with various maturities to 07/20/65, market value $111,297,794 (repurchase proceeds $109,115,455) | 109,115,000 | 109,115,000 | |||||||||
Repurchase agreement with | |||||||||||
TD Securities USA LLC, dated 08/31/15, due 09/01/15 at 0.130%, collateralized by U.S. Treasury obligations with various maturities to 11/30/20, market value $42,663,724 (repurchase proceeds $41,827,151) | 41,827,000 | 41,827,000 | |||||||||
Repurchase agreement with | |||||||||||
TD Securities USA LLC, dated 08/31/15, due 09/01/15 at 0.140%, collateralized by corporate bonds with various maturities to 04/14/20, market value $22,566,361 (repurchase proceeds $21,491,084) | 21,491,000 | 21,491,000 |
See Accompanying Notes to Financial Statements.
9
BofA Cash Reserves
August 31, 2015
Repurchase Agreements (continued)
Par ($) | Value ($) | ||||||||||
Repurchase agreement with | |||||||||||
Wells Fargo Securities, LLC, dated 07/13/15, due 10/09/15 at 0.490%, collateralized by common stocks and preferred stocks, market value $21,417,633 (repurchase proceeds $19,492,320) | 19,469,000 | 19,469,000 | |||||||||
Repurchase agreement with | |||||||||||
Wells Fargo Securities, LLC, dated 08/05/15, due 09/04/15 at 0.320%, collateralized by corporate bonds with various maturities to 04/06/21, market value $15,865,107 (repurchase proceeds $15,110,028) | 15,106,000 | 15,106,000 | |||||||||
Repurchase agreement with | |||||||||||
Wells Fargo Securities, LLC, dated 08/17/15, due 09/16/15 at 0.330%, collateralized by corporate bonds with various maturities to 04/11/22, market value $10,501,444 (repurchase proceeds $10,002,750) | 10,000,000 | 10,000,000 | |||||||||
Repurchase agreement with | |||||||||||
Wells Fargo Securities, LLC, dated 08/25/15, due 09/01/15 at 0.140%, collateralized by U.S. Government Agency obligations with various maturities to 03/29/18, market value $14,187,187 (repurchase proceeds $13,908,379) | 13,908,000 | 13,908,000 |
Par ($) | Value ($) | ||||||||||
Repurchase agreement with | |||||||||||
Wells Fargo Securities, LLC, dated 08/26/15, due 09/02/15 at 0.120%, collateralized by a U.S. Treasury obligation maturing 08/15/18, market value $56,747,875 (repurchase proceeds $55,635,298) | 55,634,000 | 55,634,000 | |||||||||
Total Repurchase Agreements (cost of $1,961,291,000) | 1,961,291,000 | ||||||||||
Total Investments – 100.0% (cost of $8,929,770,868) (j) | 8,929,770,868 | ||||||||||
Other Assets & Liabilities, Net – 0.0% | 367,064 | ||||||||||
Net Assets – 100.0% | 8,930,137,932 |
Notes to Investment Portfolio:
Portfolio holdings are subject to change periodically and may not be representative of current holdings.
(a) Parenthetical date represents the effective maturity date for the security which may represent the demand date for puttable or callable securities or the prerefunded date for certain securities where applicable.
(b) The interest rate shown on floating rate or variable rate securities reflects the rate at August 31, 2015.
(c) Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At August 31, 2015, these securities, which are not illiquid, amounted to $2,190,692,316 or 24.5% of net assets for the Fund.
(d) The rate shown represents the discount rate at the date of purchase.
(e) Collateralized commercial paper.
(f) Variable rate obligations have long dated final maturities, however, their effective maturity is within 397 days in accordance with a demand feature. These securities are secured by a letter of credit or other credit support agreements from banks. These securities are puttable upon not more than one, seven or thirty business days' notice. Put bonds and notes have a demand feature that matures within one year. The interest rate is changed periodically and the interest rate reflects the rate at August 31, 2015.
(g) See the tables following the Notes to the Investment Portfolio for additional information on the Joint Repurchase Agreement Treasury Account and the Joint Repurchase Agreement Treasury & Agency Account.
(h) This security is subject to a demand feature.
(i) Open repurchase agreement with no specific maturity date.
(j) Cost for federal income tax purposes is $8,929,770,868.
See Accompanying Notes to Financial Statements.
10
BofA Cash Reserves
August 31, 2015
The following table summarizes the inputs used, as of August 31, 2015, 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 | $ | — | $ | 3,071,449,684 | $ | — | $ | 3,071,449,684 | |||||||||||
Total Commercial Paper | — | 1,556,713,435 | — | 1,556,713,435 | |||||||||||||||
Total Asset-Backed Commercial Paper | — | 1,234,354,706 | — | 1,234,354,706 | |||||||||||||||
Total Time Deposits | — | 770,171,000 | — | 770,171,000 | |||||||||||||||
Total Corporate Bonds | — | 155,896,037 | — | 155,896,037 | |||||||||||||||
Total Municipal Bonds | — | 141,175,000 | — | 141,175,000 | |||||||||||||||
Total Government & Agency Obligations | — | 32,820,006 | — | 32,820,006 | |||||||||||||||
Total Closed-End Investment Company | — | 5,900,000 | — | 5,900,000 | |||||||||||||||
Total Repurchase Agreements | — | 1,961,291,000 | — | 1,961,291,000 | |||||||||||||||
Total Investments | $ | — | $ | 8,929,770,868 | $ | — | $ | 8,929,770,868 |
The Fund's assets are assigned to the Level 2 input category which represents short-term obligations which are valued using amortized cost, an income approach which converts future cash flows to a present value based upon the discount or premium at purchase.
For the year ended August 31, 2015, all of the securities held in the Portfolio were Level 2 and there were no transfers to report.
For more information on valuation inputs, please refer to the Security Valuation section in the accompanying Notes to Financial Statements.
At August 31, 2015, the asset allocation of the Fund is as follows:
Asset Allocation | % of Net Assets | ||||||
Certificates of Deposit | 34.4 | ||||||
Commercial Paper | 17.4 | ||||||
Asset-Backed Commercial Paper | 13.8 | ||||||
Time Deposits | 8.6 | ||||||
Corporate Bonds | 1.7 | ||||||
Municipal Bonds | 1.6 | ||||||
Government & Agency Obligations | 0.4 | ||||||
Closed-End Investment Company | 0.1 | ||||||
78.0 | |||||||
Repurchase Agreements | 22.0 | ||||||
Other Assets & Liabilities, Net | 0.0 | ||||||
100.0 |
Joint Repurchase Agreement Treasury Account—At August 31, 2015, certain BofA Funds had undivided interests in the Joint Repurchase Agreement Treasury Account ($3,204,000,000 total principal amount) with a maturity date of September 1, 2015 as follows:
Fund | Principal Amount | Maturity Value | Collateral Value Allocation | ||||||||||||
BofA Cash Reserves | $ | 183,009,000 | $ | 183,009,626 | $ | 186,669,820 | |||||||||
BofA Money Market Reserves | 320,154,000 | 320,155,094 | 326,558,200 | ||||||||||||
BofA Treasury Reserves | 2,694,328,000 | 2,694,337,210 | 2,748,223,987 | ||||||||||||
BofA Government Plus Reserves | 6,509,000 | 6,509,022 | 6,639,203 | ||||||||||||
Total | $ | 3,204,000,000 | $ | 3,204,010,952 | $ | 3,268,091,210 |
The principal amounts of each Fund's interest in the Joint Repurchase Agreement Treasury Account were as follows:
Counterparty | Interest Rate | BofA Cash Reserves | BofA Money Market Reserves | BofA Treasury Reserves | BofA Government Plus Reserves | Total | |||||||||||||||||||||
BNP Paribas Securities Corp. | 0.12 | % | $ | 57,118,914 | $ | 99,923,221 | $ | 840,926,342 | $ | 2,031,523 | $ | 1,000,000,000 | |||||||||||||||
Credit Agricole CIB/US | 0.12 | 69,970,669 | 122,405,946 | 1,030,134,769 | 2,488,616 | 1,225,000,000 | |||||||||||||||||||||
Wells Fargo Securities, LLC | 0.13 | 55,919,417 | 97,824,833 | 823,266,889 | 1,988,861 | 979,000,000 | |||||||||||||||||||||
Total | $ | 183,009,000 | $ | 320,154,000 | $ | 2,694,328,000 | $ | 6,509,000 | $ | 3,204,000,000 |
At August 31, 2015, the Joint Repurchase Agreement Treasury Account was fully collateralized by U.S. Treasury obligations with various maturities to 08/15/2045, market value $3,268,091,210.
See Accompanying Notes to Financial Statements.
11
BofA Cash Reserves
August 31, 2015
Joint Repurchase Agreement Treasury & Agency Account—At August 31, 2015, certain BofA Funds had undivided interests in the Joint Repurchase Agreement Treasury & Agency Account ($1,520,000,000 total principal amount) with a maturity date of September 1, 2015 as follows:
Fund | Principal Amount | Maturity Value | Collateral Value Allocation | ||||||||||||
BofA Cash Reserves | $ | 456,464,000 | $ | 456,465,788 | $ | 465,595,104 | |||||||||
BofA Money Market Reserves | 798,536,000 | 798,539,127 | 814,509,911 | ||||||||||||
BofA Government Plus Reserves | 265,000,000 | 265,001,039 | 270,301,059 | ||||||||||||
Total | $ | 1,520,000,000 | $ | 1,520,005,954 | $ | 1,550,406,074 |
The principal amounts of each Fund's interest in the Joint Repurchase Agreement Treasury & Agency Account were as follows:
BofA Counterparty | Interest Rate | BofA Cash Reserves | BofA Money Market Reserves | Government Plus Reserves | Total | ||||||||||||||||||
Credit Agricole CIB/US | 0.14 | % | $ | 321,326,632 | $ | 562,127,316 | $ | 186,546,052 | $ | 1,070,000,000 | |||||||||||||
RBC Capital Markets | 0.13 | 45,045,789 | 78,802,895 | 26,151,316 | 150,000,000 | ||||||||||||||||||
Wells Fargo Securities, LLC | 0.15 | 90,091,579 | 157,605,789 | 52,302,632 | 300,000,000 | ||||||||||||||||||
Total | $ | 456,464,000 | $ | 798,536,000 | $ | 265,000,000 | $ | 1,520,000,000 |
At August 31, 2015, the Joint Repurchase Agreement Treasury & Agency Account was fully collateralized by U.S. Treasury obligations and U.S. Government Agency obligations with various maturities to 08/20/2065, market value $1,550,406,074.
Acronym | Name | ||||||
AMT | Alternative Minimum Tax | ||||||
FHLB | Federal Home Loan Bank | ||||||
LIQ FAC | Liquidity Facility | ||||||
LOC | Letter of Credit | ||||||
SPA | Stand-by Purchase Agreement |
See Accompanying Notes to Financial Statements.
12
Statement of Assets and Liabilities – BofA Cash Reserves
August 31, 2015
($) | |||||||||||
Assets | Investments, at amortized cost approximating value | 6,968,479,868 | |||||||||
Repurchase agreements, at amortized cost approximating value | 1,961,291,000 | ||||||||||
Total investments, at value | 8,929,770,868 | ||||||||||
Receivable for: | |||||||||||
Fund shares sold | 20,213 | ||||||||||
Interest | 2,710,526 | ||||||||||
Expense reimbursement due from investment advisor | 32,394 | ||||||||||
Trustees' deferred compensation plan | 57,630 | ||||||||||
Prepaid expenses | 75,749 | ||||||||||
Total Assets | 8,932,667,380 | ||||||||||
Liabilities | Payable to custodian bank | 12,544 | |||||||||
Payable for: | |||||||||||
Fund shares repurchased | 78,760 | ||||||||||
Distributions | 244,241 | ||||||||||
Investment advisory fee | 1,230,475 | ||||||||||
Administration fee | 338,234 | ||||||||||
Pricing and bookkeeping fees | 17,736 | ||||||||||
Transfer agent fee | 73,216 | ||||||||||
Trustees' fees | 7,897 | ||||||||||
Custody fee | 47,736 | ||||||||||
Distribution and service fees | 139,036 | ||||||||||
Chief Compliance Officer expenses | 4,030 | ||||||||||
Trustees' deferred compensation plan | 57,631 | ||||||||||
Other liabilities | 277,912 | ||||||||||
Total Liabilities | 2,529,448 | ||||||||||
Net Assets | 8,930,137,932 | ||||||||||
Net Assets Consist of | Paid-in capital | 8,929,232,036 | |||||||||
Undistributed net investment income | 1,116,633 | ||||||||||
Accumulated net realized loss | (210,737 | ) | |||||||||
Net Assets | 8,930,137,932 |
See Accompanying Notes to Financial Statements.
13
Statement of Assets and Liabilities (continued) – BofA Cash Reserves
August 31, 2015
Adviser Class Shares | Net assets | $ | 1,620,117,250 | ||||||||
Shares outstanding | 1,619,914,382 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Capital Class Shares | Net assets | $ | 5,966,629,265 | ||||||||
Shares outstanding | 5,965,778,579 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Daily Class Shares | Net assets | $ | 512,275,865 | ||||||||
Shares outstanding | 512,214,929 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Institutional Capital Shares | Net assets | $ | 117,465,944 | ||||||||
Shares outstanding | 117,451,979 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Institutional Class Shares | Net assets | $ | 152,406,253 | ||||||||
Shares outstanding | 152,387,921 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Investor Class Shares | Net assets | $ | 7,602,969 | ||||||||
Shares outstanding | 7,602,132 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Investor II Class Shares | Net assets | $ | 12,631,008 | ||||||||
Shares outstanding | 12,629,509 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Liquidity Class Shares | Net assets | $ | 23,967,336 | ||||||||
Shares outstanding | 23,964,483 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Marsico Shares | Net assets | $ | 6,316,096 | ||||||||
Shares outstanding | 6,315,356 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Trust Class Shares | Net assets | $ | 510,725,946 | ||||||||
Shares outstanding | 510,665,107 | ||||||||||
Net asset value per share | $ | 1.00 |
See Accompanying Notes to Financial Statements.
14
Statement of Operations – BofA Cash Reserves
For the Year Ended August 31, 2015
($) | |||||||||||
Investment Income | Interest | 22,984,861 | |||||||||
Expenses | Investment advisory fee | 14,744,648 | |||||||||
Administration fee | 9,669,766 | ||||||||||
Distribution fee: | |||||||||||
Daily Class Shares | 2,004,830 | ||||||||||
Investor Class Shares | 8,416 | ||||||||||
Investor II Class Shares | 13,866 | ||||||||||
Service fee: | |||||||||||
Adviser Class Shares | 3,825,711 | ||||||||||
Daily Class Shares | 1,432,022 | ||||||||||
Investor Class Shares | 21,039 | ||||||||||
Investor II Class Shares | 34,666 | ||||||||||
Liquidity Class Shares | 72,557 | ||||||||||
Marsico Shares | 17,076 | ||||||||||
Shareholder administration fee: | |||||||||||
Institutional Class Shares | 54,775 | ||||||||||
Investor II Class Shares | 13,866 | ||||||||||
Marsico Shares | 6,830 | ||||||||||
Trust Class Shares | 567,643 | ||||||||||
Transfer agent fee | 394,739 | ||||||||||
Pricing and bookkeeping fees | 185,047 | ||||||||||
Trustees' fees | 90,050 | ||||||||||
Custody fee | 291,436 | ||||||||||
Chief Compliance Officer expenses | 22,821 | ||||||||||
Other expenses | 1,178,680 | ||||||||||
Total Expenses | 34,650,484 | ||||||||||
Fees waived or expenses reimbursed by investment advisor and/or administrator | (7,888,937 | ) | |||||||||
Fees waived by distributor: | |||||||||||
Adviser Class Shares | (3,149,669 | ) | |||||||||
Daily Class Shares | (3,190,871 | ) | |||||||||
Institutional Class Shares | (6,760 | ) | |||||||||
Investor Class Shares | (25,931 | ) | |||||||||
Investor II Class Shares | (56,417 | ) | |||||||||
Liquidity Class Shares | (60,329 | ) | |||||||||
Marsico Shares | (20,955 | ) | |||||||||
Trust Class Shares | (319,513 | ) | |||||||||
Net Expenses | 19,931,102 | ||||||||||
Net Investment Income | 3,053,759 | ||||||||||
Net realized gain on investments | 46,470 | ||||||||||
Net Increase Resulting from Operations | 3,100,229 |
See Accompanying Notes to Financial Statements.
15
Statement of Changes in Net Assets – BofA Cash Reserves
Year Ended August 31, | |||||||||||||||
Increase (Decrease) in Net Assets | 2015 ($) | 2014 ($) | |||||||||||||
Operations | Net investment income | 3,053,759 | 1,962,115 | ||||||||||||
Net realized gain on investments | 46,470 | 18,358 | |||||||||||||
Net increase resulting from operations | 3,100,229 | 1,980,473 | |||||||||||||
Distributions to Shareholders | From net investment income: | ||||||||||||||
Adviser Class Shares | (105,284 | ) | (156,582 | ) | |||||||||||
Capital Class Shares | (3,477,646 | ) | (2,298,358 | ) | |||||||||||
Daily Class Shares | (40,093 | ) | (74,109 | ) | |||||||||||
Institutional Capital Shares | (62,227 | ) | (57,136 | ) | |||||||||||
Institutional Class Shares | (22,154 | ) | (23,863 | ) | |||||||||||
Investor Class | (563 | ) | (1,798 | ) | |||||||||||
Investor II Class Shares | (963 | ) | (2,021 | ) | |||||||||||
Liquidity Class Shares | (2,520 | ) | (2,812 | ) | |||||||||||
Marsico Shares | (486 | ) | (827 | ) | |||||||||||
Trust Class Shares | (41,884 | ) | (61,684 | ) | |||||||||||
Total distributions to shareholders | (3,753,820 | ) | (2,679,190 | ) | |||||||||||
Net Capital Stock Transactions | (1,188,411,948 | ) | 1,141,226,709 | ||||||||||||
Contribution from advisor (See Note 3) | 1,850,000 | 220,000 | |||||||||||||
Total increase (decrease) in net assets | (1,187,215,539 | ) | 1,140,747,992 | ||||||||||||
Net Assets | Beginning of period | 10,117,353,471 | 8,976,605,479 | ||||||||||||
End of period | 8,930,137,932 | 10,117,353,471 | |||||||||||||
Undistributed net investment income at end of period | 1,116,633 | 1,768,358 |
See Accompanying Notes to Financial Statements.
16
Statement of Changes in Net Assets (continued) – BofA Cash Reserves
Capital Stock Activity | |||||||||||||||||||
Year Ended August 31, | |||||||||||||||||||
2015 | 2014 | ||||||||||||||||||
Shares | Dollars ($) | Shares | Dollars ($) | ||||||||||||||||
Adviser Class Shares | |||||||||||||||||||
Subscriptions | 8,206,232,976 | 8,206,232,976 | 10,552,283,243 | 10,552,283,243 | |||||||||||||||
Distributions reinvested | 2,062 | 2,062 | 3,188 | 3,188 | |||||||||||||||
Redemptions | (7,971,036,953 | ) | (7,971,036,953 | ) | (10,648,494,433 | ) | (10,648,494,433 | ) | |||||||||||
Net increase (decrease) | 235,198,085 | 235,198,085 | (96,208,002 | ) | (96,208,002 | ) | |||||||||||||
Capital Class Shares | |||||||||||||||||||
Subscriptions | 20,601,779,366 | 20,601,779,366 | 18,783,093,745 | 18,783,093,745 | |||||||||||||||
Distributions reinvested | 811,772 | 811,772 | 620,531 | 620,531 | |||||||||||||||
Redemptions | (21,869,939,946 | ) | (21,869,939,946 | ) | (17,045,442,377 | ) | (17,045,442,377 | ) | |||||||||||
Net increase (decrease) | (1,267,348,808 | ) | (1,267,348,808 | ) | 1,738,271,899 | 1,738,271,899 | |||||||||||||
Daily Class Shares | |||||||||||||||||||
Subscriptions | 32,049,943 | 32,049,943 | 53,377,079 | 53,377,079 | |||||||||||||||
Distributions reinvested | 29 | 29 | 61 | 61 | |||||||||||||||
Redemptions | (156,955,775 | ) | (156,955,775 | ) | (222,499,307 | ) | (222,499,307 | ) | |||||||||||
Net decrease | (124,905,803 | ) | (124,905,803 | ) | (169,122,167 | ) | (169,122,167 | ) | |||||||||||
Institutional Capital Shares | |||||||||||||||||||
Subscriptions | 24,854,569 | 24,854,569 | 31,460,688 | 31,460,688 | |||||||||||||||
Distributions reinvested | 59,224 | 59,224 | 55,334 | 55,334 | |||||||||||||||
Redemptions | (41,837,913 | ) | (41,837,913 | ) | (66,440,895 | ) | (66,440,895 | ) | |||||||||||
Net decrease | (16,924,120 | ) | (16,924,120 | ) | (34,924,873 | ) | (34,924,873 | ) | |||||||||||
Institutional Class Shares | |||||||||||||||||||
Subscriptions | 258,449,224 | 258,449,224 | 705,950,485 | 705,950,485 | |||||||||||||||
Distributions reinvested | 20,412 | 20,412 | 22,380 | 22,380 | |||||||||||||||
Redemptions | (237,732,702 | ) | (237,732,702 | ) | (871,888,128 | ) | (871,888,128 | ) | |||||||||||
Net increase (decrease) | 20,736,934 | 20,736,934 | (165,915,263 | ) | (165,915,263 | ) | |||||||||||||
Investor Class Shares | |||||||||||||||||||
Subscriptions | 2,060,976 | 2,060,976 | 2,437,996 | 2,437,996 | |||||||||||||||
Distributions reinvested | 429 | 429 | 1,619 | 1,619 | |||||||||||||||
Redemptions | (10,779,631 | ) | (10,779,631 | ) | (4,616,251 | ) | (4,616,251 | ) | |||||||||||
Net decrease | (8,718,226 | ) | (8,718,226 | ) | (2,176,636 | ) | (2,176,636 | ) | |||||||||||
Investor II Class Shares | |||||||||||||||||||
Subscriptions | 421,079 | 421,079 | 3,953,585 | 3,953,585 | |||||||||||||||
Distributions reinvested | 861 | 861 | 1,796 | 1,796 | |||||||||||||||
Redemptions | (2,980,365 | ) | (2,980,365 | ) | (11,978,557 | ) | (11,978,557 | ) | |||||||||||
Net decrease | (2,558,425 | ) | (2,558,425 | ) | (8,023,176 | ) | (8,023,176 | ) | |||||||||||
Liquidity Class Shares | |||||||||||||||||||
Subscriptions | 26,905,893 | 26,905,893 | 8,419,952 | 8,419,952 | |||||||||||||||
Distributions reinvested | 2,520 | 2,520 | 2,812 | 2,812 | |||||||||||||||
Redemptions | (29,008,006 | ) | (29,008,006 | ) | (9,348,270 | ) | (9,348,270 | ) | |||||||||||
Net decrease | (2,099,593 | ) | (2,099,593 | ) | (925,506 | ) | (925,506 | ) | |||||||||||
Marsico Shares | |||||||||||||||||||
Subscriptions | 2,547,497 | 2,547,497 | 3,374,130 | 3,374,130 | |||||||||||||||
Distributions reinvested | 486 | 486 | 827 | 827 | |||||||||||||||
Redemptions | (3,793,645 | ) | (3,793,645 | ) | (3,501,116 | ) | (3,501,116 | ) | |||||||||||
Net decrease | (1,245,662 | ) | (1,245,662 | ) | (126,159 | ) | (126,159 | ) | |||||||||||
Trust Class Shares | |||||||||||||||||||
Subscriptions | 1,223,239,689 | 1,223,239,689 | 988,748,637 | 988,748,637 | |||||||||||||||
Distributions reinvested | 434 | 434 | 1,223 | 1,223 | |||||||||||||||
Redemptions | (1,243,786,453 | ) | (1,243,786,453 | ) | (1,108,373,268 | ) | (1,108,373,268 | ) | |||||||||||
Net decrease | (20,546,330 | ) | (20,546,330 | ) | (119,623,408 | ) | (119,623,408 | ) |
See Accompanying Notes to Financial Statements.
17
Financial Highlights — BofA Cash Reserves
Selected data for a share outstanding throughout each period is as follows:
Year Ended August 31, | |||||||||||||||||||||||
Adviser Class Shares | 2015 | 2014 | 2013 | 2012 | 2011 | ||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||
Net investment income | — | — | (a) | — | — | — | |||||||||||||||||
Net realized gain (loss) on investments | — | (a) | — | (a) | — | (a) | — | (a) | — | (a) | |||||||||||||
Total from investment operations | — | (a) | — | (a) | — | (a) | — | (a) | — | (a) | |||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||
From net investment income | — | (a) | — | (a) | — | — | — | ||||||||||||||||
Increase from Contribution from Advisor | — | (a) | — | (a) | — | — | — | ||||||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Total return (b)(c) | 0.01 | %(d) | 0.01 | %(d) | 0.00 | % | 0.00 | % | 0.00 | % | |||||||||||||
Ratios to Average Net Assets/Supplemental Data: | |||||||||||||||||||||||
Gross expenses | 0.52 | % | 0.53 | % | 0.52 | % | 0.53 | % | 0.53 | % | |||||||||||||
Net expenses | 0.23 | % | 0.22 | % | 0.29 | %(e) | 0.36 | %(e) | 0.32 | %(e) | |||||||||||||
Waiver/Reimbursement | 0.29 | % | 0.31 | % | 0.23 | % | 0.17 | % | 0.21 | % | |||||||||||||
Net investment income | — | — | %(f) | — | (e) | — | (e) | — | (e) | ||||||||||||||
Net assets, end of period (000s) | $ | 1,620,117 | $ | 1,384,719 | $ | 1,481,000 | $ | 1,741,542 | $ | 1,964,131 |
Past performance is no guarantee of future results.
(a) Rounds to less than $0.001 per share.
(b) Total return at net asset value assuming all distributions reinvested.
(c) 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.
(d) The Fund received a capital contribution from the investment advisor which had an impact of less than 0.01% on total return.
(e) The benefits derived from expense reductions had an impact of less than 0.01%.
(f) Rounds to 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:
Year Ended August 31, | |||||||||||||||||||||||
Capital Class Shares | 2015 | 2014 | 2013 | 2012 | 2011 | ||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||
Net investment income | 0.001 | — | (a) | 0.001 | 0.002 | 0.001 | |||||||||||||||||
Net realized gain (loss) on investments | — | (a) | — | (a) | — | (a) | — | (a) | — | (a) | |||||||||||||
Total from investment operations | 0.001 | — | (a) | 0.001 | 0.002 | 0.001 | |||||||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||
From net investment income | (0.001 | ) | — | (a) | (0.001 | ) | (0.002 | ) | (0.001 | ) | |||||||||||||
Increase from Contribution from Advisor | — | (a) | — | (a) | — | — | — | ||||||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Total return (b)(c) | 0.05 | %(d) | 0.04 | %(d) | 0.09 | % | 0.16 | % | 0.11 | % | |||||||||||||
Ratios to Average Net Assets/Supplemental Data: | |||||||||||||||||||||||
Gross expenses | 0.27 | % | 0.27 | % | 0.27 | % | 0.28 | % | 0.28 | % | |||||||||||||
Net expenses | 0.19 | % | 0.19 | % | 0.20 | %(e) | 0.20 | %(e) | 0.20 | %(e) | |||||||||||||
Waiver/Reimbursement | 0.08 | % | 0.08 | % | 0.07 | % | 0.08 | % | 0.08 | % | |||||||||||||
Net investment income | 0.04 | % | 0.03 | % | 0.09 | %(e) | 0.16 | %(e) | 0.11 | %(e) | |||||||||||||
Net assets, end of period (000s) | $ | 5,966,629 | $ | 7,233,139 | $ | 5,495,170 | $ | 6,563,081 | $ | 4,638,454 |
Past performance is no guarantee of future results.
(a) Rounds to less than $0.001 per share.
(b) Total return at net asset value assuming all distributions reinvested.
(c) 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.
(d) The Fund received a capital contribution from the investment advisor which had an impact of less than 0.01% on total return.
(e) The benefits derived from expense reductions had an impact of less than 0.01%.
See Accompanying Notes to Financial Statements.
19
Financial Highlights — BofA Cash Reserves
Selected data for a share outstanding throughout each period is as follows:
Year Ended August 31, | |||||||||||||||||||||||
Daily Class Shares | 2015 | 2014 | 2013 | 2012 | 2011 | ||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||
Net investment income | — | — | (a) | — | — | — | |||||||||||||||||
Net realized gain (loss) on investments | — | (a) | — | (a) | — | (a) | — | (a) | — | (a) | |||||||||||||
Total from investment operations | — | (a) | — | (a) | — | (a) | — | (a) | — | (a) | |||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||
From net investment income | — | (a) | — | (a) | — | — | — | ||||||||||||||||
Increase from Contribution from Advisor | — | (a) | — | (a) | — | — | — | ||||||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Total return (b)(c) | 0.01 | %(d) | 0.01 | %(d) | 0.00 | % | 0.00 | % | 0.00 | % | |||||||||||||
Ratios to Average Net Assets/Supplemental Data: | |||||||||||||||||||||||
Gross expenses | 0.87 | % | 0.88 | % | 0.87 | % | 0.87 | % | 0.88 | % | |||||||||||||
Net expenses | 0.23 | % | 0.22 | % | 0.29 | %(e) | 0.35 | %(e) | 0.32 | %(e) | |||||||||||||
Waiver/Reimbursement | 0.64 | % | 0.66 | % | 0.58 | % | 0.52 | % | 0.56 | % | |||||||||||||
Net investment income | — | — | %(f) | — | (e) | — | (e) | — | (e) | ||||||||||||||
Net assets, end of period (000s) | $ | 512,276 | $ | 637,122 | $ | 806,286 | $ | 1,074,085 | $ | 1,672,737 |
Past performance is no guarantee of future results.
(a) Rounds to less than $0.001 per share.
(b) Total return at net asset value assuming all distributions reinvested.
(c) 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.
(d) The Fund received a capital contribution from the investment advisor which had an impact of less than 0.01% on total return.
(e) The benefits derived from expense reductions had an impact of less than 0.01%.
(f) Rounds to less than 0.01%.
See Accompanying Notes to Financial Statements.
20
Financial Highlights — BofA Cash Reserves
Selected data for a share outstanding throughout each period is as follows:
Year Ended August 31, | |||||||||||||||||||||||
Institutional Capital Shares | 2015 | 2014 | 2013 | 2012 (a) | 2011 | ||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||
Net investment income | 0.001 | — | (b) | 0.001 | 0.002 | 0.001 | |||||||||||||||||
Net realized gain (loss) on investments | — | (b) | — | (b) | — | (b) | — | (b) | — | (b) | |||||||||||||
Total from investment operations | 0.001 | — | (b) | 0.001 | 0.002 | 0.001 | |||||||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||
From net investment income | (0.001 | ) | — | (b) | (0.001 | ) | (0.002 | ) | (0.001 | ) | |||||||||||||
Increase from Contribution from Advisor | — | (b) | — | (b) | — | — | — | ||||||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Total return (c)(d) | 0.05 | %(e) | 0.04 | %(e) | 0.09 | % | 0.16 | % | 0.11 | % | |||||||||||||
Ratios to Average Net Assets/Supplemental Data: | |||||||||||||||||||||||
Gross expenses | 0.27 | % | 0.27 | % | 0.27 | % | 0.28 | % | 0.28 | % | |||||||||||||
Net expenses | 0.19 | % | 0.19 | % | 0.20 | %(f) | 0.20 | %(f) | 0.20 | %(f) | |||||||||||||
Waiver/Reimbursement | 0.08 | % | 0.08 | % | 0.07 | % | 0.08 | % | 0.08 | % | |||||||||||||
Net investment income | 0.04 | % | 0.03 | % | 0.09 | %(f) | 0.16 | %(f) | 0.11 | %(f) | |||||||||||||
Net assets, end of period (000s) | $ | 117,466 | $ | 134,376 | $ | 169,310 | $ | 226,134 | $ | 353,702 |
Past performance is no guarantee of future results.
(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) 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) The Fund received a capital contribution from the investment advisor which had an impact of less than 0.01% on total return.
(f) The benefits derived from expense reductions had an impact of less than 0.01%.
See Accompanying Notes to Financial Statements.
21
Financial Highlights — BofA Cash Reserves
Selected data for a share outstanding throughout each period is as follows:
Year Ended August 31, | |||||||||||||||||||||||
Institutional Class Shares | 2015 | 2014 | 2013 | 2012 | 2011 | ||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||
Net investment income | — | (a) | — | (a) | — | (a) | 0.001 | 0.001 | |||||||||||||||
Net realized gain (loss) on investments | — | (a) | — | (a) | — | (a) | — | (a) | — | (a) | |||||||||||||
Total from investment operations | — | (a) | — | (a) | — | (a) | 0.001 | 0.001 | |||||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||
From net investment income | — | (a) | — | (a) | — | (a) | (0.001 | ) | (0.001 | ) | |||||||||||||
Increase from Contribution from Advisor | — | (a) | — | (a) | — | — | — | ||||||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Total return (b)(c) | 0.02 | %(d) | 0.01 | %(d) | 0.05 | % | 0.12 | % | 0.07 | % | |||||||||||||
Ratios to Average Net Assets/Supplemental Data: | |||||||||||||||||||||||
Gross expenses | 0.31 | % | 0.32 | % | 0.31 | % | 0.32 | % | 0.32 | % | |||||||||||||
Net expenses | 0.23 | % | 0.22 | % | 0.24 | %(e) | 0.24 | %(e) | 0.24 | %(e) | |||||||||||||
Waiver/Reimbursement | 0.08 | % | 0.10 | % | 0.07 | % | 0.08 | % | 0.08 | % | |||||||||||||
Net investment income | 0.01 | % | — | %(f) | 0.05 | %(e) | 0.12 | %(e) | 0.08 | %(e) | |||||||||||||
Net assets, end of period (000s) | $ | 152,406 | $ | 131,651 | $ | 297,581 | $ | 876,079 | $ | 997,386 |
Past performance is no guarantee of future results.
(a) Rounds to less than $0.001 per share.
(b) Total return at net asset value assuming all distributions reinvested.
(c) 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.
(d) The Fund received a capital contribution from the investment advisor which had an impact of less than 0.01% on total return.
(e) The benefits derived from expense reductions had an impact of less than 0.01%.
(f) Rounds to less than 0.01%.
See Accompanying Notes to Financial Statements.
22
Financial Highlights — BofA Cash Reserves
Selected data for a share outstanding throughout each period is as follows:
Year Ended August 31, | |||||||||||||||||||||||
Investor Class Shares | 2015 | 2014 | 2013 | 2012 | 2011 | ||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||
Net investment income | — | — | (a) | — | — | — | |||||||||||||||||
Net realized gain (loss) on investments | — | (a) | — | (a) | — | (a) | — | (a) | — | (a) | |||||||||||||
Total from investment operations | — | (a) | — | (a) | — | (a) | — | (a) | — | (a) | |||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||
From net investment income | — | (a) | — | (a) | — | — | — | ||||||||||||||||
Increase from Contribution from Advisor | — | (a) | — | (a) | — | — | — | ||||||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Total return (b)(c) | 0.01 | %(d) | 0.01 | %(d) | 0.00 | % | 0.00 | % | 0.00 | % | |||||||||||||
Ratios to Average Net Assets/Supplemental Data: | |||||||||||||||||||||||
Gross expenses | 0.62 | % | 0.63 | % | 0.62 | % | 0.62 | % | 0.63 | % | |||||||||||||
Net expenses | 0.23 | % | 0.22 | % | 0.29 | %(e) | 0.35 | %(e) | 0.32 | %(e) | |||||||||||||
Waiver/Reimbursement | 0.39 | % | 0.41 | % | 0.33 | % | 0.27 | % | 0.31 | % | |||||||||||||
Net investment income | — | — | %(f) | — | (e) | — | (e) | — | (e) | ||||||||||||||
Net assets, end of period (000s) | $ | 7,603 | $ | 16,320 | $ | 18,498 | $ | 24,251 | $ | 30,707 |
Past performance is no guarantee of future results.
(a) Rounds to less than $0.001 per share.
(b) Total return at net asset value assuming all distributions reinvested.
(c) 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.
(d) The Fund received a capital contribution from the investment advisor which had an impact of less than 0.01% on total return.
(e) The benefits derived from expense reductions had an impact of less than 0.01%.
(f) Rounds to less than 0.01%.
See Accompanying Notes to Financial Statements.
23
Financial Highlights — BofA Cash Reserves
Selected data for a share outstanding throughout each period is as follows:
Year Ended August 31, | |||||||||||||||||||||||
Investor II Class Shares | 2015 | 2014 | 2013 | 2012 (a) | 2011 | ||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||
Net investment income | — | — | (b) | — | — | — | |||||||||||||||||
Net realized gain (loss) on investments | — | (b) | — | (b) | — | (b) | — | (b) | — | (b) | |||||||||||||
Total from investment operations | — | (b) | — | (b) | — | (b) | — | (b) | — | (b) | |||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||
From net investment income | — | (b) | — | (b) | — | — | — | ||||||||||||||||
Increase from Contribution from Advisor | — | (b) | — | (b) | — | — | — | ||||||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Total return (c)(d) | 0.01 | %(e) | 0.01 | %(e) | 0.00 | % | 0.00 | % | 0.00 | % | |||||||||||||
Ratios to Average Net Assets/Supplemental Data: | |||||||||||||||||||||||
Gross expenses | 0.72 | % | 0.73 | % | 0.72 | % | 0.72 | % | 0.73 | % | |||||||||||||
Net expenses | 0.23 | % | 0.22 | % | 0.29 | %(f) | 0.35 | %(f) | 0.32 | %(f) | |||||||||||||
Waiver/Reimbursement | 0.49 | % | 0.51 | % | 0.43 | % | 0.37 | % | 0.41 | % | |||||||||||||
Net investment income | — | — | %(g) | — | (f) | — | (f) | — | (f) | ||||||||||||||
Net assets, end of period (000s) | $ | 12,631 | $ | 15,188 | $ | 23,212 | $ | 29,405 | $ | 31,245 |
Past performance is no guarantee of future results.
(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) 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) The Fund received a capital contribution from the investment advisor which had an impact of less than 0.01% on total return.
(f) The benefits derived from expense reductions had an impact of less than 0.01%.
(g) Rounds to less than 0.01%.
See Accompanying Notes to Financial Statements.
24
Financial Highlights — BofA Cash Reserves
Selected data for a share outstanding throughout each period is as follows:
Year Ended August 31, | |||||||||||||||||||||||
Liquidity Class Shares | 2015 | 2014 | 2013 | 2012 | 2011 | ||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||
Net investment income | — | — | (a) | — | (a) | — | (a) | — | (a) | ||||||||||||||
Net realized gain (loss) on investments | — | (a) | — | (a) | — | (a) | — | (a) | — | (a) | |||||||||||||
Total from investment operations | — | (a) | — | (a) | — | (a) | — | (a) | — | (a) | |||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||
From net investment income | — | (a) | — | (a) | — | (a) | — | (a) | — | (a) | |||||||||||||
Increase from Contribution from Advisor | — | (a) | — | (a) | — | — | — | ||||||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Total return (b)(c) | 0.01 | %(d) | 0.01 | %(d) | 0.00 | %(e) | 0.02 | % | 0.00 | %(e) | |||||||||||||
Ratios to Average Net Assets/Supplemental Data: | |||||||||||||||||||||||
Gross expenses | 0.52 | % | 0.53 | % | 0.52 | % | 0.53 | % | 0.53 | % | |||||||||||||
Net expenses | 0.23 | % | 0.22 | % | 0.29 | %(f) | 0.34 | %(f) | 0.31 | %(f) | |||||||||||||
Waiver/Reimbursement | 0.29 | % | 0.31 | % | 0.23 | % | 0.19 | % | 0.22 | % | |||||||||||||
Net investment income | — | — | %(e) | — | %(e)(f) | 0.02 | %(f) | — | %(e)(f) | ||||||||||||||
Net assets, end of period (000s) | $ | 23,967 | $ | 26,064 | $ | 26,991 | $ | 114,588 | $ | 116,540 |
Past performance is no guarantee of future results.
(a) Rounds to less than $0.001 per share.
(b) Total return at net asset value assuming all distributions reinvested.
(c) 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.
(d) The Fund received a capital contribution from the investment advisor which had an impact of less than 0.01% on total return.
(e) Rounds to less than 0.01%.
(f) 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:
Year Ended August 31, | |||||||||||||||||||||||
Marsico Shares | 2015 | 2014 | 2013 | 2012 | 2011 | ||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||
Net investment income | — | — | (a) | — | — | — | |||||||||||||||||
Net realized gain (loss) on investments | — | (a) | — | (a) | — | (a) | — | (a) | — | (a) | |||||||||||||
Total from investment operations | — | (a) | — | (a) | — | (a) | — | (a) | — | (a) | |||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||
From net investment income | — | (a) | — | (a) | — | — | — | ||||||||||||||||
Increase from Contribution from Advisor | — | (a) | — | (a) | — | — | — | ||||||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Total return (b)(c) | 0.01 | %(d) | 0.01 | %(d) | 0.00 | % | 0.00 | % | 0.00 | % | |||||||||||||
Ratios to Average Net Assets/Supplemental Data: | |||||||||||||||||||||||
Gross expenses | 0.62 | % | 0.63 | % | 0.62 | % | 0.62 | % | 0.63 | % | |||||||||||||
Net expenses | 0.23 | % | 0.22 | % | 0.29 | %(e) | 0.35 | %(e) | 0.31 | %(e) | |||||||||||||
Waiver/Reimbursement | 0.39 | % | 0.41 | % | 0.33 | % | 0.27 | % | 0.32 | % | |||||||||||||
Net investment income | — | — | %(f) | — | (e) | — | (e) | — | (e) | ||||||||||||||
Net assets, end of period (000s) | $ | 6,316 | $ | 7,561 | $ | 7,688 | $ | 9,041 | $ | 11,348 |
Past performance is no guarantee of future results.
(a) Rounds to less than $0.001 per share.
(b) Total return at net asset value assuming all distributions reinvested.
(c) 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.
(d) The Fund received a capital contribution from the investment advisor which had an impact of less than 0.01% on total return.
(e) The benefits derived from expense reductions had an impact of less than 0.01%.
(f) Rounds to less than 0.01%.
See Accompanying Notes to Financial Statements.
26
Financial Highlights — BofA Cash Reserves
Selected data for a share outstanding throughout each period is as follows:
Year Ended August 31, | |||||||||||||||||||||||
Trust Class Shares | 2015 | 2014 | 2013 | 2012 | 2011 | ||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||
Net investment income | — | — | (a) | — | (a) | 0.001 | — | (a) | |||||||||||||||
Net realized gain (loss) on investments | — | (a) | — | (a) | — | (a) | — | (a) | — | (a) | |||||||||||||
Total from investment operations | — | (a) | — | (a) | — | (a) | 0.001 | — | (a) | ||||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||
From net investment income | — | (a) | — | (a) | — | (a) | (0.001 | ) | — | (a) | |||||||||||||
Increase from Contribution from Advisor | — | (a) | — | (a) | — | — | — | ||||||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Total return (b)(c) | 0.01 | %(d) | 0.01 | %(d) | 0.01 | % | 0.06 | % | 0.02 | % | |||||||||||||
Ratios to Average Net Assets/Supplemental Data: | |||||||||||||||||||||||
Gross expenses | 0.37 | % | 0.38 | % | 0.37 | % | 0.38 | % | 0.38 | % | |||||||||||||
Net expenses | 0.23 | % | 0.22 | % | 0.28 | %(e) | 0.30 | %(e) | 0.29 | %(e) | |||||||||||||
Waiver/Reimbursement | 0.14 | % | 0.16 | % | 0.09 | % | 0.08 | % | 0.09 | % | |||||||||||||
Net investment income | — | — | %(f) | 0.01 | %(e) | 0.06 | %(e) | 0.02 | %(e) | ||||||||||||||
Net assets, end of period (000s) | $ | 510,726 | $ | 531,213 | $ | 650,870 | $ | 736,836 | $ | 754,638 |
Past performance is no guarantee of future results.
(a) Rounds to less than $0.001 per share.
(b) Total return at net asset value assuming all distributions reinvested.
(c) 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.
(d) The Fund received a capital contribution from the investment advisor which had an impact of less than 0.01% on total return.
(e) The benefits derived from expense reductions had an impact of less than 0.01%.
(f) Rounds to less than 0.01%.
See Accompanying Notes to Financial Statements.
27
Notes to Financial Statements – BofA Cash Reserves
August 31, 2015
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.
The Fund is an investment company and accordingly follows the investment company accounting and reporting guidance of the Financial Accounting Standards Board (FASB) Accounting Standard Codification Topic 946 Financial Services—Investment Companies.
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 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). These investments may trade in markets that are not considered to be active, but whose values are supported by observable inputs such as U.S. government obligations and agency securities, investment-grade corporate bonds and state, municipal and provincial obligations. For money market funds operating under Rule 2a-7 of the 1940 Act, securities are valued at amortized cost which approximates market value and are considered to be valued using Level 2 inputs.
28
BofA Cash Reserves, August 31, 2015
• 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.
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.
The Financial Accounting Standards Board's ("FASB") Accounting Standards Update ("ASU") No. 2011-11 (amended by ASU No. 2013-01): Disclosures about Offsetting Assets and Liabilities ("netting") on the Statement of Assets and Liabilities applies to instruments that are subject to master netting arrangements or similar agreements. The scope of the disclosure requirements is limited to derivative instruments, repurchase agreements and reverse repurchase
agreements, and securities borrowing and securities lending transactions. This information is intended to enable users of the Fund's financial statements to evaluate the effect or potential effect of netting arrangements on the Fund's financial position.
A Master Repurchase Agreement ("MRA") governs transactions between a Fund and select counterparties. A MRA contains provisions for, among other things, initiation, income payments, events of default and maintenance of securities for repurchase agreements. A MRA also permits offsetting with collateral to create one single net payment in the event of default or similar events, including the bankruptcy or insolvency of a counterparty.
For financial reporting purposes, the Fund does not offset financial assets and financial liabilities that are subject to master netting arrangements or similar agreements on the Statement of Assets and Liabilities.
If the seller defaults, the Fund could suffer a loss to the extent that the proceeds from the sale of the underlying securities and other collateral held by the Fund are less than the repurchase price and the Fund's costs associated with delay and enforcement of the repurchase agreement. In addition, in the event of default or insolvency of the seller, a court could determine that a Fund's interest in the collateral is not enforceable, resulting in additional losses to the Fund.
At August 31, 2015, the Fund's investments in repurchase agreements were subject to enforceable MRAs. The repurchase agreements on a net basis were as follows:
Repurchase Agreements | |||||||
Total Gross amount presented in Statement of Assets and Liabilities | $ | 1,961,291,000 | |||||
Non-cash Collateral offsetting (1) | $ | (1,961,291,000 | ) | ||||
Net Amount (2) | $ | — |
(1) At August 31, 2015, the value of the collateral exceeded the value of the related repurchase agreements.
(2) Net amount represents the net amount due from the counterparty in the event of a default based on the contractual set-off rights under the agreement.
29
BofA Cash Reserves, August 31, 2015
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. Expenses directly attributable to a specific class of shares are charged to that share class.
Determination of Class Net Asset Value
All income, expenses (other than class-specific expenses, which are charged to that share class, as shown on the Statement of Operations) and realized 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 based on the following methodologies: income and expenses are allocated to each class based on the settled shares method, while realized gains (losses) are allocated based on the relative net assets of each class.
Federal Income Tax Status
The Fund intends to qualify each year as a "regulated investment company" under Subchapter M of the Internal Revenue Code, as amended, and to distribute substantially all of its tax-exempt or taxable income, if any, for its tax year, and as such will not be subject to federal income taxes. In addition, the Fund intends to distribute in each calendar year substantially all of its net investment income, capital gains and certain other amounts, if any, such that the Fund 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 Contribution
Within the period April 7, 2014 to June 6, 2014, the Advisor made voluntary capital contributions to the Fund in the amount of $220,000.
Within the period September 1, 2014 to August 31, 2015, the Advisor made voluntary capital contributions to the Fund in the amount of $1,850,000.
Note 4. Federal Tax Information
The timing and character of income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP. Reclassifications are made to the Fund's capital accounts for permanent tax differences to reflect income and gains available for distribution (or available capital loss carry forwards) under income tax regulations.
For the year ended August 31, 2015, permanent book and tax basis differences resulting primarily from differing treatments for capital contributions, non-deductible excise tax and non-deductible additional corporate tax payment were identified and reclassified among the components of the Fund's net assets as follows:
Undistributed Net Investment Income | Accumulated Net Realized Gain (Loss) | Paid-In-Capital | |||||||||
$ | 48,336 | $ | 1,850,000 | $ | (1,898,336 | ) |
30
BofA Cash Reserves, August 31, 2015
The tax character of distributions paid during the years ended August 31, 2015 and August 31, 2014 were as follows:
August 31, | |||||||||||
Distributions paid from | 2015 | 2014 | |||||||||
Ordinary Income* | $ | 3,753,820 | $ | 2,679,190 |
* For tax purposes, short-term capital gain distributions, if any, are considered ordinary income distributions.
As of August 31, 2015, the components of distributable earnings on a tax basis were as follows:
Undistributed Tax-Exempt Income | Undistributed Ordinary Income | Undistributed Long-Term Capital Gains | |||||||||
$ | — | $ | 1,360,874 | $ | — |
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, 2015, 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 | $ | 210,737 |
Capital loss carry forwards of $1,896,470 were utilized by the Fund during the year ended August 31, 2015.
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 ("BofA Corp."), 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 | % |
For the year ended August 31, 2015, 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 following annual rates, less the fees payable by the Fund as
31
BofA Cash Reserves, August 31, 2015
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 year ended August 31, 2015, the 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.
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, 2015. 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.
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 (together, 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 the 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.
Distribution and Shareholder Servicing Fees
BofA Distributors, Inc. (the "Distributor"), an affiliate of the Advisor and an indirect, wholly owned subsidiary of BofA Corp., 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 sales support services. The Distributor is entitled to retain some or all fees payable under the Distribution Plan in certain circumstances, including but not limited to, instances when there is no broker of record or when certain qualification standards have not been met by the broker of record. In certain instances, payments will continue to be made pursuant to the Distribution Plan with respect to shares held in classes that are closed to new investors and shares held by specific investors who are not eligible to make additional purchases in a particular share class. In addition, during the fiscal year, the Distributor agreed to voluntarily waive a portion of its Distribution fee for a limited time period.
32
BofA Cash Reserves, August 31, 2015
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.
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, 2015 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 the 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, 2015, so that the Fund's ordinary operating expenses (excluding any acquired fund fees and expenses, 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 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.
33
BofA Cash Reserves, August 31, 2015
At August 31, 2015, the amounts potentially recoverable pursuant to this arrangement are as follows:
Amount of potential recovery expiring August 31: | Total potential | Amount recovered during the year | |||||||||||||||||
2018 | 2017 | 2016 | recovery | ended 08/31/2015 | |||||||||||||||
$ | 6,905,961 | $ | 7,150,998 | $ | 7,018,579 | $ | 21,075,538 | $ | — |
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%. Pursuant to a September 25, 2015 amendment, an annual administration fee of $25,000 is also accrued and apportioned to each fund participating in the line of credit based on the average net assets of the participating funds. Prior to the September 25, 2015 amendment, an annual administration fee of $10,000 was accrued and apportioned to each participating fund under the same terms.
For the year ended August 31, 2015, 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
34
BofA Cash Reserves, August 31, 2015
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 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.
Note 9. Money Market Fund Regulatory Matters
On July 23, 2014, the Securities and Exchange Commission voted to amend Rule 2a-7, which governs money market funds (such as the Fund). The majority of these amendments take effect in 2016. The most significant change is a requirement that institutional (i.e. large volume institutions such as banks, trusts, insurance companies, etc.) prime and institutional municipal money market funds move to a floating net asset value. Retail (i.e. a money market mutual fund that has policies and procedures reasonably designed to limit all beneficial owners of the money market fund to natural persons) prime, municipal, government and treasury money market funds will continue to transact at a stable $1.00 share price. In addition, the boards of trustees of non-government money market funds may impose a temporary liquidity fee of up to 2% of the value of a redemption and/or suspend (or "gate") redemptions temporarily should a money market fund's level of weekly liquid assets fall below 30% of its total assets. At this time, the Fund's management is evaluating the implications of the reforms and their impact on the Fund, including potential effects on the Fund's operations and returns.
35
Report of Independent Registered Public Accounting Firm
To the Trustees of BofA Funds Series Trust and Shareholders of BofA Cash Reserves
In our opinion, the accompanying statement of assets and liabilities, including the investment portfolio, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of BofA Cash Reserves (the "Fund") (a series of BofA Funds Series Trust) at August 31, 2015, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and the financial highlights for each of the periods indicated, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as "financial statements") are the responsibility of the Fund's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at August 31, 2015 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
Boston, Massachusetts
October 21, 2015
36
Federal Income Tax Information (Unaudited) – BofA Cash Reserves
The Fund will notify shareholders in January 2016 of amounts for use in preparing 2015 income tax returns.
The Fund designates the maximum allowable as qualified interest income for nonresident alien shareholders, as provided in the American Jobs Creation Act of 2004.
37
Fund Governance
The Trustees serve terms of indefinite duration. The names, addresses and ages of the Trustees and officers of the Funds in the BofA Funds Series Trust, the year each was first elected or appointed to office, their principal business occupations during at least the last five years, the number of Funds overseen by each Trustee and other directorships they hold are shown below. Each officer listed below serves as an officer of each Fund in the BofA Funds Series Trust.
Independent Trustees
Name, Address, and Year of Birth, Position with Funds, Year First Elected or Appointed to Office | Principal Occupation(s) During Past Five Years, Number of Funds in BofA Funds Series Trust Overseen by Trustee, Other Directorships Held | ||||||
Harrison M. Bains (Born 1943) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Trustee (since 2011) | Retired. Oversees 11 Funds. Mercer Funds (9 funds); BG Medicine, Inc. (life sciences). | ||||||
Paul Glasserman (Born 1962) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Trustee (since 2011) | Jack R. Anderson Professor of Business—Columbia Business School, since 2000 (Senior Vice Dean, 2004-2008; Professor, 1995-2000); Visiting Scholar—Federal Reserve Bank of New York, from 2008 to 2012; Consultant to the U.S. Treasury, 2011-2014; Independent consultant to financial firms since 1995. Oversees 11 Funds. | ||||||
William A. Hawkins (Born 1942) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Trustee (since 2005)1 | Managing Director—Overton Partners (financial consulting), August 2010 to present. Oversees 11 Funds. Columbia Funds (127 funds). | ||||||
R. Glenn Hilliard (Born 1943) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Trustee (since 2005)1 | Chairman and Chief Executive Officer—Hilliard Group LLC (investing and consulting), from 2003 through current; Non-Executive Director & Chairman—CNO Financial Group, Inc. (formerly Conseco, Inc.) (insurance), September 2003-May 2011. Oversees 11 Funds. Columbia Funds (127 funds). | ||||||
William J. Kelly (Born 1960) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Trustee (since 2011) | Chief Executive Officer—Chartered Alternative Investment Analyst Association, January 2014 to present. Oversees 11 Funds. | ||||||
Debra Perry (Born 1951) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Trustee (since 2011) | Retired. Managing Member—Perry Consulting LLC (advisory firm), from 2008 through 2014. Oversees 11 Funds. Korn/Ferry International (recruiting); Sanford C. Bernstein Fund, Inc. (18 funds); Board Member—PartnerRE (reinsurance). |
1 Includes service as trustees of Columbia Funds Series Trust, the predecessor trust.
The Statement of Additional Information includes additional information about the Trustees of the Funds and is available, without charge, upon request by calling 888-331-0904. (Institutional Investors, please call 800-353-0828.)
38
Fund Governance (continued)
Officers
Name, Address, and Year of Birth, Position with Funds, Year First Elected or Appointed to Office | Principal Occupation(s) During Past Five Years | ||||||
Michael J. Pelzar (Born 1968) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 President (since 2010) | President, BofA Global Capital Management Group, LLC since May 2010; Managing Director and Head of Product Management of the Advisor from 2007 to 2010. | ||||||
Kenneth B. Crotty (Born 1961) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Vice President (since 2015) Assistant Treasurer (2014-2015) | Chief Operating Officer, BofA Global Capital Management Group, LLC since August 2013; President KBC Consulting 2012-2013; Global Chief Operating Officer of Mercer Investments and President of Mercer Investments US 2006-2012. | ||||||
Jeffrey R. Coleman (Born 1969) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Senior Vice President, Chief Financial Officer, Chief Accounting Officer (since 2010) and Treasurer (since 2009) | Managing Director of Fund Administration and Transfer Agency Oversight of the Advisor since May 2010; Director of Fund Administration of the Advisor since January 2006. | ||||||
Marina Belaya (Born 1967) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Secretary and Chief Legal Officer (since 2013) | Assistant General Counsel, Director, Bank of America since July 2007. | ||||||
James R. Bordewick (Born 1959) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Senior Vice President and Chief Compliance Officer (since 2010) | Chief Compliance Officer of U.S. Trust, Bank of America Private Wealth Management since 2012; Chief Compliance Officer of the Advisor and Managing Director, Bank of America since May 2010. | ||||||
Barry S. Vallan (Born 1969) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Deputy Treasurer (since 2010) and Controller (since 2006) | Director of Fund Administration of the Advisor since May 2010; Vice President—Fund Treasury of the Advisor since October 2004; Vice President—Fund Administration of the Advisor since May 2002. |
39
Fund Governance (continued)
Officers (continued)
Name, Address, and Year of Birth, Position with Funds, Year First Elected or Appointed to Office | Principal Occupation(s) During Past Five Years | ||||||
Patrick Campbell (Born 1957) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Vice President (since 2015) Assistant Treasurer (2010-2015) | Director of Transfer Agency Oversight, BofA Global Capital Management Group, LLC since May 2010. | ||||||
Rana J. Wright (Born 1978) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Assistant Secretary (since 2014) | Assistant General Counsel and Director, Bank of America, and Chief Legal Officer, BofA Global Capital Management Group, LLC, since June 2014; Partner, Reed Smith LLP, 2012 to 2014; Associate, Reed Smith LLP, 2003 to 2011. | ||||||
Nitin Mehra (Born 1977) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Vice President (since 2015) Assistant Treasurer (2013-2015) | Managing Director and Head of Strategy and Product at BofA Global Capital Management Group, LLC since May 2011; Managing Director of Strategy and Product at BofA Global Capital Management Group, LLC from 2010-2011; Director of Product Strategy and Development of the Advisor from 2008-2010. |
40
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.
An investment in money market mutual funds is not insured or guaranteed by Bank of America, N.A. or its affiliates, or by the Federal Deposit Insurance Corporation or any other government agency. Although money market mutual funds seek to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in money market mutual funds.
BofA® 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
41
BofA Global Capital Management
100 Federal Street
Boston, MA 02110
Questions or comments regarding your account or investment in the Funds should be directed to:
Boston Financial Data Services
P.O. Box 8723
Boston, MA 02266-8723
Retail Investors: 888.331.0904
Institutional Investors: 800.353.0828
BofA Cash Reserves
Annual Report, August 31, 2015
© 2015 Bank of America Corporation. All rights reserved.
BofA Distributors, Inc.
100 Federal Street, Boston, MA 02110
888.331.0904 (Institutional Investors: 800.353.0828) www.bofacapital.com
AR-CSHR-1015
BofA Funds
Annual Report
August 31, 2015
• 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 | 7 | ||||||
Statement of Operations | 9 | ||||||
Statement of Changes in Net Assets | 10 | ||||||
Financial Highlights | 12 | ||||||
Notes to Financial Statements | 21 | ||||||
Report of Independent Registered Public Accounting Firm | 29 | ||||||
Federal Income Tax Information | 30 | ||||||
Fund Governance | 31 | ||||||
Important Information About This Report | 37 |
The views expressed in this report reflect the current views of the respective parties. These views are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to predict so actual outcomes and results may differ significantly from the views expressed. These views are subject to change at any time based upon economic, market or other conditions and the respective parties disclaim any responsibility to update such views. These views may not be relied on as investment advice and, because investment decisions for a BofA Fund are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any particular BofA Fund. References to specific securities should not be construed as a recommendation or investment advice.
President's Message
To Our Valued Shareholders:
A year ago the consensus within the financial community was that the interest rate environment would soon be more hospitable to money market fund investors as a strengthening U.S. economy finally moved the Federal Reserve ("the Fed") to raise short-term interest rates. That rate hike has yet to materialize, so for liquidity investors, the most important news out of Washington has come not from the Fed, but from the U.S. Securities and Exchange Commission ("SEC"), which adopted sweeping changes to the regulations governing U.S. money market funds.
To take effect in October 2016, the amendments to Rule 2a-7 under the Investment Company Act of 1940 include two important reforms that are prompting investors to reevaluate their liquidity investment strategies:
• Institutional prime and institutional municipal money market funds must "float" their net asset values ("NAVs"), which means the value of the funds' shares would be based on the market value of their underlying securities. Only government funds and funds serving retail investors—defined as "natural persons"—would retain their stable, $1-per-share NAVs.
• The boards of trustees of non-government money market funds may impose a temporary liquidity fee of up to 2% of the value of a redemption or to suspend or "gate" redemptions temporarily should a money market fund's level of weekly liquid assets fall below 30% of its total assets.
These changes are part of a multi-year effort on the part of the SEC to make money market funds more resilient during market crises, when heavy redemption activity can exert strong downward pressure on funds' NAVs.
After extensive analysis, we have concluded that the impact of the rule changes will be less significant than many investors first believed. With regard to floating NAV funds, for example, fund managers still will go to great lengths to maintain the $1-per-share NAV after the floating NAV rule takes effect. If there is any movement around the $1 mark, that variation likely would be very limited under normal market conditions because of the preponderance of short-term, high-quality securities in money market funds. As for liquidity fees and redemption gates, these measures would be a last resort for fund managers because of the reputational damage money market fund companies would incur were they to impose these measures.
Recognizing the importance of money market fund reform to our shareholders, BofA Global Capital Management has launched a series of whitepapers analyzing the potential impact of the rule changes on clients' liquidity-management programs. These papers are available at www.bofacapital.com. Our preparations for the implementation of the reforms are proceeding, and we anticipate no problems meeting the October 2016 compliance deadline.
Shifting back to the macroeconomic environment, the Fed held the benchmark federal funds rate steady in September, but we believe the drop in the U.S. unemployment rate and steady economic growth should allow the central bank to begin increasing the federal funds rate from the current 0% to .25% rate—in the near future. This, in our view, will mark the beginning of a gradual increase in rates that over time should translate into potentially more attractive yields for money market fund investors. We are positioning the BofA Funds to capture the potential benefits of a rising-rate environment.
Given the complexity of modern financial markets and the ever-present threat of unforeseen investment challenges, the managers of the BofA Funds will continue to employ a conservative investment process designed to achieve your most important goals: principal protection, a high degree of liquidity and competitive risk-adjusted yields. We believe our conservative investment posture; our focus on the management of liquidity investments; and the resources available to us as part of one of the world's largest financial institutions position BofA Global Capital Management to help you reach your liquidity objectives.
On behalf of everyone at BofA Global Capital Management, I thank you for the opportunity to have served you over the past year. We appreciate your business, and we look forward to working with you in the months and years ahead.
Sincerely,
Michael Pelzar
President, BofA Global Capital Management
ARQ5HMRY
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 $1,000. Please refer to the Fund's prospectus for additional details.
3/1/15 – 8/31/15 (Unaudited)
Account value at the beginning of the period ($) | 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 | 1,024.75 | 0.45 | 0.46 | 0.09 | ||||||||||||||||||||||||
Capital Class Shares | 1,000.00 | 1,000.00 | 1,000.20 | 1,024.75 | 0.45 | 0.46 | 0.09 | ||||||||||||||||||||||||
Daily Class Shares | 1,000.00 | 1,000.00 | 1,000.20 | 1,024.70 | 0.50 | 0.51 | 0.10 | ||||||||||||||||||||||||
Institutional Capital Shares | 1,000.00 | 1,000.00 | 1,000.20 | 1,024.75 | 0.45 | 0.46 | 0.09 | ||||||||||||||||||||||||
Institutional Class Shares | 1,000.00 | 1,000.00 | 1,000.20 | 1,024.75 | 0.45 | 0.46 | 0.09 | ||||||||||||||||||||||||
Investor Class Shares | 1,000.00 | 1,000.00 | 1,000.20 | 1,024.75 | 0.45 | 0.46 | 0.09 | ||||||||||||||||||||||||
Investor II Class Shares | 1,000.00 | 1,000.00 | 1,000.20 | 1,024.75 | 0.45 | 0.46 | 0.09 | ||||||||||||||||||||||||
Liquidity Class Shares | 1,000.00 | 1,000.00 | 1,000.20 | 1,024.75 | 0.45 | 0.46 | 0.09 | ||||||||||||||||||||||||
Trust Class Shares | 1,000.00 | 1,000.00 | 1,000.20 | 1,024.75 | 0.45 | 0.46 | 0.09 |
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 Plus Reserves
August 31, 2015
Government & Agency Obligations – 41.0% | |||||||||||
Par ($) | Value ($) | ||||||||||
U.S. Government Agencies—41.0% | |||||||||||
Federal Farm Credit Bank | |||||||||||
0.164% 10/03/16 (09/03/15) (a)(b) | 11,935,000 | 11,930,558 | |||||||||
0.173% 03/20/17 (09/20/15) (a)(b) | 16,995,000 | 16,993,115 | |||||||||
0.174% 09/01/15 | 3,960,000 | 3,960,000 | |||||||||
0.174% 08/01/16 (09/01/15) (a)(b) | 20,000,000 | 19,999,122 | |||||||||
0.176% 09/06/16 (09/06/15) (a)(b) | 5,065,000 | 5,064,634 | |||||||||
0.180% 01/24/17 (09/24/15) (a)(b) | 4,320,000 | 4,319,726 | |||||||||
0.189% 03/02/17 (09/02/15) (a)(b) | 7,660,000 | 7,662,363 | |||||||||
0.189% 10/01/15 (09/01/15) (a)(b) | 1,330,000 | 1,330,011 | |||||||||
0.189% 12/01/16 (09/01/15) (a)(b) | 8,618,000 | 8,618,041 | |||||||||
0.192% 10/08/15 (09/08/15) (a)(b) | 4,729,000 | 4,729,019 | |||||||||
0.194% 09/14/15 | 37,000 | 37,000 | |||||||||
0.197% 11/29/16 (09/29/15) (a)(b) | 215,000 | 215,055 | |||||||||
0.199% 06/03/16 (09/03/15) (a)(b) | 317,000 | 316,928 | |||||||||
0.200% 01/13/16 (09/01/15) (a)(b) | 7,705,000 | 7,704,857 | |||||||||
0.201% 02/06/17 (09/06/15) (a)(b) | 7,866,000 | 7,869,654 | |||||||||
0.204% 11/14/16 (09/14/15) (a)(b) | 2,295,000 | 2,295,004 | |||||||||
0.205% 11/19/15 (09/19/15) (a)(b) | 2,195,000 | 2,195,015 | |||||||||
0.205% 02/23/17 (09/23/15) (a)(b) | 1,701,000 | 1,701,258 | |||||||||
0.208% 06/17/16 (09/17/15) (a)(b) | 2,350,000 | 2,350,268 | |||||||||
0.209% 10/03/16 (09/03/15) (a)(b) | 3,045,000 | 3,045,563 | |||||||||
0.210% 10/22/15 (09/01/15) (a)(b) | 980,000 | 980,021 | |||||||||
0.210% 01/04/16 (09/01/15) (a)(b) | 125,000 | 124,998 | |||||||||
0.210% 07/13/17 (09/01/15) (a)(b) | 10,875,000 | 10,872,947 | |||||||||
0.211% 10/11/16 (09/11/15) (a)(b) | 990,000 | 990,148 | |||||||||
0.212% 07/08/16 (09/08/15) (a)(b) | 1,500,000 | 1,499,999 |
Par ($) | Value ($) | ||||||||||
0.214% 09/14/16 (09/14/15) (a)(b) | 5,800,000 | 5,801,632 | |||||||||
0.215% 01/19/16 (09/19/15) (a)(b) | 4,395,000 | 4,395,377 | |||||||||
0.219% 06/02/16 (09/02/15) (a)(b) | 500,000 | 500,117 | |||||||||
0.219% 01/03/17 (09/03/15) (a)(b) | 6,950,000 | 6,951,535 | |||||||||
0.219% 08/26/16 (09/26/15) (a)(b) | 530,000 | 530,133 | |||||||||
0.220% 04/18/16 (09/18/15) (a)(b) | 2,990,000 | 2,990,542 | |||||||||
0.221% 06/05/17 (09/05/15) (a)(b) | 500,000 | 500,181 | |||||||||
0.223% 09/12/16 (09/12/15) (a)(b) | 3,643,000 | 3,644,206 | |||||||||
0.225% 09/22/15 | 1,286,000 | 1,286,030 | |||||||||
0.228% 12/28/16 (09/28/15) (a)(b) | 4,055,000 | 4,057,740 | |||||||||
0.229% 10/26/15 (09/26/15) (a)(b) | 1,000,000 | 1,000,043 | |||||||||
0.229% 04/26/17 (09/26/15) (a)(b) | 640,000 | 640,112 | |||||||||
0.230% 09/18/15 | 2,100,000 | 2,100,058 | |||||||||
0.233% 06/20/17 (09/20/15) (a)(b) | 9,805,000 | 9,813,053 | |||||||||
0.233% 02/13/17 (09/13/15) (a)(b) | 885,000 | 885,776 | |||||||||
0.248% 01/17/17 (09/17/15) (a)(b) | 2,430,000 | 2,432,030 | |||||||||
0.248% 04/17/17 (09/17/15) (a)(b) | 3,442,000 | 3,445,834 | |||||||||
0.249% 10/26/15 (09/26/15) (a)(b) | 575,000 | 575,044 | |||||||||
0.250% 09/10/15 | 1,500,000 | 1,500,051 | |||||||||
0.250% 12/21/15 | 10,865,000 | 10,865,238 | |||||||||
0.250% 02/01/16 (09/01/15) (a)(b) | 300,000 | 300,089 | |||||||||
0.250% 02/24/16 (09/24/15) (a)(b) | 2,154,000 | 2,154,550 | |||||||||
0.253% 02/27/17 (09/27/15) (a)(b) | 1,680,000 | 1,680,980 | |||||||||
0.273% 04/20/16 (09/20/15) (a)(b) | 3,097,000 | 3,098,356 | |||||||||
0.286% 12/06/16 (09/06/15) (a)(b) | 1,855,000 | 1,857,158 | |||||||||
0.420% 10/15/15 | 830,000 | 830,247 | |||||||||
1.500% 11/16/15 | 250,000 | 250,633 | |||||||||
4.875% 12/16/15 | 4,344,000 | 4,402,568 |
See Accompanying Notes to Financial Statements.
2
BofA Government Plus Reserves
August 31, 2015
Government & Agency Obligations (continued) | |||||||||||
Par ($) | Value ($) | ||||||||||
Federal Home Loan Bank | |||||||||||
0.100% 09/23/15 | 16,850,000 | 16,849,737 | |||||||||
0.125% 09/02/15 | 6,925,000 | 6,924,993 | |||||||||
0.125% 09/08/15 | 680,000 | 679,992 | |||||||||
0.125% 11/25/15 | 90,000 | 89,954 | |||||||||
0.130% 09/11/15 | 2,960,000 | 2,960,013 | |||||||||
0.147% 01/09/17 (09/09/15) (a)(b) | 23,035,000 | 23,034,151 | |||||||||
0.150% 10/02/15 | 4,195,000 | 4,194,955 | |||||||||
0.155% 10/14/15 (c) | 3,530,000 | 3,529,346 | |||||||||
0.160% 09/25/15 | 195,000 | 195,004 | |||||||||
0.160% 10/07/15 (c) | 7,960,000 | 7,958,726 | |||||||||
0.164% 02/14/17 (09/14/15) (a)(b) | 14,170,000 | 14,170,000 | |||||||||
0.170% 11/20/15 (c) | 80,938,000 | 80,907,423 | |||||||||
0.175% 11/20/15 (c) | 4,815,000 | 4,813,128 | |||||||||
0.180% 11/09/15 (c) | 540,000 | 539,814 | |||||||||
0.180% 11/23/15 (c) | 210,000 | 209,913 | |||||||||
0.180% 12/02/15 (c) | 595,000 | 594,726 | |||||||||
0.180% 12/03/15 (c) | 1,485,000 | 1,484,310 | |||||||||
0.180% 12/09/15 (c) | 740,000 | 739,634 | |||||||||
0.190% 09/08/15 | 1,435,000 | 1,435,013 | |||||||||
0.190% 09/17/15 | 4,775,000 | 4,775,088 | |||||||||
0.190% 09/29/15 | 14,000,000 | 14,000,740 | |||||||||
0.190% 10/14/15 | 1,850,000 | 1,850,037 | |||||||||
0.200% 09/15/15 | 1,480,000 | 1,480,032 | |||||||||
0.200% 09/18/15 | 3,330,000 | 3,330,100 | |||||||||
0.200% 09/18/15 | 1,700,000 | 1,700,057 | |||||||||
0.200% 09/25/15 | 26,310,000 | 26,311,725 | |||||||||
0.200% 09/29/15 | 530,000 | 530,031 | |||||||||
0.203% 08/17/17 (09/20/15) (a)(b) | 9,670,000 | 9,670,000 | |||||||||
0.210% 10/13/15 | 6,305,000 | 6,305,342 | |||||||||
0.220% 10/07/15 (09/01/15) (a)(b) | 2,240,000 | 2,240,194 | |||||||||
0.270% 12/15/15 | 4,860,000 | 4,860,379 | |||||||||
0.480% 09/18/15 | 320,000 | 320,053 | |||||||||
1.625% 09/28/15 | 1,500,000 | 1,501,669 | |||||||||
1.750% 09/11/15 | 245,000 | 245,108 | |||||||||
2.875% 09/11/15 | 4,580,000 | 4,583,368 | |||||||||
4.750% 09/11/15 | 1,550,000 | 1,551,941 | |||||||||
5.000% 12/21/15 | 240,000 | 243,427 | |||||||||
Federal Home Loan Mortgage Corp. | |||||||||||
0.160% 09/11/15 (c) | 27,125,000 | 27,123,794 | |||||||||
0.178% 10/16/15 (09/16/15) (a)(b) | 13,875,000 | 13,874,998 | |||||||||
0.198% 01/13/17 (09/13/15) (a)(b) | 28,000,000 | 28,006,843 | |||||||||
0.215% 01/05/16 (c) | 40,180,000 | 40,149,765 | |||||||||
0.220% 01/11/16 (c) | 80,355,000 | 80,290,180 |
Par ($) | Value ($) | ||||||||||
0.240% 11/04/15 (c) | 5,025,000 | 5,022,856 | |||||||||
0.240% 11/16/15 (c) | 970,000 | 969,509 | |||||||||
0.250% 12/07/15 (c) | 4,501,000 | 4,497,968 | |||||||||
0.420% 09/18/15 | 18,018,000 | 18,020,282 | |||||||||
0.450% 09/04/15 | 11,192,000 | 11,192,290 | |||||||||
0.450% 11/24/15 | 2,425,000 | 2,425,960 | |||||||||
0.500% 09/25/15 | 7,595,000 | 7,596,836 | |||||||||
1.750% 09/10/15 | 37,925,000 | 37,939,851 | |||||||||
4.750% 11/17/15 | 3,537,000 | 3,570,475 | |||||||||
Federal National Mortgage Association | |||||||||||
0.150% 09/23/15 (c) | 503,000 | 502,954 | |||||||||
0.209% 07/25/16 (09/25/15) (a)(b) | 8,000,000 | 8,000,257 | |||||||||
0.218% 08/15/16 (09/15/15) (a)(b) | 8,952,000 | 8,953,264 | |||||||||
0.219% 08/26/16 (09/26/15) (a)(b) | 1,935,000 | 1,935,243 | |||||||||
0.220% 01/05/16 (c) | 5,355,000 | 5,350,877 | |||||||||
0.234% 04/01/16 (10/01/15) (a)(b) | 70,000 | 69,980 | |||||||||
0.375% 12/21/15 | 32,692,000 | 32,708,346 | |||||||||
0.460% 01/20/16 (09/01/15) (a)(b) | 1,205,000 | 1,206,251 | |||||||||
0.500% 09/28/15 | 36,040,000 | 36,049,514 | |||||||||
0.500% 10/22/15 | 2,270,000 | 2,271,048 | |||||||||
1.625% 10/26/15 | 1,429,000 | 1,432,123 | |||||||||
1.875% 09/09/15 | 1,050,000 | 1,050,389 | |||||||||
1.875% 10/15/15 | 900,000 | 901,847 | |||||||||
2.000% 09/21/15 | 46,000 | 46,046 | |||||||||
2.000% 09/28/15 | 1,000,000 | 1,001,387 | |||||||||
2.200% 09/16/15 | 2,435,000 | 2,436,999 | |||||||||
4.375% 10/15/15 | 3,688,000 | 3,706,613 | |||||||||
U.S. Government Agencies Total | 850,409,485 | ||||||||||
Total Government & Agency Obligations (cost of $850,409,485) | 850,409,485 |
Repurchase Agreements – 59.0%
Joint Repurchase Agreement | |||||||||||
Treasury & Agency Account, dated 08/31/15, due 09/01/15 (repurchase proceeds $265,001,039) (d) | 265,000,000 | 265,000,000 | |||||||||
Joint Repurchase Agreement | |||||||||||
Treasury Account, dated 08/31/15, due 09/01/15 (repurchase proceeds $6,509,022) (d) | 6,509,000 | 6,509,000 |
See Accompanying Notes to Financial Statements.
3
BofA Government Plus Reserves
August 31, 2015
Repurchase Agreements (continued) | |||||||||||
Par ($) | Value ($) | ||||||||||
Repurchase agreement with | |||||||||||
ABN Amro NV, dated 08/31/15, due 09/01/15 at 0.140%, collateralized by U.S. Treasury obligations and U.S. Government Agency obligations with various maturities to 11/01/44, market value $102,000,460 (repurchase proceeds $100,000,389) | 100,000,000 | 100,000,000 | |||||||||
Repurchase agreement with | |||||||||||
Goldman Sachs & Co., dated 08/31/15, due 09/01/15 at 0.110%, collateralized by U.S. Government Agency obligations with various maturities to 09/01/45, market value $45,900,140 (repurchase proceeds $45,000,138) | 45,000,000 | 45,000,000 | |||||||||
Repurchase agreement with | |||||||||||
HSBC Securities USA, Inc., dated 08/31/15, due 09/01/15 at 0.130%, collateralized by U.S. Government Agency obligations with various maturities to 01/01/45, market value $229,504,072 (repurchase proceeds $225,000,813) | 225,000,000 | 225,000,000 | |||||||||
Repurchase agreement with | |||||||||||
Mitsubishi UFJ Securities USA, Inc., dated 08/31/15, due 09/01/15 at 0.130%, collateralized by a U.S. Treasury obligation and U.S. Government Agency obligations with various maturities to 07/15/45, market value $204,000,737 (repurchase proceeds $200,000,722) | 200,000,000 | 200,000,000 |
Par ($) | Value ($) | ||||||||||
Repurchase agreement with | |||||||||||
Societe Generale NY, dated 08/31/15, due 09/01/15 at 0.150%, collateralized by U.S. Government Agency obligations with various maturities to 07/01/45, market value $153,000,000 (repurchase proceeds $150,000,625) | 150,000,000 | 150,000,000 | |||||||||
Repurchase agreement with | |||||||||||
TD Securities USA LLC, dated 08/27/15, due 09/03/15 at 0.100%, collateralized by U.S. Treasury obligations with various maturities to 05/15/30, market value $51,000,712 (repurchase proceeds $50,000,972) | 50,000,000 | 50,000,000 | |||||||||
Repurchase agreement with | |||||||||||
TD Securities USA LLC, dated 08/31/15, due 09/01/15 at 0.130%, collateralized by a U.S. Treasury obligation maturing 03/31/18, market value $25,500,105 (repurchase proceeds $25,000,090) | 25,000,000 | 25,000,000 | |||||||||
Repurchase agreement with | |||||||||||
Wells Fargo Bank, N.A., dated 08/24/15, due 10/15/15 at 0.170%, collateralized by a U.S. Government Agency obligation maturing 07/01/45, market value $10,200,385 (repurchase proceeds $10,002,456) | 10,000,000 | 10,000,000 | |||||||||
Repurchase agreement with | |||||||||||
Wells Fargo Securities, LLC, dated 07/06/15, due 09/04/15 at 0.130%, collateralized by U.S. Government Agency obligations with various maturities to 08/14/18, market value $15,303,840 (repurchase proceeds $15,003,250) | 15,000,000 | 15,000,000 |
See Accompanying Notes to Financial Statements.
4
BofA Government Plus Reserves
August 31, 2015
Repurchase Agreements (continued) | |||||||||||
Par ($) | Value ($) | ||||||||||
Repurchase agreement with | |||||||||||
Wells Fargo Securities, LLC, dated 08/05/15, due 09/08/15 at 0.130%, collateralized by U.S. Government Agency obligations with various maturities to 03/14/36, market value $20,402,889 (repurchase proceeds $20,002,456) | 20,000,000 | 20,000,000 | |||||||||
Repurchase agreement with | |||||||||||
Wells Fargo Securities, LLC, dated 08/06/15, due 09/15/15 at 0.130%, collateralized by a U.S. Government Agency obligation maturing 03/29/18, market value $10,203,592 (repurchase proceeds $10,001,444) | 10,000,000 | 10,000,000 | |||||||||
Repurchase agreement with | |||||||||||
Wells Fargo Securities, LLC, dated 08/25/15, due 09/01/15 at 0.140%, collateralized by a U.S. Treasury obligation maturing 10/31/17, market value $51,001,480 (repurchase proceeds $50,001,361) | 50,000,000 | 50,000,000 | |||||||||
Repurchase agreement with | |||||||||||
Wells Fargo Securities, LLC, dated 08/26/15, due 09/02/15 at 0.120%, collateralized by a U.S. Treasury obligation maturing 10/31/17, market value $51,001,080 (repurchase proceeds $50,001,167) | 50,000,000 | 50,000,000 | |||||||||
Total Repurchase Agreements (cost of $1,221,509,000) | 1,221,509,000 | ||||||||||
Total Investments – 100.0% (cost of $2,071,918,485) (e) | 2,071,918,485 | ||||||||||
Other Assets & Liabilities, Net – 0.0% | 673,611 | ||||||||||
Net Assets – 100.0% | 2,072,592,096 |
Notes to Investment Portfolio:
Portfolio holdings are subject to change periodically and may not be representative of current holdings.
(a) The interest rate shown on floating rate or variable rate securities reflects the rate at August 31, 2015.
(b) Parenthetical date represents the effective maturity date for the security which may represent the demand date for puttable or callable securities or the prerefunded date for certain securities where applicable.
(c) The rate shown represents the discount rate at the date of purchase.
(d) See the tables following the Notes to the Investment Portfolio for additional information on the Joint Repurchase Agreement Treasury Account and the Joint Repurchase Agreement Treasury & Agency Account.
(e) Cost for federal income tax purposes is $2,071,918,485.
The following table summarizes the inputs used, as of August 31, 2015, 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 | $ | — | $ | 850,409,485 | $ | — | $ | 850,409,485 | |||||||||||
Total Repurchase Agreements | — | 1,221,509,000 | — | 1,221,509,000 | |||||||||||||||
Total Investments | $ | — | $ | 2,071,918,485 | $ | — | $ | 2,071,918,485 |
The Fund's assets are assigned to the Level 2 input category which represents short-term obligations which are valued using amortized cost, an income approach which converts future cash flows to a present value based upon the discount or premium at purchase.
For the year ended August 31, 2015, all of the securities held in the Portfolio were Level 2 and there were no transfers to report.
For more information on valuation inputs, please refer to the Security Valuation section in the accompanying Notes to Financial Statements.
At August 31, 2015, the asset allocation of the Fund is as follows:
Asset Allocation | % of Net Assets | ||||||
Government & Agency Obligations | 41.0 | ||||||
Repurchase Agreements | 59.0 | ||||||
100.0 | |||||||
Other Assets & Liabilities, Net | 0.0 | ||||||
100.0 |
See Accompanying Notes to Financial Statements.
5
BofA Government Plus Reserves
August 31, 2015
Joint Repurchase Agreement Treasury Account—At August 31, 2015, certain BofA Funds had undivided interests in the Joint Repurchase Agreement Treasury Account ($3,204,000,000 total principal amount) with a maturity date of September 1, 2015 as follows:
Fund | Principal Amount | Maturity Value | Collateral Value Allocation | ||||||||||||
BofA Cash Reserves | $ | 183,009,000 | $ | 183,009,626 | $ | 186,669,820 | |||||||||
BofA Money Market Reserves | 320,154,000 | 320,155,094 | 326,558,200 | ||||||||||||
BofA Treasury Reserves | 2,694,328,000 | 2,694,337,210 | 2,748,223,987 | ||||||||||||
BofA Government Plus Reserves | 6,509,000 | 6,509,022 | 6,639,203 | ||||||||||||
Total | $ | 3,204,000,000 | $ | 3,204,010,952 | $ | 3,268,091,210 |
The principal amounts of each Fund's interest in the Joint Repurchase Agreement Treasury Account were as follows:
Counterparty | Interest Rate | BofA Cash Reserves | BofA Money Market Reserves | BofA Treasury Reserves | BofA Government Plus Reserves | Total | |||||||||||||||||||||
BNP Paribas Securities Corp. | 0.12 | % | $ | 57,118,914 | $ | 99,923,221 | $ | 840,926,342 | $ | 2,031,523 | $ | 1,000,000,000 | |||||||||||||||
Credit Agricole CIB/US | 0.12 | 69,970,669 | 122,405,946 | 1,030,134,769 | 2,488,616 | 1,225,000,000 | |||||||||||||||||||||
Wells Fargo Securities, LLC | 0.13 | 55,919,417 | 97,824,833 | 823,266,889 | 1,988,861 | 979,000,000 | |||||||||||||||||||||
Total | $ | 183,009,000 | $ | 320,154,000 | $ | 2,694,328,000 | $ | 6,509,000 | $ | 3,204,000,000 |
At August 31, 2015, the Joint Repurchase Agreement Treasury Account was fully collateralized by U.S. Treasury obligations with various maturities to 08/15/2045, market value $3,268,091,210.
Joint Repurchase Agreement Treasury & Agency Account—At August 31, 2015, certain BofA Funds had undivided interests in the Joint Repurchase Agreement Treasury & Agency Account ($1,520,000,000 total principal amount) with a maturity date of September 1, 2015 as follows:
Fund | Principal Amount | Maturity Value | Collateral Value Allocation | ||||||||||||
BofA Cash Reserves | $ | 456,464,000 | $ | 456,465,788 | $ | 465,595,104 | |||||||||
BofA Money Market Reserves | 798,536,000 | 798,539,127 | 814,509,911 | ||||||||||||
BofA Government Plus Reserves | 265,000,000 | 265,001,039 | 270,301,059 | ||||||||||||
Total | $ | 1,520,000,000 | $ | 1,520,005,954 | $ | 1,550,406,074 |
The principal amounts of each Fund's interest in the Joint Repurchase Agreement Treasury & Agency Account were as follows:
Counterparty | Interest Rate | BofA Cash Reserves | BofA Money Market Reserves | BofA Government Plus Reserves | Total | ||||||||||||||||||
Credit Agricole CIB/US | 0.14 | % | $ | 321,326,632 | $ | 562,127,316 | $ | 186,546,052 | $ | 1,070,000,000 | |||||||||||||
RBC Capital Markets | 0.13 | 45,045,789 | 78,802,895 | 26,151,316 | 150,000,000 | ||||||||||||||||||
Wells Fargo Securities, LLC | 0.15 | 90,091,579 | 157,605,789 | 52,302,632 | 300,000,000 | ||||||||||||||||||
Total | $ | 456,464,000 | $ | 798,536,000 | $ | 265,000,000 | $ | 1,520,000,000 |
At August 31, 2015, the Joint Repurchase Agreement Treasury & Agency Account was fully collateralized by U.S. Treasury obligations and U.S. Government Agency obligations with various maturities to 08/20/2065, market value $1,550,406,074.
See Accompanying Notes to Financial Statements.
6
Statement of Assets and Liabilities – BofA Government Plus Reserves
August 31, 2015
($) | |||||||||||
Assets | Investments, at amortized cost approximating value | 850,409,485 | |||||||||
Repurchase agreements, at amortized cost approximating value | 1,221,509,000 | ||||||||||
Total investments, at value | 2,071,918,485 | ||||||||||
Cash | 264 | ||||||||||
Receivable for: | |||||||||||
Interest | 949,640 | ||||||||||
Expense reimbursement due from investment advisor | 19,976 | ||||||||||
Trustees' deferred compensation plan | 12,950 | ||||||||||
Prepaid expenses | 9,038 | ||||||||||
Total Assets | 2,072,910,353 | ||||||||||
Liabilities | Payable for: | ||||||||||
Distributions | 12,399 | ||||||||||
Investment advisory fee | 142,300 | ||||||||||
Administration fee | 28,418 | ||||||||||
Pricing and bookkeeping fees | 16,483 | ||||||||||
Transfer agent fee | 2,146 | ||||||||||
Trustees' fees | 3,556 | ||||||||||
Audit fee | 35,027 | ||||||||||
Custody fee | 10,256 | ||||||||||
Chief Compliance Officer expenses | 1,778 | ||||||||||
Trustees' deferred compensation plan | 12,950 | ||||||||||
Other liabilities | 52,944 | ||||||||||
Total Liabilities | 318,257 | ||||||||||
Net Assets | 2,072,592,096 | ||||||||||
Net Assets Consist of | Paid-in capital | 2,072,599,443 | |||||||||
Overdistributed net investment income | (7,347 | ) | |||||||||
Net Assets | 2,072,592,096 |
See Accompanying Notes to Financial Statements.
7
Statement of Assets and Liabilities (continued) – BofA Government Plus Reserves
August 31, 2015
Adviser Class Shares | Net assets | $ | 1,673,626 | ||||||||
Shares outstanding | 1,673,617 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Capital Class Shares | Net assets | $ | 1,965,819,879 | ||||||||
Shares outstanding | 1,965,805,769 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Daily Class Shares | Net assets | $ | 654,022 | ||||||||
Shares outstanding | 654,017 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Institutional Capital Shares | Net assets | $ | 30,092,813 | ||||||||
Shares outstanding | 30,092,637 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Institutional Class Shares | Net assets | $ | 36,608,336 | ||||||||
Shares outstanding | 36,608,107 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Investor Class Shares | Net assets | $ | 233,676 | ||||||||
Shares outstanding | 233,674 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Investor II Class Shares | Net assets | $ | 5,066,459 | ||||||||
Shares outstanding | 5,066,430 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Liquidity Class Shares | Net assets | $ | 11,324 | ||||||||
Shares outstanding | 11,324 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Trust Class Shares | Net assets | $ | 32,431,961 | ||||||||
Shares outstanding | 32,431,705 | ||||||||||
Net asset value per share | $ | 1.00 |
See Accompanying Notes to Financial Statements.
8
Statement of Operations – BofA Government Plus Reserves
For the Year Ended August 31, 2015
($) | |||||||||||
Investment Income | Interest | 2,056,627 | |||||||||
Expenses | Investment advisory fee | 3,207,873 | |||||||||
Administration fee | 1,054,042 | ||||||||||
Distribution fee: | |||||||||||
Daily Class Shares | 4,231 | ||||||||||
Investor Class Shares | 467 | ||||||||||
Investor II Class Shares | 2,529 | ||||||||||
Service fee: | |||||||||||
Adviser Class Shares | 7,243 | ||||||||||
Daily Class Shares | 3,022 | ||||||||||
Investor Class Shares | 1,169 | ||||||||||
Investor II Class Shares | 6,323 | ||||||||||
Liquidity Class Shares | 10,184 | ||||||||||
Shareholder administration fee: | |||||||||||
Institutional Class Shares | 15,937 | ||||||||||
Investor II Class Shares | 2,529 | ||||||||||
Trust Class Shares | 59,261 | ||||||||||
Transfer agent fee | 33,505 | ||||||||||
Pricing and bookkeeping fees | 171,579 | ||||||||||
Trustees' fees | 40,235 | ||||||||||
Custody fee | 62,785 | ||||||||||
Chief Compliance Officer expenses | 10,258 | ||||||||||
Other expenses | 385,182 | ||||||||||
Total Expenses | 5,078,354 | ||||||||||
Fees waived or expenses reimbursed by investment advisor and/or administrator | (3,621,847 | ) | |||||||||
Fees waived by distributor: | |||||||||||
Adviser Class Shares | (7,241 | ) | |||||||||
Daily Class Shares | (7,221 | ) | |||||||||
Institutional Class Shares | (16,041 | ) | |||||||||
Investor Class Shares | (1,635 | ) | |||||||||
Investor II Class Shares | (11,382 | ) | |||||||||
Liquidity Class Shares | (10,178 | ) | |||||||||
Trust Class Shares | (59,118 | ) | |||||||||
Net Expenses | 1,343,691 | ||||||||||
Net Investment Income | 712,936 | ||||||||||
Net realized gain on investments | 145 | ||||||||||
Net Increase Resulting from Operations | 713,081 |
See Accompanying Notes to Financial Statements.
9
Statement of Changes in Net Assets – BofA Government Plus Reserves
Year Ended August 31, | |||||||||||||||
Increase (Decrease) in Net Assets | 2015 ($) | 2014 ($) | |||||||||||||
Operations | Net investment income | 712,936 | 421,346 | ||||||||||||
Net realized gain on investments | 145 | 2,339 | |||||||||||||
Net increase resulting from operations | 713,081 | 423,685 | |||||||||||||
Distributions to Shareholders | From net investment income: | ||||||||||||||
Adviser Class Shares | (1,159 | ) | (1,610 | ) | |||||||||||
Capital Class Shares | (660,162 | ) | (381,979 | ) | |||||||||||
Daily Class Shares | (484 | ) | (178 | ) | |||||||||||
Institutional Capital Shares | (8,652 | ) | (52 | ) | |||||||||||
Institutional Class Shares | (15,938 | ) | (15,311 | ) | |||||||||||
Investor Class Shares | (187 | ) | (114 | ) | |||||||||||
Investor II Class Shares | (1,012 | ) | (478 | ) | |||||||||||
Liquidity Class Shares | (1,629 | ) | (2,049 | ) | |||||||||||
Trust Class Shares | (23,706 | ) | (19,576 | ) | |||||||||||
From net realized gains: | |||||||||||||||
Adviser Class Shares | (3 | ) | (6 | ) | |||||||||||
Capital Class Shares | (2,229 | ) | (3,414 | ) | |||||||||||
Daily Class Shares | (1 | ) | (1 | ) | |||||||||||
Institutional Capital Shares | (2 | ) | — | (a) | |||||||||||
Institutional Class Shares | (50 | ) | (93 | ) | |||||||||||
Investor Class Shares | (1 | ) | (1 | ) | |||||||||||
Investor II Class Shares | (2 | ) | (3 | ) | |||||||||||
Liquidity Class Shares | (7 | ) | (15 | ) | |||||||||||
Trust Class Shares | (56 | ) | (120 | ) | |||||||||||
Total distributions to shareholders | (715,280 | ) | (425,000 | ) | |||||||||||
Net Capital Stock Transactions | 666,854,441 | 803,643,165 | |||||||||||||
Total increase in net assets | 666,852,242 | 803,641,850 | |||||||||||||
Net Assets | Beginning of period | 1,405,739,854 | 602,098,004 | ||||||||||||
End of period | 2,072,592,096 | 1,405,739,854 | |||||||||||||
Overdistributed net investment income at end of period | (7,347 | ) | (7,486 | ) |
(a) Rounds to less than $1.
See Accompanying Notes to Financial Statements.
10
Statement of Changes in Net Assets (continued) – BofA Government Plus Reserves
Capital Stock Activity | |||||||||||||||||||
Year Ended August 31, | |||||||||||||||||||
2015 | 2014 | ||||||||||||||||||
Shares | Dollars ($) | Shares | Dollars ($) | ||||||||||||||||
Adviser Class Shares | |||||||||||||||||||
Subscriptions | 2,915,000 | 2,915,000 | 10,150,000 | 10,150,000 | |||||||||||||||
Distributions reinvested | 1,137 | 1,137 | 1,598 | 1,598 | |||||||||||||||
Redemptions | (4,129,833 | ) | (4,129,833 | ) | (13,975,948 | ) | (13,975,948 | ) | |||||||||||
Net decrease | (1,213,696 | ) | (1,213,696 | ) | (3,824,350 | ) | (3,824,350 | ) | |||||||||||
Capital Class Shares | |||||||||||||||||||
Subscriptions | 5,462,151,980 | 5,462,151,980 | 5,376,677,668 | 5,376,677,668 | |||||||||||||||
Distributions reinvested | 549,942 | 549,942 | 292,342 | 292,342 | |||||||||||||||
Redemptions | (4,815,830,163 | ) | (4,815,830,163 | ) | (4,561,771,395 | ) | (4,561,771,395 | ) | |||||||||||
Net increase | 646,871,759 | 646,871,759 | 815,198,615 | 815,198,615 | |||||||||||||||
Daily Class Shares | |||||||||||||||||||
Subscriptions | 14,477,570 | 14,477,570 | 10,016,603 | 10,016,603 | |||||||||||||||
Distributions reinvested | 35 | 35 | 35 | 35 | |||||||||||||||
Redemptions | (14,352,330 | ) | (14,352,330 | ) | (9,688,549 | ) | (9,688,549 | ) | |||||||||||
Net increase | 125,275 | 125,275 | 328,089 | 328,089 | |||||||||||||||
Institutional Capital Shares | |||||||||||||||||||
Subscriptions | 30,107,627 | 30,107,627 | 1,795,099 | 1,795,099 | |||||||||||||||
Distributions reinvested | — | — | 13 | 13 | |||||||||||||||
Redemptions | (1,525,010 | ) | (1,525,010 | ) | (340,095 | ) | (340,095 | ) | |||||||||||
Net increase | 28,582,617 | 28,582,617 | 1,455,017 | 1,455,017 | |||||||||||||||
Institutional Class Shares | |||||||||||||||||||
Subscriptions | 168,998,925 | 168,998,925 | 158,360,000 | 158,360,000 | |||||||||||||||
Distributions reinvested | 15,988 | 15,988 | 15,404 | 15,404 | |||||||||||||||
Redemptions | (168,010,639 | ) | (168,010,639 | ) | (145,400,000 | ) | (145,400,000 | ) | |||||||||||
Net increase | 1,004,274 | 1,004,274 | 12,975,404 | 12,975,404 | |||||||||||||||
Investor Class Shares | |||||||||||||||||||
Subscriptions | 5,954,258 | 5,954,258 | 1,162,043 | 1,162,043 | |||||||||||||||
Distributions reinvested | 31 | 31 | 45 | 45 | |||||||||||||||
Redemptions | (6,186,320 | ) | (6,186,320 | ) | (920,076 | ) | (920,076 | ) | |||||||||||
Net increase (decrease) | (232,031 | ) | (232,031 | ) | 242,012 | 242,012 | |||||||||||||
Investor II Class Shares | |||||||||||||||||||
Subscriptions | 6,921,658 | 6,921,658 | 5,347,319 | 5,347,319 | |||||||||||||||
Distributions reinvested | 26 | 26 | 35 | 35 | |||||||||||||||
Redemptions | (3,643,602 | ) | (3,643,602 | ) | (4,913,455 | ) | (4,913,455 | ) | |||||||||||
Net increase | 3,278,082 | 3,278,082 | 433,899 | 433,899 | |||||||||||||||
Liquidity Class Shares | |||||||||||||||||||
Distributions reinvested | 1,546 | 1,546 | 2,064 | 2,064 | |||||||||||||||
Redemptions | (5,131,245 | ) | (5,131,245 | ) | (1 | ) | (1 | ) | |||||||||||
Net increase (decrease) | (5,129,699 | ) | (5,129,699 | ) | 2,063 | 2,063 | |||||||||||||
Trust Class Shares | |||||||||||||||||||
Subscriptions | 183,522,414 | 183,522,414 | 103,478,485 | 103,478,485 | |||||||||||||||
Distributions reinvested | 362 | 362 | 508 | 508 | |||||||||||||||
Redemptions | (189,954,916 | ) | (189,954,916 | ) | (126,646,577 | ) | (126,646,577 | ) | |||||||||||
Net decrease | (6,432,140 | ) | (6,432,140 | ) | (23,167,584 | ) | (23,167,584 | ) |
See Accompanying Notes to Financial Statements.
11
Financial Highlights – BofA Government Plus Reserves
Selected data for a share outstanding throughout each period is as follows:
Year Ended August 31, | |||||||||||||||||||||||
Adviser Class Shares | 2015 | 2014 | 2013 | 2012 | 2011 | ||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||
Net investment income | — | (a) | — | (a) | — | (a) | — | (a) | — | ||||||||||||||
Net realized gain (loss) on investments | — | (a) | — | (a) | — | (a) | — | — | |||||||||||||||
Total from investment operations | — | (a) | — | (a) | — | (a) | — | (a) | — | ||||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||
From net investment income | — | (a) | — | (a) | — | (a) | — | (a) | — | ||||||||||||||
From net realized gains | — | (a) | — | (a) | — | — | — | ||||||||||||||||
Total distributions to shareholders | — | (a) | — | (a) | — | (a) | — | (a) | — | ||||||||||||||
Increase from Contribution from Advisor | — | — | — | — | — | (a) | |||||||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Total return (b)(c) | 0.04 | % | 0.04 | % | 0.02 | % | 0.01 | % | 0.00 | %(d) | |||||||||||||
Ratios to Average Net Assets/Supplemental Data: | |||||||||||||||||||||||
Gross expenses | 0.53 | % | 0.55 | % | 0.60 | % | 0.58 | % | 0.56 | % | |||||||||||||
Net expenses | 0.07 | %(e) | 0.06 | % | 0.15 | %(f) | 0.16 | %(f) | 0.22 | %(f) | |||||||||||||
Waiver/Reimbursement | 0.46 | % | 0.49 | % | 0.45 | % | 0.42 | % | 0.34 | % | |||||||||||||
Net investment income | 0.04 | % | 0.04 | % | 0.02 | %(f) | 0.01 | %(f) | — | (f) | |||||||||||||
Net assets, end of period (000s) | $ | 1,674 | $ | 2,887 | $ | 6,712 | $ | 6,106 | $ | 6,956 |
Past performance is no guarantee of future results.
(a) Rounds to less than $0.001 per share.
(b) Total return at net asset value assuming all distributions reinvested.
(c) 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.
(d) The Fund received a capital contribution from the investment advisor which had an impact of less than 0.01% on total return.
(e) 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.
(f) 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:
Year Ended August 31, | |||||||||||||||||||||||
Capital Class Shares | 2015 | 2014 | 2013 | 2012 (a) | 2011 | ||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||
Net investment income | — | (b) | — | (b) | — | (b) | — | (b) | — | (b) | |||||||||||||
Net realized gain (loss) on investments | — | (b) | — | (b) | — | (b) | — | — | |||||||||||||||
Total from investment operations | — | (b) | — | (b) | — | (b) | — | (b) | — | (b) | |||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||
From net investment income | — | (b) | — | (b) | — | (b) | — | (b) | — | (b) | |||||||||||||
From net realized gains | — | (b) | — | (b) | — | — | — | ||||||||||||||||
Total distributions to shareholders | — | (b) | — | (b) | — | (b) | — | (b) | — | (b) | |||||||||||||
Increase from Contribution from Advisor | — | — | — | — | — | (b) | |||||||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Total return (c)(d) | 0.04 | % | 0.04 | % | 0.02 | % | 0.01 | % | 0.01 | %(e) | |||||||||||||
Ratios to Average Net Assets/Supplemental Data: | |||||||||||||||||||||||
Gross expenses | 0.28 | % | 0.30 | % | 0.34 | % | 0.33 | % | 0.31 | % | |||||||||||||
Net expenses | 0.08 | % | 0.06 | % | 0.14 | %(f) | 0.16 | %(f) | 0.17 | %(f) | |||||||||||||
Waiver/Reimbursement | 0.20 | % | 0.24 | % | 0.20 | % | 0.17 | % | 0.14 | % | |||||||||||||
Net investment income | 0.04 | % | 0.04 | % | 0.02 | %(f) | 0.01 | %(f) | 0.01 | %(f) | |||||||||||||
Net assets, end of period (000s) | $ | 1,965,820 | $ | 1,318,950 | $ | 503,751 | $ | 338,932 | $ | 492,086 |
Past performance is no guarantee of future results.
(a) On October 1, 2011, Retail A shares were converted into Capital Class shares.
(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) The Fund received a capital contribution from the investment advisor which had an impact of less than 0.01% on total return.
(f) 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:
Year Ended August 31, | |||||||||||||||||||
Daily Class Shares | 2015 | 2014 | 2013 | 2012 (a) | |||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||
Income from Investment Operations: | |||||||||||||||||||
Net investment income | — | (b) | — | (b) | — | (b) | — | (b) | |||||||||||
Net realized gain (loss) on investments | — | (b) | — | (b) | — | (b) | — | ||||||||||||
Total from investment operations | — | (b) | — | (b) | — | (b) | — | (b) | |||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||
From net investment income | — | (b) | — | (b) | — | (b) | — | (b) | |||||||||||
From net realized gains | — | (b) | — | (b) | — | — | |||||||||||||
Total distributions to shareholders | — | (b) | — | (b) | — | (b) | — | (b) | |||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||
Total return (c)(d) | 0.04 | % | 0.04 | % | 0.02 | % | 0.01 | %(e) | |||||||||||
Ratios to Average Net Assets/Supplemental Data: | |||||||||||||||||||
Gross expenses | 0.88 | % | 0.89 | % | 0.94 | % | 0.93 | %(f) | |||||||||||
Net expenses | 0.09 | % | 0.05 | %(g) | 0.18 | %(h) | 0.16 | %(f)(h) | |||||||||||
Waiver/Reimbursement | 0.79 | % | 0.84 | % | 0.76 | % | 0.77 | %(f) | |||||||||||
Net investment income | 0.04 | % | 0.04 | % | 0.02 | %(h) | 0.02 | %(f)(h) | |||||||||||
Net assets, end of period (000s) | $ | 654 | $ | 529 | $ | 201 | $ | 12,028 |
Past performance is no guarantee of future results.
(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:
Year Ended August 31, | |||||||||||||||||||||||
Institutional Capital Shares | 2015 | 2014 | 2013 | 2012 (a) | 2011 | ||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||
Net investment income | — | (b) | — | (b) | — | (b) | — | (b) | — | (b) | |||||||||||||
Net realized gain (loss) on investments | — | (b) | — | (b) | — | (b) | — | — | |||||||||||||||
Total from investment operations | — | (b) | — | (b) | — | (b) | — | (b) | — | (b) | |||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||
From net investment income | — | (b) | — | (b) | — | (b) | — | (b) | — | (b) | |||||||||||||
From net realized gains | — | (b) | — | (b) | — | — | — | ||||||||||||||||
Total distributions to shareholders | — | (b) | — | (b) | — | (b) | — | (b) | — | (b) | |||||||||||||
Increase from Contribution from Advisor | — | — | — | — | — | (b) | |||||||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Total return (c)(d) | 0.04 | % | 0.04 | % | 0.03 | % | 0.01 | % | 0.01 | %(e) | |||||||||||||
Ratios to Average Net Assets/Supplemental Data: | |||||||||||||||||||||||
Gross expenses | 0.28 | % | 0.30 | % | 0.34 | % | 0.33 | % | 0.31 | % | |||||||||||||
Net expenses | 0.08 | % | 0.06 | % | 0.19 | %(f)(g) | 0.16 | %(g) | 0.18 | %(g) | |||||||||||||
Waiver/Reimbursement | 0.20 | % | 0.24 | % | 0.15 | % | 0.17 | % | 0.13 | % | |||||||||||||
Net investment income | 0.04 | % | 0.04 | % | 0.02 | %(g) | 0.01 | %(g) | 0.02 | %(g) | |||||||||||||
Net assets, end of period (000s) | $ | 30,093 | $ | 1,510 | $ | 55 | $ | 58,622 | $ | 50,336 |
Past performance is no guarantee of future results.
(a) After the close of business on September 30, 2011, G-Trust shares were renamed Institutional Capital shares.
(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) The Fund received a capital contribution from the investment advisor which had an impact of less than 0.01% on total return.
(f) 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.
(g) The benefits derived from expense reductions had an impact of less than 0.01%.
See Accompanying Notes to Financial Statements.
15
Financial Highlights – BofA Government Plus Reserves
Selected data for a share outstanding throughout each period is as follows:
Year Ended August 31, | |||||||||||||||||||||||
Institutional Class Shares | 2015 | 2014 | 2013 | 2012 | 2011 | ||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||
Net investment income | — | (a) | — | (a) | — | (a) | — | (a) | — | (a) | |||||||||||||
Net realized gain (loss) on investments | — | (a) | — | (a) | — | (a) | — | — | |||||||||||||||
Total from investment operations | — | (a) | — | (a) | — | (a) | — | (a) | — | (a) | |||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||
From net investment income | — | (a) | — | (a) | — | (a) | — | (a) | — | (a) | |||||||||||||
From net realized gains | — | (a) | — | (a) | — | — | — | ||||||||||||||||
Total distributions to shareholders | — | (a) | — | (a) | — | (a) | — | (a) | — | (a) | |||||||||||||
Increase from Contribution from Advisor | — | — | — | — | — | (a) | |||||||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Total return (b)(c) | 0.04 | % | 0.04 | % | 0.02 | % | 0.01 | % | 0.00 | %(d)(e) | |||||||||||||
Ratios to Average Net Assets/Supplemental Data: | |||||||||||||||||||||||
Gross expenses | 0.32 | % | 0.34 | % | 0.38 | % | 0.37 | % | 0.35 | % | |||||||||||||
Net expenses | 0.07 | %(f) | 0.06 | % | 0.15 | %(g) | 0.16 | %(g) | 0.18 | %(g) | |||||||||||||
Waiver/Reimbursement | 0.25 | % | 0.28 | % | 0.23 | % | 0.21 | % | 0.17 | % | |||||||||||||
Net investment income | 0.04 | % | 0.04 | % | 0.02 | %(g) | — | %(e)(g) | — | %(e)(g) | |||||||||||||
Net assets, end of period (000s) | $ | 36,608 | $ | 35,604 | $ | 22,629 | $ | 16,128 | $ | 75,270 |
Past performance is no guarantee of future results.
(a) Rounds to less than $0.001 per share.
(b) Total return at net asset value assuming all distributions reinvested.
(c) 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.
(d) The Fund received a capital contribution from the investment advisor which had an impact of less than 0.01% on total return.
(e) Rounds to less than 0.01%.
(f) 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.
(g) The benefits derived from expense reductions had an impact of less than 0.01%.
See Accompanying Notes to Financial Statements.
16
Financial Highlights – BofA Government Plus Reserves
Selected data for a share outstanding throughout each period is as follows:
Year Ended August 31, | |||||||||||||||||||
Investor Class Shares | 2015 | 2014 | 2013 | 2012 (a) | |||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||
Income from Investment Operations: | |||||||||||||||||||
Net investment income | — | (b) | — | (b) | — | (b) | — | (b) | |||||||||||
Net realized gain (loss) on investments | — | (b) | — | (b) | — | (b) | — | ||||||||||||
Total from investment operations | — | (b) | — | (b) | — | (b) | — | (b) | |||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||
From net investment income | — | (b) | — | (b) | — | (b) | — | (b) | |||||||||||
From net realized gains | — | (b) | — | (b) | — | — | |||||||||||||
Total distributions to shareholders | — | (b) | — | (b) | — | (b) | — | (b) | |||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||
Total return (c)(d) | 0.04 | % | 0.04 | % | 0.02 | % | 0.01 | %(e) | |||||||||||
Ratios to Average Net Assets/Supplemental Data: | |||||||||||||||||||
Gross expenses | 0.63 | % | 0.65 | % | 0.70 | % | 0.67 | %(f) | |||||||||||
Net expenses | 0.07 | %(g) | 0.06 | % | 0.13 | %(g)(h) | 0.16 | %(f)(h) | |||||||||||
Waiver/Reimbursement | 0.56 | % | 0.59 | % | 0.57 | % | 0.51 | %(f) | |||||||||||
Net investment income | 0.04 | % | 0.04 | % | 0.02 | %(h) | 0.01 | %(f)(h) | |||||||||||
Net assets, end of period (000s) | $ | 234 | $ | 466 | $ | 224 | $ | 134 |
Past performance is no guarantee of future results.
(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 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.
17
Financial Highlights – BofA Government Plus Reserves
Selected data for a share outstanding throughout each period is as follows:
Year Ended August 31, | |||||||||||||||||||
Investor II Class Shares | 2015 | 2014 | 2013 | 2012 (a) | |||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||
Income from Investment Operations: | |||||||||||||||||||
Net investment income | — | (b) | — | (b) | — | (b) | — | (b) | |||||||||||
Net realized gain (loss) on investments | — | (b) | — | (b) | — | (b) | — | ||||||||||||
Total from investment operations | — | (b) | — | (b) | — | (b) | — | (b) | |||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||
From net investment income | — | (b) | — | (b) | — | (b) | — | (b) | |||||||||||
From net realized gains | — | (b) | — | (b) | — | — | |||||||||||||
Total distributions to shareholders | — | (b) | — | (b) | — | (b) | — | (b) | |||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||
Total return (c)(d) | 0.04 | % | 0.04 | % | 0.02 | % | 0.01 | %(e) | |||||||||||
Ratios to Average Net Assets/Supplemental Data: | |||||||||||||||||||
Gross expenses | 0.73 | % | 0.75 | % | 0.80 | % | 0.78 | %(f) | |||||||||||
Net expenses | 0.08 | % | 0.06 | % | 0.14 | %(g) | 0.16 | %(f)(g) | |||||||||||
Waiver/Reimbursement | 0.65 | % | 0.69 | % | 0.66 | % | 0.62 | %(f) | |||||||||||
Net investment income | 0.04 | % | 0.04 | % | 0.02 | %(g) | 0.01 | %(f)(g) | |||||||||||
Net assets, end of period (000s) | $ | 5,066 | $ | 1,788 | $ | 1,354 | $ | 467 |
Past performance is no guarantee of future results.
(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:
Year Ended August 31, | |||||||||||||||||||||||
Liquidity Class Shares | 2015 | 2014 | 2013 | 2012 | 2011 | ||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||
Net investment income | — | (a) | — | (a) | — | (a) | — | (a) | — | ||||||||||||||
Net realized gain (loss) on investments | — | (a) | — | (a) | — | (a) | — | — | |||||||||||||||
Total from investment operations | — | (a) | — | (a) | — | (a) | — | (a) | — | ||||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||
From net investment income | — | (a) | — | (a) | — | (a) | — | (a) | — | ||||||||||||||
From net realized gains | — | (a) | — | (a) | — | — | — | ||||||||||||||||
Total distributions to shareholders | — | (a) | — | (a) | — | (a) | — | (a) | — | ||||||||||||||
Increase from Contribution from Advisor | — | — | — | — | — | (a) | |||||||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Total return (b)(c) | 0.04 | % | 0.04 | % | 0.02 | % | 0.01 | % | 0.00 | %(d) | |||||||||||||
Ratios to Average Net Assets/Supplemental Data: | |||||||||||||||||||||||
Gross expenses | 0.53 | % | 0.55 | % | 0.60 | % | 0.58 | % | 0.56 | % | |||||||||||||
Net expenses | 0.07 | %(e) | 0.06 | % | 0.15 | %(f) | 0.16 | %(f) | 0.19 | %(f) | |||||||||||||
Waiver/Reimbursement | 0.46 | % | 0.49 | % | 0.45 | % | 0.42 | % | 0.37 | % | |||||||||||||
Net investment income | 0.04 | % | 0.04 | % | 0.02 | %(f) | 0.01 | %(f) | — | (f) | |||||||||||||
Net assets, end of period (000s) | $ | 11 | $ | 5,141 | $ | 5,139 | $ | 5,138 | $ | 5,138 |
Past performance is no guarantee of future results.
(a) Rounds to less than $0.001 per share.
(b) Total return at net asset value assuming all distributions reinvested.
(c) 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.
(d) The Fund received a capital contribution from the investment advisor which had an impact of less than 0.01% on total return.
(e) 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.
(f) The benefits derived from expense reductions had an impact of 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:
Year Ended August 31, | |||||||||||||||||||||||
Trust Class Shares | 2015 | 2014 | 2013 | 2012 | 2011 | ||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||
Net investment income | — | (a) | — | (a) | — | (a) | — | (a) | — | ||||||||||||||
Net realized gain (loss) on investments | — | (a) | — | (a) | — | (a) | — | — | |||||||||||||||
Total from investment operations | — | (a) | — | (a) | — | (a) | — | (a) | — | ||||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||
From net investment income | — | (a) | — | (a) | — | (a) | — | (a) | — | ||||||||||||||
From net realized gains | — | (a) | — | (a) | — | — | — | ||||||||||||||||
Total distributions to shareholders | — | (a) | — | (a) | — | (a) | — | (a) | — | ||||||||||||||
Increase from Contribution from Advisor | — | — | — | — | — | (a) | |||||||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Total return (b)(c) | 0.04 | % | 0.04 | % | 0.02 | % | 0.01 | % | 0.00 | %(d) | |||||||||||||
Ratios to Average Net Assets/Supplemental Data: | |||||||||||||||||||||||
Gross expenses | 0.38 | % | 0.40 | % | 0.44 | % | 0.43 | % | 0.41 | % | |||||||||||||
Net expenses | 0.08 | % | 0.06 | % | 0.15 | %(e) | 0.16 | %(e) | 0.19 | %(e) | |||||||||||||
Waiver/Reimbursement | 0.30 | % | 0.34 | % | 0.29 | % | 0.27 | % | 0.22 | % | |||||||||||||
Net investment income | 0.04 | % | 0.04 | % | 0.02 | %(e) | 0.01 | %(e) | — | (e) | |||||||||||||
Net assets, end of period (000s) | $ | 32,432 | $ | 38,864 | $ | 62,033 | $ | 62,270 | $ | 82,047 |
Past performance is no guarantee of future results.
(a) Rounds to less than $0.001 per share.
(b) Total return at net asset value assuming all distributions reinvested.
(c) 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.
(d) The Fund received a capital contribution from the investment advisor which had an impact of less than 0.01% on total return.
(e) 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
August 31, 2015
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.
The Fund is an investment company and accordingly follows the investment company accounting and reporting guidance of the Financial Accounting Standards Board (FASB) Accounting Standard Codification Topic 946 Financial Services—Investment Companies.
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 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). These investments may trade in markets that are not considered to be active, but whose values are supported by observable inputs such as U.S. government obligations and agency securities, investment-grade corporate bonds and state, municipal and provincial obligations. For money market funds operating under Rule 2a-7 of the
21
BofA Government Plus Reserves, August 31, 2015
1940 Act, securities are valued at amortized cost which approximates market value and are considered to be valued using Level 2 inputs.
• 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.
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.
The Financial Accounting Standards Board's ("FASB") Accounting Standards Update ("ASU") No. 2011-11 (amended by ASU No. 2013-01): Disclosures about Offsetting Assets and Liabilities ("netting") on the Statement of Assets and Liabilities applies to instruments that are subject to master netting arrangements or similar agreements. The scope of
the disclosure requirements is limited to derivative instruments, repurchase agreements and reverse repurchase agreements, and securities borrowing and securities lending transactions. This information is intended to enable users of the Fund's financial statements to evaluate the effect or potential effect of netting arrangements on the Fund's financial position.
A Master Repurchase Agreement ("MRA") governs transactions between a Fund and select counterparties. A MRA contains provisions for, among other things, initiation, income payments, events of default and maintenance of securities for repurchase agreements. A MRA also permits offsetting with collateral to create one single net payment in the event of default or similar events, including the bankruptcy or insolvency of a counterparty.
For financial reporting purposes, the Fund does not offset financial assets and financial liabilities that are subject to master netting arrangements or similar agreements on the Statement of Assets and Liabilities.
If the seller defaults, the Fund could suffer a loss to the extent that the proceeds from the sale of the underlying securities and other collateral held by the Fund are less than the repurchase price and the Fund's costs associated with delay and enforcement of the repurchase agreement. In addition, in the event of default or insolvency of the seller, a court could determine that a Fund's interest in the collateral is not enforceable, resulting in additional losses to the Fund.
At August 31, 2015, the Fund's investments in repurchase agreements were subject to enforceable MRAs. The repurchase agreements on a net basis were as follows:
Repurchase Agreements | |||||||
Total Gross amount presented in Statement of Assets and Liabilities | $ | 1,221,509,000 | |||||
Non-cash Collateral offsetting (1) | $ | (1,221,509,000 | ) | ||||
Net Amount (2) | $ | — |
(1) At August 31, 2015, the value of the collateral exceeded the value of the related repurchase agreements.
(2) Net amount represents the net amount due from the counterparty in the event of a default based on the contractual set-off rights under the agreement.
22
BofA Government Plus Reserves, August 31, 2015
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. Expenses directly attributable to a specific class of shares are charged to that share class.
Determination of Class Net Asset Value
All income, expenses (other than class-specific expenses, which are charged to that share class, as shown on the Statement of Operations) and realized 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 based on the following methodologies: income and expenses are allocated to each class based on the settled shares method, while realized gains (losses) are allocated based on the relative net assets of each class.
Federal Income Tax Status
The Fund intends to qualify each year as a "regulated investment company" under Subchapter M of the Internal Revenue Code, as amended, and to distribute substantially all of its tax-exempt or taxable income, if any, for its tax year, and as such will not be subject to federal income taxes. In addition, the Fund intends to distribute in each calendar year substantially all of its net investment income, capital gains and certain other amounts, if any, such that the Fund 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.
For the year ended August 31, 2015, permanent book and tax basis differences resulting primarily from distribution re-designations were identified and reclassified among the components of the Fund's net assets as follows:
Undistributed Net Investment Income | Accumulated Net Realized Gain (Loss) | Paid-In-Capital | |||||||||
$ | 132 | $ | (132 | ) | $ | — |
The tax character of distributions paid during the years ended August 31, 2015 and August 31, 2014 were as follows:
August 31, | |||||||||||
Distributions paid from | 2015 | 2014 | |||||||||
Ordinary Income* | $ | 715,280 | $ | 425,000 |
* For tax purposes, short-term capital gain distributions, if any, are considered ordinary income distributions.
23
BofA Government Plus Reserves, August 31, 2015
As of August 31, 2015, the components of distributable earnings on a tax basis were as follows:
Undistributed Tax-Exempt Income | Undistributed Ordinary Income | Undistributed Long-Term Capital Gains | |||||||||
$ | — | $ | 5,052 | $ | — |
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 ("BofA Corp."), 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 | % |
For the year ended August 31, 2015, the Fund's effective investment advisory fee rate, net of fee waivers, was 0.17% 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 agreement. The Advisor pays State Street a fee for all services received under this agreement.
For the year ended August 31, 2015, the 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.
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, 2015. There is no guarantee that this expense limitation will continue after such date.
24
BofA Government Plus Reserves, August 31, 2015
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 (together, 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 the 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.
Distribution and Shareholder Servicing Fees
BofA Distributors, Inc. (the "Distributor"), an affiliate of the Advisor and an indirect, wholly owned subsidiary of BofA Corp., 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 sales support services. The Distributor is entitled to retain some or all fees payable under the Distribution Plan in certain circumstances, including but not limited to, instances when there is no broker of record or when certain qualification standards have not been met by
the broker of record. In certain instances, payments will continue to be made pursuant to the Distribution Plan with respect to shares held in classes that are closed to new investors and shares held by specific investors who are not eligible to make additional purchases in a particular share class.
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, 2015 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.
25
BofA Government Plus Reserves, August 31, 2015
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 the 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, 2015, so that the Fund's ordinary operating expenses (excluding any acquired fund fees and expenses, 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 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 August 31, 2015, the amounts potentially recoverable pursuant to this arrangement are as follows:
Amount of potential recovery expiring August 31: | Total potential | Amount recovered during the year | |||||||||||||||||
2018 | 2017 | �� | 2016 | recovery | ended 08/31/2015 | ||||||||||||||
$ | 1,400,355 | $ | 991,036 | $ | 547,381 | $ | 2,938,772 | $ | — |
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
26
BofA Government Plus Reserves, August 31, 2015
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%. Pursuant to a September 25, 2015 amendment, an annual administration fee of $25,000 is also accrued and apportioned to each fund participating in the line of credit based on the average net assets of the participating funds. Prior to the September 25, 2015 amendment, an annual administration fee of $10,000 was accrued and apportioned to each participating fund under the same terms.
For the year ended August 31, 2015, 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.
Note 9. Money Market Fund Regulatory Matters
On July 23, 2014, the Securities and Exchange Commission voted to amend Rule 2a-7, which governs money market funds (such as the Fund). The majority of these amendments take effect in 2016. The most significant change is a requirement that institutional (i.e. large volume institutions such as banks, trusts, insurance companies, etc.) prime and
27
BofA Government Plus Reserves, August 31, 2015
institutional municipal money market funds move to a floating net asset value. Retail (i.e. a money market mutual fund that has policies and procedures reasonably designed to limit all beneficial owners of the money market fund to natural persons) prime, municipal, government and treasury money market funds will continue to transact at a stable $1.00 share price. In addition, the boards of trustees of non-government money market funds may impose a temporary liquidity fee of up to 2% of the value of a redemption and/or suspend (or "gate") redemptions temporarily should a money market fund's level of weekly liquid assets fall below 30% of its total assets. At this time, the Fund's management is evaluating the implications of the reforms and their impact on the Fund, including potential effects on the Fund's operations and returns.
28
Report of Independent Registered Public Accounting Firm
To the Trustees of BofA Funds Series Trust and Shareholders of BofA Government Plus Reserves
In our opinion, the accompanying statement of assets and liabilities, including the investment portfolio, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of BofA Government Plus Reserves (the "Fund") (a series of BofA Funds Series Trust) at August 31, 2015, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and the financial highlights for each of the periods indicated, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as "financial statements") are the responsibility of the Fund's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at August 31, 2015 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
Boston, Massachusetts
October 21, 2015
29
Federal Income Tax Information (Unaudited) – BofA Government Plus Reserves
The Fund designates the maximum allowable as qualified interest income for nonresident alien shareholders, as provided in the American Jobs Creation Act of 2004.
The Fund will notify shareholders in January 2016 of amounts for use in preparing 2015 income tax returns.
30
Fund Governance
The Trustees serve terms of indefinite duration. The names, addresses and ages of the Trustees and officers of the Funds in the BofA Funds Series Trust, the year each was first elected or appointed to office, their principal business occupations during at least the last five years, the number of Funds overseen by each Trustee and other directorships they hold are shown below. Each officer listed below serves as an officer of each Fund in the BofA Funds Series Trust.
Independent Trustees
Name, Address, and Year of Birth, Position with Funds, Year First Elected or Appointed to Office | Principal Occupation(s) During Past Five Years, Number of Funds in BofA Funds Series Trust Overseen by Trustee, Other Directorships Held | ||||||
Harrison M. Bains (Born 1943) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Trustee (since 2011) | Retired. Oversees 11 Funds. Mercer Funds (9 funds); BG Medicine, Inc. (life sciences). | ||||||
Paul Glasserman (Born 1962) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Trustee (since 2011) | Jack R. Anderson Professor of Business—Columbia Business School, since 2000 (Senior Vice Dean, 2004-2008; Professor, 1995-2000); Visiting Scholar—Federal Reserve Bank of New York, from 2008 to 2012; Consultant to the U.S. Treasury, 2011-2014; Independent consultant to financial firms since 1995. Oversees 11 Funds. | ||||||
William A. Hawkins (Born 1942) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Trustee (since 2005)1 | Managing Director—Overton Partners (financial consulting), August 2010 to present. Oversees 11 Funds. Columbia Funds (127 funds). | ||||||
R. Glenn Hilliard (Born 1943) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Trustee (since 2005)1 | Chairman and Chief Executive Officer—Hilliard Group LLC (investing and consulting), from 2003 through current; Non-Executive Director & Chairman—CNO Financial Group, Inc. (formerly Conseco, Inc.) (insurance), September 2003-May 2011. Oversees 11 Funds. Columbia Funds (127 funds). | ||||||
William J. Kelly (Born 1960) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Trustee (since 2011) | Chief Executive Officer—Chartered Alternative Investment Analyst Association, January 2014 to present. Oversees 11 Funds. | ||||||
Debra Perry (Born 1951) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Trustee (since 2011) | Retired. Managing Member—Perry Consulting LLC (advisory firm), from 2008 through 2014. Oversees 11 Funds. Korn/Ferry International (recruiting); Sanford C. Bernstein Fund, Inc. (18 funds); Board Member—PartnerRE (reinsurance). |
1 Includes service as trustees of Columbia Funds Series Trust, the predecessor trust.
The Statement of Additional Information includes additional information about the Trustees of the Funds and is available, without charge, upon request by calling 888-331-0904. (Institutional Investors, please call 800-353-0828.)
31
Fund Governance (continued)
Officers
Name, Address, and Year of Birth, Position with Funds, Year First Elected or Appointed to Office | Principal Occupation(s) During Past Five Years | ||||||
Michael J. Pelzar (Born 1968) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 President (since 2010) | President, BofA Global Capital Management Group, LLC since May 2010; Managing Director and Head of Product Management of the Advisor from 2007 to 2010. | ||||||
Kenneth B. Crotty (Born 1961) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Vice President (since 2015) Assistant Treasurer (2014-2015) | Chief Operating Officer, BofA Global Capital Management Group, LLC since August 2013; President KBC Consulting 2012-2013; Global Chief Operating Officer of Mercer Investments and President of Mercer Investments US 2006-2012. | ||||||
Jeffrey R. Coleman (Born 1969) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Senior Vice President, Chief Financial Officer, Chief Accounting Officer (since 2010) and Treasurer (since 2009) | Managing Director of Fund Administration and Transfer Agency Oversight of the Advisor since May 2010; Director of Fund Administration of the Advisor since January 2006. | ||||||
Marina Belaya (Born 1967) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Secretary and Chief Legal Officer (since 2013) | Assistant General Counsel, Director, Bank of America since July 2007. | ||||||
James R. Bordewick (Born 1959) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Senior Vice President and Chief Compliance Officer (since 2010) | Chief Compliance Officer of U.S. Trust, Bank of America Private Wealth Management since 2012; Chief Compliance Officer of the Advisor and Managing Director, Bank of America since May 2010. | ||||||
Barry S. Vallan (Born 1969) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Deputy Treasurer (since 2010) and Controller (since 2006) | Director of Fund Administration of the Advisor since May 2010; Vice President—Fund Treasury of the Advisor since October 2004; Vice President—Fund Administration of the Advisor since May 2002. |
32
Fund Governance (continued)
Officers (continued)
Name, Address, and Year of Birth, Position with Funds, Year First Elected or Appointed to Office | Principal Occupation(s) During Past Five Years | ||||||
Patrick Campbell (Born 1957) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Vice President (since 2015) Assistant Treasurer (2010-2015) | Director of Transfer Agency Oversight, BofA Global Capital Management Group, LLC since May 2010. | ||||||
Rana J. Wright (Born 1978) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Assistant Secretary (since 2014) | Assistant General Counsel and Director, Bank of America, and Chief Legal Officer, BofA Global Capital Management Group, LLC, since June 2014; Partner, Reed Smith LLP, 2012 to 2014; Associate, Reed Smith LLP, 2003 to 2011. | ||||||
Nitin Mehra (Born 1977) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Vice President (since 2015) Assistant Treasurer (2013-2015) | Managing Director and Head of Strategy and Product at BofA Global Capital Management Group, LLC since May 2011; Managing Director of Strategy and Product at BofA Global Capital Management Group, LLC from 2010-2011; Director of Product Strategy and Development of the Advisor from 2008-2010. |
33
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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.
An investment in money market mutual funds is not insured or guaranteed by Bank of America, N.A. or its affiliates, or by the Federal Deposit Insurance Corporation or any other government agency. Although money market mutual funds seek to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in money market mutual funds.
BofA® 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
BofA Global Capital Management
100 Federal Street
Boston, MA 02110
Questions or comments regarding your account or investment in the Funds should be directed to:
Boston Financial Data Services
P.O. Box 8723
Boston, MA 02266-8723
Retail Investors: 888.331.0904
Institutional Investors: 800.353.0828
BofA Government Plus Reserves
Annual Report, August 31, 2015
© 2015 Bank of America Corporation. All rights reserved.
BofA Distributors, Inc.
100 Federal Street, Boston, MA 02110
888.331.0904 (Institutional Investors: 800.353.0828) www.bofacapital.com
AR-GOVP-1015
BofA Funds
Annual Report
August 31, 2015
• 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 | ||||||
Report of Independent Registered Public Accounting Firm | 27 | ||||||
Federal Income Tax Information | 28 | ||||||
Fund Governance | 29 | ||||||
Important Information About This Report | 33 |
The views expressed in this report reflect the current views of the respective parties. These views are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to predict so actual outcomes and results may differ significantly from the views expressed. These views are subject to change at any time based upon economic, market or other conditions and the respective parties disclaim any responsibility to update such views. These views may not be relied on as investment advice and, because investment decisions for a BofA Fund are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any particular BofA Fund. References to specific securities should not be construed as a recommendation or investment advice.
President's Message
To Our Valued Shareholders:
A year ago the consensus within the financial community was that the interest rate environment would soon be more hospitable to money market fund investors as a strengthening U.S. economy finally moved the Federal Reserve ("the Fed") to raise short-term interest rates. That rate hike has yet to materialize, so for liquidity investors, the most important news out of Washington has come not from the Fed, but from the U.S. Securities and Exchange Commission ("SEC"), which adopted sweeping changes to the regulations governing U.S. money market funds.
To take effect in October 2016, the amendments to Rule 2a-7 under the Investment Company Act of 1940 include two important reforms that are prompting investors to reevaluate their liquidity investment strategies:
• Institutional prime and institutional municipal money market funds must "float" their net asset values ("NAVs"), which means the value of the funds' shares would be based on the market value of their underlying securities. Only government funds and funds serving retail investors—defined as "natural persons"—would retain their stable, $1-per-share NAVs.
• The boards of trustees of non-government money market funds may impose a temporary liquidity fee of up to 2% of the value of a redemption or to suspend or "gate" redemptions temporarily should a money market fund's level of weekly liquid assets fall below 30% of its total assets.
These changes are part of a multi-year effort on the part of the SEC to make money market funds more resilient during market crises, when heavy redemption activity can exert strong downward pressure on funds' NAVs.
After extensive analysis, we have concluded that the impact of the rule changes will be less significant than many investors first believed. With regard to floating NAV funds, for example, fund managers still will go to great lengths to maintain the $1-per-share NAV after the floating NAV rule takes effect. If there is any movement around the $1 mark, that variation likely would be very limited under normal market conditions because of the preponderance of short-term, high-quality securities in money market funds. As for liquidity fees and redemption gates, these measures would be a last resort for fund managers because of the reputational damage money market fund companies would incur were they to impose these measures.
Recognizing the importance of money market fund reform to our shareholders, BofA Global Capital Management has launched a series of whitepapers analyzing the potential impact of the rule changes on clients' liquidity-management programs. These papers are available at www.bofacapital.com. Our preparations for the implementation of the reforms are proceeding, and we anticipate no problems meeting the October 2016 compliance deadline.
Shifting back to the macroeconomic environment, the Fed held the benchmark federal funds rate steady in September, but we believe the drop in the U.S. unemployment rate and steady economic growth should allow the central bank to begin increasing the federal funds rate from the current 0% to .25% rate—in the near future. This, in our view, will mark the beginning of a gradual increase in rates that over time should translate into potentially more attractive yields for money market fund investors. We are positioning the BofA Funds to capture the potential benefits of a rising-rate environment.
Given the complexity of modern financial markets and the ever-present threat of unforeseen investment challenges, the managers of the BofA Funds will continue to employ a conservative investment process designed to achieve your most important goals: principal protection, a high degree of liquidity and competitive risk-adjusted yields. We believe our conservative investment posture; our focus on the management of liquidity investments; and the resources available to us as part of one of the world's largest financial institutions position BofA Global Capital Management to help you reach your liquidity objectives.
On behalf of everyone at BofA Global Capital Management, I thank you for the opportunity to have served you over the past year. We appreciate your business, and we look forward to working with you in the months and years ahead.
Sincerely,
Michael Pelzar
President, BofA Global Capital Management
ARQ5HMRY
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:
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 $1,000. Please refer to the Fund's prospectus for additional details.
3/1/15 – 8/31/15 (Unaudited)
Account value at the beginning of the period ($) | 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 | 1,000.10 | 1,024.80 | 0.40 | 0.41 | 0.08 | ||||||||||||||||||||||||
Capital Class Shares | 1,000.00 | 1,000.00 | 1,000.10 | 1,024.80 | 0.40 | 0.41 | 0.08 | ||||||||||||||||||||||||
Daily Class Shares | 1,000.00 | 1,000.00 | 1,000.10 | 1,024.80 | 0.40 | 0.41 | 0.08 | ||||||||||||||||||||||||
Institutional Capital Shares | 1,000.00 | 1,000.00 | 1,000.10 | 1,024.80 | 0.40 | 0.41 | 0.08 | ||||||||||||||||||||||||
Institutional Class Shares | 1,000.00 | 1,000.00 | 1,000.10 | 1,024.80 | 0.40 | 0.41 | 0.08 | ||||||||||||||||||||||||
Investor Class Shares | 1,000.00 | 1,000.00 | 1,000.10 | 1,024.80 | 0.40 | 0.41 | 0.08 | ||||||||||||||||||||||||
Investor II Class Shares | 1,000.00 | 1,000.00 | 1,000.10 | 1,024.80 | 0.40 | 0.41 | 0.08 | ||||||||||||||||||||||||
Liquidity Class Shares | 1,000.00 | 1,000.00 | 1,000.10 | 1,024.80 | 0.40 | 0.41 | 0.08 | ||||||||||||||||||||||||
Trust Class Shares | 1,000.00 | 1,000.00 | 1,000.10 | 1,024.80 | 0.40 | 0.41 | 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
August 31, 2015
Government & Agency Obligations – 102.6%
Par ($) | Value ($) | ||||||||||
U.S. Government Agencies – 90.8% | |||||||||||
Federal Farm Credit Bank | |||||||||||
0.040% 09/08/15 (a) | 95,000,000 | 94,999,261 | |||||||||
0.050% 09/08/15 (a) | 150,000,000 | 149,998,542 | |||||||||
0.055% 09/02/15 (a) | 3,070,000 | 3,069,995 | |||||||||
0.060% 09/21/15 (a) | 50,000,000 | 49,998,333 | |||||||||
0.080% 09/17/15 (a) | 50,000,000 | 49,998,222 | |||||||||
0.080% 09/28/15 (a) | 6,800,000 | 6,799,592 | |||||||||
0.110% 09/18/15 (a) | 10,000,000 | 9,999,481 | |||||||||
0.164% 10/03/16 (09/03/15) (b)(c) | 6,640,000 | 6,637,902 | |||||||||
0.170% 10/22/15 | 1,150,000 | 1,150,077 | |||||||||
0.173% 03/20/17 (09/20/15) (b)(c) | 61,750,000 | 61,743,148 | |||||||||
0.174% 09/01/15 | 88,830,000 | 88,830,000 | |||||||||
0.176% 09/06/16 (09/06/15) (b)(c) | 19,935,000 | 19,933,560 | |||||||||
0.180% 12/04/15 (a) | 50,000,000 | 49,976,500 | |||||||||
0.180% 12/22/15 (a) | 22,000,000 | 21,987,680 | |||||||||
0.180% 01/24/17 (09/24/15) (b)(c) | 15,680,000 | 15,679,005 | |||||||||
0.182% 08/01/16 (10/01/15) (b)(c) | 43,000,000 | 42,998,083 | |||||||||
0.188% 10/20/16 (09/20/15) (b)(c) | 30,000,000 | 29,991,479 | |||||||||
0.189% 03/02/17 (09/02/15) (b)(c) | 30,930,000 | 30,939,542 | |||||||||
0.190% 09/09/15 | 1,550,000 | 1,550,023 | |||||||||
0.190% 10/01/15 | 9,860,000 | 9,860,701 | |||||||||
0.192% 10/08/15 (09/08/15) (b)(c) | 1,392,000 | 1,391,993 | |||||||||
0.194% 09/14/15 | 7,412,000 | 7,412,058 | |||||||||
0.197% 10/01/15 | 2,175,000 | 2,175,019 | |||||||||
0.197% 11/29/16 (09/29/15) (b)(c) | 785,000 | 785,202 | |||||||||
0.200% 12/07/15 | 5,000,000 | 5,000,284 | |||||||||
0.200% 01/13/16 (09/01/15) (b)(c) | 47,745,000 | 47,744,114 | |||||||||
0.201% 02/06/17 (09/06/15) (b)(c) | 46,409,000 | 46,422,234 | |||||||||
0.204% 11/14/16 (09/14/15) (b)(c) | 2,984,000 | 2,984,372 | |||||||||
0.205% 11/19/15 (09/19/15) (b)(c) | 5,575,000 | 5,575,019 | |||||||||
0.205% 02/23/17 (09/23/15) (b)(c) | 8,599,000 | 8,600,043 | |||||||||
0.208% 06/17/16 (09/17/15) (b)(c) | 500,000 | 500,042 | |||||||||
0.209% 10/03/16 (09/03/15) (b)(c) | 16,800,000 | 16,804,263 |
Par ($) | Value ($) | ||||||||||
0.210% 10/22/15 (09/01/15) (b)(c) | 5,900,000 | 5,900,125 | |||||||||
0.210% 01/04/16 (09/01/15) (b)(c) | 805,000 | 804,986 | |||||||||
0.210% 07/13/17 (09/01/15) (b)(c) | 39,125,000 | 39,117,614 | |||||||||
0.211% 10/11/16 (09/11/15) (b)(c) | 6,710,000 | 6,710,948 | |||||||||
0.214% 09/14/16 (09/14/15) (b)(c) | 20,539,000 | 20,544,902 | |||||||||
0.215% 01/19/16 (09/19/15) (b)(c) | 7,905,000 | 7,905,684 | |||||||||
0.217% 03/29/17 (09/29/15) (b)(c) | 12,700,000 | 12,710,994 | |||||||||
0.219% 06/02/16 (09/02/15) (b)(c) | 8,030,000 | 8,032,170 | |||||||||
0.219% 01/03/17 (09/03/15) (b)(c) | 24,065,000 | 24,070,319 | |||||||||
0.219% 08/26/16 (09/26/15) (b)(c) | 1,970,000 | 1,970,496 | |||||||||
0.221% 06/05/17 (09/05/15) (b)(c) | 1,125,000 | 1,125,507 | |||||||||
0.221% 10/11/16 (09/11/15) (b)(c) | 800,000 | 800,095 | |||||||||
0.223% 09/12/16 (09/12/15) (b)(c) | 11,607,000 | 11,611,272 | |||||||||
0.224% 07/14/17 (09/14/15) (b)(c) | 10,000,000 | 10,009,461 | |||||||||
0.225% 09/22/15 | 30,080,000 | 30,081,608 | |||||||||
0.228% 12/28/16 (09/28/15) (b)(c) | 14,945,000 | 14,955,097 | |||||||||
0.229% 10/26/15 (09/26/15) (b)(c) | 3,250,000 | 3,250,204 | |||||||||
0.230% 09/18/15 | 25,000,000 | 25,000,745 | |||||||||
0.230% 10/15/15 | 9,500,000 | 9,501,040 | |||||||||
0.233% 06/20/17 (09/20/15) (b)(c) | 28,085,000 | 28,108,066 | |||||||||
0.234% 02/13/17 (09/13/15) (b)(c) | 4,115,000 | 4,118,276 | |||||||||
0.240% 03/24/17 (09/24/15) (b)(c) | 1,500,000 | 1,500,958 | |||||||||
0.248% 01/17/17 (09/17/15) (b)(c) | 6,515,000 | 6,521,029 | |||||||||
0.248% 04/17/17 (09/17/15) (b)(c) | 30,258,000 | 30,293,209 | |||||||||
0.249% 10/26/15 (09/26/15) (b)(c) | 8,190,000 | 8,190,817 | |||||||||
0.250% 09/10/15 | 7,748,000 | 7,748,256 | |||||||||
0.250% 09/21/15 (09/01/15) (b)(c) | 800,000 | 800,040 |
See Accompanying Notes to Financial Statements.
2
BofA Government Reserves
August 31, 2015
Government & Agency Obligations (continued)
Par ($) | Value ($) | ||||||||||
0.250% 12/21/15 | 36,700,000 | 36,700,804 | |||||||||
0.250% 02/01/16 (09/01/15) (b)(c) | 3,700,000 | 3,699,843 | |||||||||
0.250% 02/24/160 (09/24/15) (b)(c) | 9,703,000 | 9,706,495 | |||||||||
0.253% 02/27/17 (09/27/15) (b)(c) | 16,434,000 | 16,450,460 | |||||||||
0.273% 04/20/16 (09/20/15) (b)(c) | 1,040,000 | 1,040,470 | |||||||||
0.286% 12/06/16 (09/06/15) (b)(c) | 3,090,000 | 3,093,870 | |||||||||
0.330% 12/22/15 | 2,500,000 | 2,500,966 | |||||||||
0.350% 10/29/15 | 3,000,000 | 3,000,985 | |||||||||
0.375% 09/09/15 | 5,000,000 | 5,000,253 | |||||||||
0.400% 09/15/15 | 1,400,000 | 1,400,148 | |||||||||
0.400% 09/25/15 | 5,150,000 | 5,150,981 | |||||||||
0.420% 10/15/15 | 6,720,000 | 6,722,238 | |||||||||
0.430% 11/16/15 | 410,000 | 410,133 | |||||||||
0.440% 12/28/15 | 3,000,000 | 3,002,294 | |||||||||
0.550% 09/16/15 | 15,000,000 | 15,002,603 | |||||||||
1.500% 11/16/15 | 24,319,000 | 24,382,874 | |||||||||
5.150% 10/05/15 | 5,750,000 | 5,776,689 | |||||||||
Federal Home Loan Bank | |||||||||||
0.040% 09/09/15 (a) | 85,951,000 | 85,950,236 | |||||||||
0.040% 09/11/15 (a) | 11,500,000 | 11,499,872 | |||||||||
0.045% 09/01/15 (a) | 21,250,000 | 21,250,000 | |||||||||
0.050% 09/04/15 (a) | 121,040,000 | 121,039,496 | |||||||||
0.055% 09/04/15 (a) | 17,724,000 | 17,723,919 | |||||||||
0.057% 09/04/15 (a) | 85,809,000 | 85,808,592 | |||||||||
0.060% 09/02/15 (a) | 28,786,000 | 28,785,952 | |||||||||
0.060% 09/04/15 (a) | 190,441,000 | 190,440,048 | |||||||||
0.060% 09/09/15 (a) | 69,560,000 | 69,559,073 | |||||||||
0.060% 09/11/15 (a) | 60,249,000 | 60,247,996 | |||||||||
0.060% 09/16/15 (a) | 44,400,000 | 44,398,890 | |||||||||
0.060% 09/25/15 (a) | 6,183,000 | 6,182,753 | |||||||||
0.063% 09/18/15 (a) | 100,000,000 | 99,997,049 | |||||||||
0.063% 09/18/15 (a) | 127,847,000 | 127,843,197 | |||||||||
0.065% 09/04/15 (a) | 88,090,000 | 88,089,523 | |||||||||
0.065% 09/18/15 (a) | 3,735,000 | 3,734,885 | |||||||||
0.066% 09/11/15 (a) | 42,450,000 | 42,449,222 | |||||||||
0.069% 09/16/15 (a) | 148,569,000 | 148,564,729 | |||||||||
0.070% 09/15/15 (a) | 62,491,000 | 62,489,299 | |||||||||
0.070% 09/16/15 (a) | 38,810,000 | 38,808,868 | |||||||||
0.070% 09/23/15 (a) | 170,913,000 | 170,905,689 | |||||||||
0.070% 09/25/15 (a) | 42,605,000 | 42,603,012 | |||||||||
0.070% 09/28/15 (a) | 50,000,000 | 49,997,375 | |||||||||
0.075% 09/17/15 (a) | 34,310,000 | 34,308,856 | |||||||||
0.078% 10/02/15 (a) | 6,097,000 | 6,096,590 | |||||||||
0.080% 09/11/15 (a) | 12,690,000 | 12,689,718 | |||||||||
0.080% 09/23/15 (a) | 5,500,000 | 5,499,731 |
Par ($) | Value ($) | ||||||||||
0.082% 09/23/15 (a) | 84,704,000 | 84,699,755 | |||||||||
0.085% 09/17/15 (a) | 42,352,000 | 42,350,400 | |||||||||
0.085% 09/23/15 (a) | 57,938,000 | 57,934,990 | |||||||||
0.090% 09/02/15 | 9,700,000 | 9,700,004 | |||||||||
0.090% 09/11/15 (a) | 10,610,000 | 10,609,735 | |||||||||
0.090% 09/16/15 (a) | 1,005,000 | 1,004,962 | |||||||||
0.090% 10/02/15 (a) | 19,950,000 | 19,948,454 | |||||||||
0.090% 10/07/15 (a) | 6,097,000 | 6,096,451 | |||||||||
0.090% 10/09/15 (a) | 24,405,000 | 24,402,682 | |||||||||
0.091% 09/11/15 (a) | 20,938,000 | 20,937,471 | |||||||||
0.095% 10/21/15 (a) | 35,487,000 | 35,482,318 | |||||||||
0.099% 10/09/15 (a) | 13,320,000 | 13,318,608 | |||||||||
0.100% 10/02/15 (a) | 22,500,000 | 22,498,062 | |||||||||
0.100% 10/09/15 (a) | 9,600,000 | 9,598,987 | |||||||||
0.100% 10/16/15 (a) | 17,300,000 | 17,297,837 | |||||||||
0.100% 10/20/15 (a) | 4,655,000 | 4,654,366 | |||||||||
0.100% 10/22/15 | 50,000,000 | 49,997,406 | |||||||||
0.100% 10/23/15 (a) | 106,160,000 | 106,144,666 | |||||||||
0.110% 10/23/15 (a) | 82,300,000 | 82,286,923 | |||||||||
0.112% 10/28/15 (a) | 62,365,000 | 62,353,941 | |||||||||
0.113% 10/28/15 (a) | 10,566,000 | 10,564,110 | |||||||||
0.116% 10/07/15 (a) | 85,010,000 | 85,000,139 | |||||||||
0.120% 10/09/15 (a) | 85,071,000 | 85,060,224 | |||||||||
0.120% 10/14/15 (a) | 11,725,000 | 11,723,319 | |||||||||
0.125% 09/02/15 | 6,650,000 | 6,649,999 | |||||||||
0.125% 09/08/15 | 2,185,000 | 2,184,975 | |||||||||
0.125% 09/14/15 | 2,000,000 | 2,000,001 | |||||||||
0.125% 11/25/15 | 330,000 | 329,832 | |||||||||
0.130% 09/11/15 | 12,000,000 | 12,000,105 | |||||||||
0.130% 10/14/15 (a) | 8,465,000 | 8,463,686 | |||||||||
0.140% 10/09/15 (a) | 5,000,000 | 4,999,261 | |||||||||
0.147% 01/09/17 (09/09/15) (b)(c) | 78,910,000 | 78,907,192 | |||||||||
0.150% 09/11/15 (a) | 3,500,000 | 3,499,854 | |||||||||
0.150% 10/02/15 | 14,625,000 | 14,624,842 | |||||||||
0.151% 10/16/15 (a) | 62,804,000 | 62,792,146 | |||||||||
0.155% 10/14/15 (a) | 12,285,000 | 12,282,726 | |||||||||
0.155% 10/16/15 (a) | 63,925,000 | 63,912,615 | |||||||||
0.160% 09/25/15 | 1,335,000 | 1,335,011 | |||||||||
0.160% 10/07/15 (a) | 27,745,000 | 27,740,561 | |||||||||
0.164% 02/14/17 (09/14/15) (b)(c) | 40,585,000 | 40,585,000 | |||||||||
0.170% 09/25/15 | 13,355,000 | 13,355,592 | |||||||||
0.170% 10/14/15 (a) | 23,000,000 | 22,995,330 | |||||||||
0.170% 11/20/15 (a) | 231,348,000 | 231,260,602 | |||||||||
0.171% 09/09/15 (a) | 2,000,000 | 1,999,924 | |||||||||
0.175% 10/14/15 (a) | 2,000,000 | 1,999,582 | |||||||||
0.175% 11/20/15 (a) | 13,765,000 | 13,759,647 | |||||||||
0.180% 10/27/15 | 5,980,000 | 5,980,445 | |||||||||
0.180% 11/09/15 (a) | 1,545,000 | 1,544,467 |
See Accompanying Notes to Financial Statements.
3
BofA Government Reserves
August 31, 2015
Government & Agency Obligations (continued)
Par ($) | Value ($) | ||||||||||
0.180% 11/23/15 (a) | 605,000 | 604,749 | |||||||||
0.180% 12/02/15 (a) | 1,705,000 | 1,704,216 | |||||||||
0.180% 12/03/15 (a) | 4,240,000 | 4,238,028 | |||||||||
0.180% 12/09/15 (a) | 2,120,000 | 2,118,951 | |||||||||
0.189% 11/25/15 (a) | 300,000,000 | 299,866,125 | |||||||||
0.190% 09/01/15 | 113,440,000 | 113,440,000 | |||||||||
0.190% 09/08/15 | 5,015,000 | 5,015,045 | |||||||||
0.190% 09/17/15 | 16,650,000 | 16,650,307 | |||||||||
0.190% 09/29/15 | 58,495,000 | 58,498,026 | |||||||||
0.190% 10/14/15 | 19,525,000 | 19,525,823 | |||||||||
0.200% 09/14/15 | 5,900,000 | 5,900,138 | |||||||||
0.200% 09/15/15 | 5,160,000 | 5,160,113 | |||||||||
0.200% 09/18/15 | 8,140,000 | 8,140,276 | |||||||||
0.200% 09/18/15 | 12,475,000 | 12,475,377 | |||||||||
0.200% 09/25/15 | 140,405,000 | 140,412,675 | |||||||||
0.200% 09/29/15 | 26,185,000 | 26,186,838 | |||||||||
0.200% 10/16/15 | 12,815,000 | 12,816,520 | |||||||||
0.200% 10/27/15 | 47,550,000 | 47,551,972 | |||||||||
0.200% 11/30/15 (a) | 46,967,000 | 46,943,516 | |||||||||
0.200% 01/11/16 (a) | 6,875,000 | 6,869,958 | |||||||||
0.200% 01/15/16 (a) | 23,900,000 | 23,881,942 | |||||||||
0.203% 08/17/17 (09/20/15) (b)(c) | 28,200,000 | 28,200,000 | |||||||||
0.210% 10/13/15 | 22,550,000 | 22,551,222 | |||||||||
0.210% 11/30/15 | 9,000,000 | 8,998,821 | |||||||||
0.220% 10/07/15 (09/01/15) (b)(c) | 8,560,000 | 8,560,740 | |||||||||
0.220% 11/23/15 | 1,800,000 | 1,799,906 | |||||||||
0.220% 01/11/16 (a) | 2,320,000 | 2,318,129 | |||||||||
0.220% 01/15/16 (a) | 2,139,000 | 2,137,222 | |||||||||
0.220% 01/20/16 (a) | 14,980,000 | 14,967,092 | |||||||||
0.225% 12/01/15 (a) | 20,696,000 | 20,684,229 | |||||||||
0.227% 01/20/16 (a) | 1,030,000 | 1,029,084 | |||||||||
0.230% 10/14/15 | 4,030,000 | 4,030,331 | |||||||||
0.230% 10/30/15 | 13,045,000 | 13,046,845 | |||||||||
0.230% 11/02/15 (a) | 13,535,000 | 13,529,639 | |||||||||
0.232% 01/22/16 (a) | 3,900,000 | 3,896,406 | |||||||||
0.232% 01/27/16 (a) | 23,871,000 | 23,848,232 | |||||||||
0.236% 01/29/16 (a) | 13,300,000 | 13,286,922 | |||||||||
0.240% 11/06/15 (a) | 4,100,000 | 4,098,196 | |||||||||
0.240% 11/17/15 (a) | 820,000 | 819,579 | |||||||||
0.240% 01/27/16 (a) | 5,115,000 | 5,109,953 | |||||||||
0.250% 10/15/15 | 4,225,000 | 4,225,543 | |||||||||
0.250% 12/09/15 | 495,000 | 494,969 | |||||||||
0.270% 12/08/15 (a) | 820,000 | 819,397 | |||||||||
0.270% 12/15/15 | 16,415,000 | 16,416,280 | |||||||||
0.450% 09/21/15 | 5,115,000 | 5,116,012 | |||||||||
0.480% 09/18/15 | 1,110,000 | 1,110,184 | |||||||||
0.500% 11/20/15 | 9,755,000 | 9,759,904 | |||||||||
0.850% 11/20/15 | 500,000 | 500,651 |
Par ($) | Value ($) | ||||||||||
1.400% 11/27/15 | 4,085,000 | 4,096,258 | |||||||||
1.625% 09/28/15 | 800,000 | 800,880 | |||||||||
1.750% 09/11/15 | 22,295,000 | 22,304,600 | |||||||||
2.000% 11/03/15 | 1,720,000 | 1,725,292 | |||||||||
2.375% 12/11/15 | 15,000,000 | 15,088,856 | |||||||||
2.875% 09/11/15 | 12,825,000 | 12,834,421 | |||||||||
4.750% 09/11/15 | 5,670,000 | 5,677,102 | |||||||||
5.000% 12/21/15 | 9,715,000 | 9,855,393 | |||||||||
Tennessee Valley Authority | |||||||||||
0.060% 09/02/15 (a) | 65,000,000 | 64,999,892 | |||||||||
0.060% 09/08/15 (a) | 50,000,000 | 49,999,417 | |||||||||
0.062% 09/15/15 (a) | 25,000,000 | 24,999,397 | |||||||||
0.064% 09/08/15 (a) | 90,000,000 | 89,998,880 | |||||||||
0.065% 09/08/15 (a) | 21,283,000 | 21,282,731 | |||||||||
0.065% 09/15/15 (a) | 38,800,000 | 38,799,019 | |||||||||
U.S. Government Agencies Total | 5,993,613,789 | ||||||||||
U.S. Government Obligations – 11.8% | |||||||||||
U.S. Cash Management Bill | |||||||||||
0.065% 09/15/15 (d) | 170,000,000 | 169,995,703 | |||||||||
U.S. Treasury Bill | |||||||||||
0.040% 09/17/15 (d) | 48,905,000 | 48,904,131 | |||||||||
0.040% 09/24/15 (d) | 85,955,000 | 85,952,803 | |||||||||
0.050% 09/03/15 (d) | 127,770,000 | 127,769,645 | |||||||||
0.050% 09/10/15 (d) | 85,072,000 | 85,070,937 | |||||||||
U.S. Treasury Note | |||||||||||
0.250% 09/15/15 | 256,200,000 | 256,218,713 | |||||||||
U.S. Government Obligations Total | 773,911,932 | ||||||||||
Total Government & Agency Obligations (cost of $6,767,525,721) | 6,767,525,721 | ||||||||||
Total Investments – 102.6% (cost of $6,767,525,721) (e) | 6,767,525,721 | ||||||||||
Other Assets & Liabilities, Net – (2.6)% | (168,600,892 | ) | |||||||||
Net Assets – 100.0% | 6,598,924,829 |
Notes to Investment Portfolio:
Portfolio holdings are subject to change periodically and may not be representative of current holdings.
(a) The rate shown represents the discount rate at the date of purchase.
(b) The interest rate shown on floating rate or variable rate securities reflects the rate at August 31, 2015.
(c) Parenthetical date represents the effective maturity date for the security which may represent the demand date for puttable or callable securities or the prerefunded date for certain securities where applicable.
(d) The rate shown represents the annualized yield at the date of purchase.
(e) Cost for federal income tax purposes is $6,767,525,721.
See Accompanying Notes to Financial Statements.
4
BofA Government Reserves
August 31, 2015
The following table summarizes the inputs used, as of August 31, 2015, 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 | $ | — | $ | 6,767,525,721 | $ | — | $ | 6,767,525,721 | |||||||||||
Total Investments | $ | — | $ | 6,767,525,721 | $ | — | $ | 6,767,525,721 |
The Fund's assets are assigned to the Level 2 input category which represents short-term obligations which are valued using amortized cost, an income approach which converts future cash flows to a present value based upon the discount or premium at purchase.
For the year ended August 31, 2015, all of the securities held in the Portfolio were Level 2 and there were no transfers to report.
For more information on valuation inputs, please refer to the Security Valuation section in the accompanying Notes to Financial Statements.
At August 31, 2015, the asset allocation of the Fund is as follows:
Asset Allocation | % of Net Assets | ||||||
U.S. Government Agencies | 90.8 | ||||||
U.S. Government Obligations | 11.8 | ||||||
102.6 | |||||||
Other Assets & Liabilities, Net | (2.6 | ) | |||||
100.0 |
See Accompanying Notes to Financial Statements.
5
Statement of Assets and Liabilities – BofA Government Reserves
August 31, 2015
($) | |||||||||||
Assets | Investments, at amortized cost approximating value | 6,767,525,721 | |||||||||
Cash | 337 | ||||||||||
Receivable for: | |||||||||||
Fund shares sold | 2,400 | ||||||||||
Interest | 1,997,946 | ||||||||||
Expense reimbursement due from investment advisor | 6,062 | ||||||||||
Trustees' deferred compensation plan | 8,926 | ||||||||||
Prepaid expenses | 42,793 | ||||||||||
Total Assets | 6,769,584,185 | ||||||||||
Liabilities | Payable for: | ||||||||||
Investments purchased | 169,995,703 | ||||||||||
Fund shares repurchased | 15,757 | ||||||||||
Distributions | 39,655 | ||||||||||
Investment advisory fee | 204,400 | ||||||||||
Administration fee | 227,009 | ||||||||||
Pricing and bookkeeping fees | 17,113 | ||||||||||
Transfer agent fee | 12,238 | ||||||||||
Trustees' fees | 6,108 | ||||||||||
Custody fee | 14,657 | ||||||||||
Chief Compliance Officer expenses | 3,060 | ||||||||||
Trustees' deferred compensation plan | 8,926 | ||||||||||
Other liabilities | 114,730 | ||||||||||
Total Liabilities | 170,659,356 | ||||||||||
Net Assets | 6,598,924,829 | ||||||||||
Net Assets Consist of | Paid-in capital | 6,598,925,939 | |||||||||
Overdistributed net investment income | (28,000 | ) | |||||||||
Accumulated net realized gain | 26,890 | ||||||||||
Net Assets | 6,598,924,829 |
See Accompanying Notes to Financial Statements.
6
Statement of Assets and Liabilities (continued) – BofA Government Reserves
August 31, 2015
Adviser Class Shares | Net assets | $ | 343,377,124 | ||||||||
Shares outstanding | 343,376,845 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Capital Class Shares | Net assets | $ | 4,301,070,042 | ||||||||
Shares outstanding | 4,301,063,943 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Daily Class Shares | Net assets | $ | 77,471,794 | ||||||||
Shares outstanding | 77,471,732 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Institutional Capital Shares | Net assets | $ | 25,441,985 | ||||||||
Shares outstanding | 25,441,976 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Institutional Class Shares | Net assets | $ | 121,970,596 | ||||||||
Shares outstanding | 121,970,426 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Investor Class Shares | Net assets | $ | 3,234,060 | ||||||||
Shares outstanding | 3,234,056 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Investor II Class Shares | Net assets | $ | 1,110,741 | ||||||||
Shares outstanding | 1,110,741 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Liquidity Class Shares | Net assets | $ | 45,074,127 | ||||||||
Shares outstanding | 45,074,077 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Trust Class Shares | Net assets | $ | 1,680,174,360 | ||||||||
Shares outstanding | 1,680,172,310 | ||||||||||
Net asset value per share | $ | 1.00 |
See Accompanying Notes to Financial Statements.
7
Statement of Operations – BofA Government Reserves
For the Year Ended August 31, 2015
($) | |||||||||||
Investment Income | Interest | 5,598,756 | |||||||||
Expenses | Investment advisory fee | 9,317,970 | |||||||||
Administration fee | 6,071,980 | ||||||||||
Distribution fee: | |||||||||||
Daily Class Shares | 332,309 | ||||||||||
Investor Class Shares | 1,874 | ||||||||||
Investor II Class Shares | 1,359 | ||||||||||
Service fee: | |||||||||||
Adviser Class Shares | 1,198,397 | ||||||||||
Daily Class Shares | 237,364 | ||||||||||
Investor Class Shares | 4,684 | ||||||||||
Investor II Class Shares | 3,398 | ||||||||||
Liquidity Class Shares | 273,743 | ||||||||||
Shareholder administration fee: | |||||||||||
Institutional Class Shares | 52,754 | ||||||||||
Investor II Class Shares | 1,359 | ||||||||||
Trust Class Shares | 1,722,829 | ||||||||||
Transfer agent fee | 119,934 | ||||||||||
Pricing and bookkeeping fees | 173,172 | ||||||||||
Trustees' fees | 67,973 | ||||||||||
Custody fee | 88,095 | ||||||||||
Chief Compliance Officer expenses | 17,234 | ||||||||||
Other expenses | 574,440 | ||||||||||
Total Expenses | 20,260,868 | ||||||||||
Fees waived or expenses reimbursed by investment advisor and/or administrator | (11,453,976 | ) | |||||||||
Fees waived by distributor: | |||||||||||
Adviser Class Shares | (1,197,446 | ) | |||||||||
Daily Class Shares | (569,542 | ) | |||||||||
Institutional Class Shares | (52,824 | ) | |||||||||
Investor Class Shares | (6,561 | ) | |||||||||
Investor II Class Shares | (6,115 | ) | |||||||||
Liquidity Class Shares | (273,847 | ) | |||||||||
Trust Class Shares | (1,723,058 | ) | |||||||||
Net Expenses | 4,977,499 | ||||||||||
Net Investment Income | 621,257 | ||||||||||
Net realized gain on investments | 26,890 | ||||||||||
Net Increase Resulting from Operations | 648,147 |
See Accompanying Notes to Financial Statements.
8
Statement of Changes in Net Assets — BofA Government Reserves
Year Ended August 31, | |||||||||||||||
Increase (Decrease) in Net Assets | 2015 ($) | 2014 ($) | |||||||||||||
Operations | Net investment income | 621,257 | 597,021 | ||||||||||||
Net realized gain on investments | 26,890 | 44,310 | |||||||||||||
Net increase resulting from operations | 648,147 | 641,331 | |||||||||||||
Distributions to Shareholders | From net investment income: | ||||||||||||||
Adviser Class Shares | (47,936 | ) | (46,548 | ) | |||||||||||
Capital Class Shares | (365,013 | ) | (305,405 | ) | |||||||||||
Daily Class Shares | (9,495 | ) | (18,723 | ) | |||||||||||
Institutional Capital Shares | (2,048 | ) | (28,498 | ) | |||||||||||
Institutional Class Shares | (13,190 | ) | (7,697 | ) | |||||||||||
Investor Class Shares | (187 | ) | (351 | ) | |||||||||||
Investor II Class Shares | (136 | ) | (163 | ) | |||||||||||
Liquidity Class Shares | (10,952 | ) | (12,092 | ) | |||||||||||
Trust Class Shares | (172,304 | ) | (197,260 | ) | |||||||||||
Total distributions to shareholders | (621,261 | ) | (616,737 | ) | |||||||||||
Net Capital Stock Transactions | 997,771,701 | (516,236,938 | ) | ||||||||||||
Contribution from advisor (See Note 3) | 525,000 | — | |||||||||||||
Total increase (decrease) in net assets | 998,323,587 | (516,212,344 | ) | ||||||||||||
Net Assets | Beginning of period | 5,600,601,242 | 6,116,813,586 | ||||||||||||
End of period | 6,598,924,829 | 5,600,601,242 | |||||||||||||
Overdistributed net investment income at end of period | (28,000 | ) | (27,996 | ) |
See Accompanying Notes to Financial Statements.
9
Statement of Changes in Net Assets (continued) – BofA Government Reserves
Capital Stock Activity | |||||||||||||||||||
Year Ended August 31, | |||||||||||||||||||
2015 | 2014 | ||||||||||||||||||
Shares | Dollars ($) | Shares | Dollars ($) | ||||||||||||||||
Adviser Class Shares | |||||||||||||||||||
Subscriptions | 2,865,969,645 | 2,865,969,645 | 2,918,361,932 | 2,918,361,932 | |||||||||||||||
Distributions reinvested | 3,007 | 3,007 | 3,728 | 3,728 | |||||||||||||||
Redemptions | (2,983,037,837 | ) | (2,983,037,837 | ) | (2,875,533,504 | ) | (2,875,533,504 | ) | |||||||||||
Net increase (decrease) | (117,065,185 | ) | (117,065,185 | ) | 42,832,156 | 42,832,156 | |||||||||||||
Capital Class Shares | |||||||||||||||||||
Subscriptions | 18,000,192,222 | 18,000,192,222 | 9,680,252,071 | 9,680,252,071 | |||||||||||||||
Distributions reinvested | 182,018 | 182,018 | 189,010 | 189,010 | |||||||||||||||
Redemptions | (16,608,971,866 | ) | (16,608,971,866 | ) | (10,416,922,734 | ) | (10,416,922,734 | ) | |||||||||||
Net increase (decrease) | 1,391,402,374 | 1,391,402,374 | (736,481,653 | ) | (736,481,653 | ) | |||||||||||||
Daily Class Shares | |||||||||||||||||||
Subscriptions | 523,395,603 | 523,395,603 | 423,633,023 | 423,633,023 | |||||||||||||||
Distributions reinvested | — | — | 2 | 2 | |||||||||||||||
Redemptions | (659,861,024 | ) | (659,861,024 | ) | (272,426,198 | ) | (272,426,198 | ) | |||||||||||
Net increase (decrease) | (136,465,421 | ) | (136,465,421 | ) | 151,206,827 | 151,206,827 | |||||||||||||
Institutional Capital Shares | |||||||||||||||||||
Subscriptions | 45,130,507 | 45,130,507 | 1,050,813,998 | 1,050,813,998 | |||||||||||||||
Distributions reinvested | 1 | 1 | 23,673 | 23,673 | |||||||||||||||
Redemptions | (36,909,646 | ) | (36,909,646 | ) | (1,033,685,072 | ) | (1,033,685,072 | ) | |||||||||||
Net increase | 8,220,862 | 8,220,862 | 17,152,599 | 17,152,599 | |||||||||||||||
Institutional Class Shares | |||||||||||||||||||
Subscriptions | 549,738,323 | 549,738,323 | 426,395,943 | 426,395,943 | |||||||||||||||
Distributions reinvested | 13,045 | 13,045 | 7,480 | 7,480 | |||||||||||||||
Redemptions | (520,426,775 | ) | (520,426,775 | ) | (379,742,760 | ) | (379,742,760 | ) | |||||||||||
Net increase | 29,324,593 | 29,324,593 | 46,660,663 | 46,660,663 | |||||||||||||||
Investor Class Shares | |||||||||||||||||||
Subscriptions | 28,910,455 | 28,910,455 | 26,061,787 | 26,061,787 | |||||||||||||||
Distributions reinvested | 60 | 60 | 26 | 26 | |||||||||||||||
Redemptions | (27,332,211 | ) | (27,332,211 | ) | (28,616,292 | ) | (28,616,292 | ) | |||||||||||
Net increase (decrease) | 1,578,304 | 1,578,304 | (2,554,479 | ) | (2,554,479 | ) | |||||||||||||
Investor II Class Shares | |||||||||||||||||||
Subscriptions | 161,595 | 161,595 | 1,695,742 | 1,695,742 | |||||||||||||||
Distributions reinvested | 80 | 80 | 109 | 109 | |||||||||||||||
Redemptions | (865,240 | ) | (865,240 | ) | (1,287,893 | ) | (1,287,893 | ) | |||||||||||
Net increase (decrease) | (703,565 | ) | (703,565 | ) | 407,958 | 407,958 | |||||||||||||
Liquidity Class Shares | |||||||||||||||||||
Subscriptions | 368,522,876 | 368,522,876 | 833,068,409 | 833,068,409 | |||||||||||||||
Distributions reinvested | 10,575 | 10,575 | 12,071 | 12,071 | |||||||||||||||
Redemptions | (493,874,435 | ) | (493,874,435 | ) | (802,266,319 | ) | (802,266,319 | ) | |||||||||||
Net increase (decrease) | (125,340,984 | ) | (125,340,984 | ) | 30,814,161 | 30,814,161 | |||||||||||||
Trust Class Shares | |||||||||||||||||||
Subscriptions | 5,096,829,041 | 5,096,829,041 | 3,561,602,601 | 3,561,602,601 | |||||||||||||||
Distributions reinvested | 264 | 264 | 336 | 336 | |||||||||||||||
Redemptions | (5,150,008,582 | ) | (5,150,008,582 | ) | (3,627,878,107 | ) | (3,627,878,107 | ) | |||||||||||
Net decrease | (53,179,277 | ) | (53,179,277 | ) | (66,275,170 | ) | (66,275,170 | ) |
See Accompanying Notes to Financial Statements.
10
Financial Highlights — BofA Government Reserves
Selected data for a share outstanding throughout each period is as follows:
Year Ended August 31, | |||||||||||||||||||||||
Adviser Class Shares | 2015 | 2014 | 2013 | 2012 | 2011 | ||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||
Net investment income | — | (a) | — | (a) | — | (a) | — | (a) | — | (a) | |||||||||||||
Net realized gain (loss) on investments | — | (a) | — | (a) | — | (a) | — | — | |||||||||||||||
Total from investment operations | — | (a) | — | (a) | — | (a) | — | (a) | — | (a) | |||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||
From net investment income | — | (a) | — | (a) | — | (a) | — | (a) | — | (a) | |||||||||||||
Increase from Contribution from Advisor | — | (a) | — | — | — | — | |||||||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Total return (b)(c) | 0.01 | %(d) | 0.01 | % | 0.01 | % | 0.00 | %(e) | 0.00 | %(e) | |||||||||||||
Ratios to Average Net Assets/Supplemental Data: | |||||||||||||||||||||||
Gross expenses | 0.51 | % | 0.52 | % | 0.52 | % | 0.52 | % | 0.51 | % | |||||||||||||
Net expenses | 0.08 | % | 0.08 | % | 0.11 | %(f) | 0.11 | %(f) | 0.16 | %(f) | |||||||||||||
Waiver/Reimbursement | 0.43 | % | 0.44 | % | 0.41 | % | 0.41 | % | 0.35 | % | |||||||||||||
Net investment income | 0.01 | % | 0.01 | % | 0.01 | %(f) | — | %(e)(f) | — | %(e)(f) | |||||||||||||
Net assets, end of period (000s) | $ | 343,377 | $ | 460,390 | $ | 417,569 | $ | 321,056 | $ | 393,326 |
Past performance is no guarantee of future results.
(a) Rounds to less than $0.001 per share.
(b) Total return at net asset value assuming all distributions reinvested.
(c) 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.
(d) The Fund received a capital contribution from the investment advisor which had an impact of less than 0.01% on total return.
(e) Rounds to less than 0.01%.
(f) The benefits derived from expense reductions had an impact of less than 0.01%.
See Accompanying Notes to Financial Statements.
11
Financial Highlights — BofA Government Reserves
Selected data for a share outstanding throughout each period is as follows:
Year Ended August 31, | |||||||||||||||||||||||
Capital Class Shares | 2015 | 2014 | 2013 | 2012(a) | 2011 | ||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||
Net investment income | — | (b) | — | (b) | — | (b) | — | (b) | — | (b) | |||||||||||||
Net realized gain (loss) on investments | — | (b) | — | (b) | — | (b) | — | — | |||||||||||||||
Total from investment operations | — | (b) | — | (b) | — | (b) | — | (b) | — | (b) | |||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||
From net investment income | — | (b) | — | (b) | — | (b) | — | (b) | — | (b) | |||||||||||||
Increase from Contribution from Advisor | — | (b) | — | — | — | — | |||||||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Total return (c)(d) | 0.01 | %(e) | 0.01 | % | 0.01 | % | 0.00 | %(f) | 0.00 | %(f) | |||||||||||||
Ratios to Average Net Assets/Supplemental Data: | |||||||||||||||||||||||
Gross expenses | 0.26 | % | 0.27 | % | 0.27 | % | 0.27 | % | 0.26 | % | |||||||||||||
Net expenses | 0.08 | % | 0.08 | % | 0.11 | %(g) | 0.11 | %(g) | 0.15 | %(g) | |||||||||||||
Waiver/Reimbursement | 0.18 | % | 0.19 | % | 0.16 | % | 0.16 | % | 0.11 | % | |||||||||||||
Net investment income | 0.01 | % | 0.01 | % | 0.01 | %(g) | — | %(f)(g) | — | %(f)(g) | |||||||||||||
Net assets, end of period (000s) | $ | 4,301,070 | $ | 2,909,385 | $ | 3,645,814 | $ | 3,784,266 | $ | 3,502,524 |
Past performance is no guarantee of future results.
(a) On October 1, 2011, Retail A shares were converted into Capital Class shares.
(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) The Fund received a capital contribution from the investment advisor which had an impact of less than 0.01% on total return.
(f) Rounds to less than 0.01%.
(g) The benefits derived from expense reductions had an impact of less than 0.01%.
See Accompanying Notes to Financial Statements.
12
Financial Highlights — BofA Government Reserves
Selected data for a share outstanding throughout each period is as follows:
Year Ended August 31, | |||||||||||||||||||||||
Daily Class Shares | 2015 | 2014 | 2013 | 2012 | 2011 | ||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||
Net investment income | — | (a) | — | (a) | — | (a) | — | (a) | — | (a) | |||||||||||||
Net realized gain (loss) on investments | — | (a) | — | (a) | — | (a) | — | — | |||||||||||||||
Total from investment operations | — | (a) | — | (a) | — | (a) | — | (a) | — | (a) | |||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||
From net investment income | — | (a) | — | (a) | — | (a) | — | (a) | — | (a) | |||||||||||||
Increase from Contribution from Advisor | — | (a) | — | — | — | — | |||||||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Total return (b)(c) | 0.01 | %(d) | 0.01 | % | 0.01 | % | 0.00 | %(e) | 0.00 | %(e) | |||||||||||||
Ratios to Average Net Assets/Supplemental Data: | |||||||||||||||||||||||
Gross expenses | 0.86 | % | 0.87 | % | 0.86 | % | 0.87 | % | 0.86 | % | |||||||||||||
Net expenses | 0.08 | % | 0.08 | % | 0.11 | %(f) | 0.11 | %(f) | 0.16 | %(f) | |||||||||||||
Waiver/Reimbursement | 0.78 | % | 0.79 | % | 0.75 | % | 0.76 | % | 0.70 | % | |||||||||||||
Net investment income | 0.01 | % | 0.01 | % | 0.01 | %(f) | — | %(e)(f) | — | %(e)(f) | |||||||||||||
Net assets, end of period (000s) | $ | 77,472 | $ | 213,917 | $ | 62,724 | $ | 75,176 | $ | 106,178 |
Past performance is no guarantee of future results.
(a) Rounds to less than $0.001 per share.
(b) Total return at net asset value assuming all distributions reinvested.
(c) 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.
(d) The Fund received a capital contribution from the investment advisor which had an impact of less than 0.01% on total return.
(e) Rounds to less than 0.01%.
(f) The benefits derived from expense reductions had an impact of less than 0.01%.
See Accompanying Notes to Financial Statements.
13
Financial Highlights — BofA Government Reserves
Selected data for a share outstanding throughout each period is as follows:
Year Ended August 31, | |||||||||||||||||||||||
Institutional Capital Shares | 2015 | 2014 | 2013 | 2012(a) | 2011 | ||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||
Net investment income | — | (b) | — | (b) | — | (b) | — | (b) | — | (b) | |||||||||||||
Net realized gain (loss) on investments | — | (b) | — | (b) | — | (b) | — | — | |||||||||||||||
Total from investment operations | — | (b) | — | (b) | — | (b) | — | (b) | — | (b) | |||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||
From net investment income | — | (b) | — | (b) | — | (b) | — | (b) | — | (b) | |||||||||||||
Increase from Contribution from Advisor | — | (b) | — | — | — | — | |||||||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Total return (c)(d) | 0.01 | %(e) | 0.01 | % | 0.01 | % | 0.00 | %(f) | 0.00 | %(f) | |||||||||||||
Ratios to Average Net Assets/Supplemental Data: | |||||||||||||||||||||||
Gross expenses | 0.26 | % | 0.27 | % | 0.27 | % | 0.26 | % | 0.26 | % | |||||||||||||
Net expenses | 0.08 | % | 0.08 | % | 0.14 | %(g)(h) | 0.11 | %(g) | 0.16 | %(g) | |||||||||||||
Waiver/Reimbursement | 0.18 | % | 0.19 | % | 0.13 | % | 0.15 | % | 0.10 | % | |||||||||||||
Net investment income | 0.01 | % | 0.01 | % | 0.01 | %(g) | 0.01 | %(g) | — | %(f)(g) | |||||||||||||
Net assets, end of period (000s) | $ | 25,442 | $ | 17,219 | $ | 69 | $ | 75,480 | $ | 36,981 |
Past performance is no guarantee of future results.
(a) After the close of business on September 30, 2011, G-Trust shares were renamed Institutional Capital shares.
(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) The Fund received a capital contribution from the investment advisor which had an impact of less than 0.01% on total return.
(f) Rounds to less than 0.01%.
(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.
14
Financial Highlights — BofA Government Reserves
Selected data for a share outstanding throughout each period is as follows:
Year Ended August 31, | |||||||||||||||||||||||
Institutional Class Shares | 2015 | 2014 | 2013 | 2012 | 2011 | ||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||
Net investment income | — | (a) | — | (a) | — | (a) | — | (a) | — | (a) | |||||||||||||
Net realized gain (loss) on investments | — | (a) | — | (a) | — | (a) | — | — | |||||||||||||||
Total from investment operations | — | (a) | — | (a) | — | (a) | — | (a) | — | (a) | |||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||
From net investment income | — | (a) | — | (a) | — | (a) | — | (a) | — | (a) | |||||||||||||
Increase from Contribution from Advisor | — | (a) | — | — | — | — | |||||||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Total return (b)(c) | 0.01 | %(d) | 0.01 | % | 0.01 | % | 0.00 | %(e) | 0.00 | %(e) | |||||||||||||
Ratios to Average Net Assets/Supplemental Data: | |||||||||||||||||||||||
Gross expenses | 0.30 | % | 0.31 | % | 0.30 | % | 0.31 | % | 0.30 | % | |||||||||||||
Net expenses | 0.08 | % | 0.08 | % | 0.11 | %(f) | 0.11 | %(f) | 0.16 | %(f) | |||||||||||||
Waiver/Reimbursement | 0.22 | % | 0.23 | % | 0.19 | % | 0.20 | % | 0.14 | % | |||||||||||||
Net investment income | 0.01 | % | 0.01 | % | 0.01 | %(f) | — | %(e)(f) | — | %(e)(f) | |||||||||||||
Net assets, end of period (000s) | $ | 121,971 | $ | 92,637 | $ | 45,979 | $ | 213,568 | $ | 527,276 |
Past performance is no guarantee of future results.
(a) Rounds to less than $0.001 per share.
(b) Total return at net asset value assuming all distributions reinvested.
(c) 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.
(d) The Fund received a capital contribution from the investment advisor which had an impact of less than 0.01% on total return.
(e) Rounds to less than 0.01%.
(f) The benefits derived from expense reductions had an impact of less than 0.01%.
See Accompanying Notes to Financial Statements.
15
Financial Highlights — BofA Government Reserves
Selected data for a share outstanding throughout each period is as follows:
Year Ended August 31, | |||||||||||||||||||||||
Investor Class Shares | 2015 | 2014 | 2013 | 2012 | 2011 | ||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||
Net investment income | — | (a) | — | (a) | — | (a) | — | (a) | — | (a) | |||||||||||||
Net realized gain (loss) on investments | — | (a) | — | (a) | — | (a) | — | — | |||||||||||||||
Total from investment operations | — | (a) | — | (a) | — | (a) | — | (a) | — | (a) | |||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||
From net investment income | — | (a) | — | (a) | — | (a) | — | (a) | — | (a) | |||||||||||||
Increase from Contribution from Advisor | — | (a) | — | — | — | — | |||||||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Total return (b)(c) | 0.01 | %(d) | 0.01 | % | 0.01 | % | 0.00 | %(e) | 0.00 | %(e) | |||||||||||||
Ratios to Average Net Assets/Supplemental Data: | |||||||||||||||||||||||
Gross expenses | 0.61 | % | 0.62 | % | 0.62 | % | 0.62 | % | 0.61 | % | |||||||||||||
Net expenses | 0.08 | % | 0.08 | % | 0.11 | %(f) | 0.11 | %(f) | 0.16 | %(f) | |||||||||||||
Waiver/Reimbursement | 0.53 | % | 0.54 | % | 0.51 | % | 0.51 | % | 0.45 | % | |||||||||||||
Net investment income | 0.01 | % | 0.01 | % | 0.01 | %(f) | — | %(e)(f) | — | %(e)(f) | |||||||||||||
Net assets, end of period (000s) | $ | 3,234 | $ | 1,656 | $ | 4,210 | $ | 4,557 | $ | 7,866 |
Past performance is no guarantee of future results.
(a) Rounds to less than $0.001 per share.
(b) Total return at net asset value assuming all distributions reinvested.
(c) 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.
(d) The Fund received a capital contribution from the investment advisor which had an impact of less than 0.01% on total return.
(e) Rounds to less than 0.01%.
(f) 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:
Year Ended August 31, | |||||||||||||||||||||||
Investor II Class Shares | 2015 | 2014 | 2013 | 2012(a) | 2011 | ||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||
Net investment income | — | (b) | — | (b) | — | (b) | — | (b) | — | (b) | |||||||||||||
Net realized gain (loss) on investments | — | (b) | — | (b) | — | (b) | — | — | |||||||||||||||
Total from investment operations | — | (b) | — | (b) | — | (b) | — | (b) | — | (b) | |||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||
From net investment income | — | (b) | — | (b) | — | (b) | — | (b) | — | (b) | |||||||||||||
Increase from Contribution from Advisor | — | (b) | — | — | — | — | |||||||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Total return (c)(d) | 0.01 | %(e) | 0.01 | % | 0.01 | % | 0.00 | %(f) | 0.00 | %(f) | |||||||||||||
Ratios to Average Net Assets/Supplemental Data: | |||||||||||||||||||||||
Gross expenses | 0.71 | % | 0.72 | % | 0.72 | % | 0.72 | % | 0.71 | % | |||||||||||||
Net expenses | 0.08 | % | 0.08 | % | 0.11 | %(g) | 0.11 | %(g) | 0.15 | %(g) | |||||||||||||
Waiver/Reimbursement | 0.63 | % | 0.64 | % | 0.61 | % | 0.61 | % | 0.56 | % | |||||||||||||
Net investment income | 0.01 | % | 0.01 | % | 0.01 | %(g) | — | %(f)(g) | — | %(f)(g) | |||||||||||||
Net assets, end of period (000s) | $ | 1,111 | $ | 1,814 | $ | 1,406 | $ | 1,729 | $ | 1,432 |
Past performance is no guarantee of future results.
(a) After the close of business on September 30, 2011, Class A Shares were renamed Investor II Class Shares.
(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) The Fund received a capital contribution from the investment advisor which had an impact of less than 0.01% on total return.
(f) Rounds to less than 0.01%.
(g) The benefits derived from expense reductions had an impact of less than 0.01%.
See Accompanying Notes to Financial Statements.
17
Financial Highlights — BofA Government Reserves
Selected data for a share outstanding throughout each period is as follows:
Year Ended August 31, | |||||||||||||||||||||||
Liquidity Class Shares | 2015 | 2014 | 2013 | 2012 | 2011 | ||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||
Net investment income | — | (a) | — | (a) | — | (a) | — | (a) | — | (a) | |||||||||||||
Net realized gain (loss) on investments | — | (a) | — | (a) | — | (a) | — | — | |||||||||||||||
Total from investment operations | — | (a) | — | (a) | — | (a) | — | (a) | — | (a) | |||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||
From net investment income | — | (a) | — | (a) | — | (a) | — | (a) | — | (a) | |||||||||||||
Increase from Contribution from Advisor | — | (a) | — | — | — | — | |||||||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Total return (b)(c) | 0.01 | %(d) | 0.01 | % | 0.01 | % | 0.00 | %(e) | 0.00 | %(e) | |||||||||||||
Ratios to Average Net Assets/Supplemental Data: | |||||||||||||||||||||||
Gross expenses | 0.51 | % | 0.52 | % | 0.52 | % | 0.52 | % | 0.51 | % | |||||||||||||
Net expenses | 0.08 | % | 0.08 | % | 0.11 | %(f) | 0.11 | %(f) | 0.15 | %(f) | |||||||||||||
Waiver/Reimbursement | 0.43 | % | 0.44 | % | 0.41 | % | 0.41 | % | 0.36 | % | |||||||||||||
Net investment income | 0.01 | % | 0.01 | % | 0.01 | %(f) | — | %(e)(f) | — | %(e)(f) | |||||||||||||
Net assets, end of period (000s) | $ | 45,074 | $ | 170,399 | $ | 139,587 | $ | 142,671 | $ | 156,846 |
Past performance is no guarantee of future results.
(a) Rounds to less than $0.001 per share.
(b) Total return at net asset value assuming all distributions reinvested.
(c) 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.
(d) The Fund received a capital contribution from the investment advisor which had an impact of less than 0.01% on total return.
(e) Rounds to less than 0.01%.
(f) 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:
Year Ended August 31, | |||||||||||||||||||||||
Trust Class Shares | 2015 | 2014 | 2013 | 2012 | 2011 | ||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||
Net investment income | — | (a) | — | (a) | — | (a) | — | (a) | — | (a) | |||||||||||||
Net realized gain (loss) on investments | — | (a) | — | (a) | — | (a) | — | — | |||||||||||||||
Total from investment operations | — | (a) | — | (a) | — | (a) | — | (a) | — | (a) | |||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||
From net investment income | — | (a) | — | (a) | — | (a) | — | (a) | — | (a) | |||||||||||||
Increase from Contribution from Advisor | — | (a) | — | — | — | — | |||||||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Total return (b)(c) | 0.01 | %(d) | 0.01 | % | 0.01 | % | 0.00 | %(e) | 0.00 | %(e) | |||||||||||||
Ratios to Average Net Assets/Supplemental Data: | |||||||||||||||||||||||
Gross expenses | 0.36 | % | 0.37 | % | 0.37 | % | 0.37 | % | 0.36 | % | |||||||||||||
Net expenses | 0.08 | % | 0.08 | % | 0.11 | %(f) | 0.11 | %(f) | 0.15 | %(f) | |||||||||||||
Waiver/Reimbursement | 0.28 | % | 0.29 | % | 0.26 | % | 0.26 | % | 0.21 | % | |||||||||||||
Net investment income | 0.01 | % | 0.01 | % | 0.01 | %(f) | — | %(e)(f) | — | %(e)(f) | |||||||||||||
Net assets, end of period (000s) | $ | 1,680,174 | $ | 1,733,185 | $ | 1,799,454 | $ | 1,924,215 | $ | 1,809,236 |
Past performance is no guarantee of future results.
(a) Rounds to less than $0.001 per share.
(b) Total return at net asset value assuming all distributions reinvested.
(c) 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.
(d) The Fund received a capital contribution from the investment advisor which had an impact of less than 0.01% on total return.
(e) Rounds to less than 0.01%.
(f) 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
August 31, 2015
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.
The Fund is an investment company and accordingly follows the investment company accounting and reporting guidance of the Financial Accounting Standards Board (FASB) Accounting Standard Codification Topic 946 Financial Services—Investment Companies.
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 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). These investments may trade in markets that are not considered to be active, but whose values are supported by observable inputs such as U.S. government obligations and agency securities, investment-grade corporate bonds and state, municipal and provincial obligations. For money market funds operating under Rule 2a-7 of the 1940 Act, securities are valued at amortized cost which approximates market value and are considered to be valued using Level 2 inputs.
20
BofA Government Reserves, August 31, 2015
• Level 3 – Prices determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable or less reliable, unobservable inputs may be used. Unobservable inputs may include management's own assumptions about the factors market participants would use in pricing an investment.
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
Security Transactions
Security transactions are accounted for on the trade date. Cost is determined and gains (losses) are based upon the specific identification method for both financial statement and federal income tax purposes.
Income Recognition
Interest income is recorded on the accrual basis. Premium and discount are amortized and accreted, respectively, on all debt securities, unless otherwise noted.
Expenses
General expenses of the Trust are allocated to the 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. Expenses directly attributable to a specific class of shares are charged to that share class.
Determination of Class Net Asset Value
All income, expenses (other than class-specific expenses, which are charged to that share class, as shown on the Statement of Operations) and realized 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 based on the following methodologies: income and expenses are allocated to each class based on the settled shares method, while realized gains (losses) are allocated based on the relative net assets of each class.
Federal Income Tax Status
The Fund intends to qualify each year as a "regulated investment company" under Subchapter M of the Internal
Revenue Code, as amended, and to distribute substantially all of its tax-exempt or taxable income, if any, for its tax year, and as such will not be subject to federal income taxes. In addition, the Fund intends to distribute in each calendar year substantially all of its net investment income, capital gains and certain other amounts, if any, such that the Fund 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 Contribution
Within the period September 1, 2014 to August 31, 2015, the Advisor made voluntary capital contributions to the Fund in the amount of $525,000.
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.
21
BofA Government Reserves, August 31, 2015
The tax character of distributions paid during the years ended August 31, 2015 and August 31, 2014 were as follows:
August 31, | |||||||||||
Distributions paid from | 2015 | 2014 | |||||||||
Ordinary Income* | $ | 621,261 | $ | 616,737 |
* For tax purposes, short-term capital gain distributions, if any, are considered ordinary income distributions.
As of August 31, 2015, the components of distributable earnings on a tax basis were as follows:
Undistributed Tax-Exempt Income | Undistributed Ordinary Income | Undistributed Long-Term Capital Gains | |||||||||
$ | — | $ | 38,545 | $ | — |
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
BofA Advisors, LLC (the "Advisor"), an indirect, wholly owned subsidiary of Bank of America Corporation ("BofA Corp."), 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 | % |
For the year ended August 31, 2015, 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
22
BofA Government Reserves, August 31, 2015
administrative services under a sub-administration agreement. The Advisor pays State Street a fee for all services received under this agreement.
For the year ended August 31, 2015, the 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.
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, 2015. There is no guarantee that this expense limitation will continue after such date.
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 (together, 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 the 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.
Distribution and Shareholder Servicing Fees
BofA Distributors, Inc. (the "Distributor"), an affiliate of the Advisor and an indirect, wholly owned subsidiary of BofA Corp., 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 sales support services. The Distributor is entitled to retain some or all fees payable under the Distribution Plan in certain circumstances, including but not limited to, instances when there is no broker of record or when certain qualification standards have not been met by the broker of record. In certain instances, payments will continue to be made pursuant to the Distribution Plan with respect to shares held in classes that are closed to new investors and shares held by specific investors who are not eligible to make additional purchases in a particular share class.
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.
23
BofA Government Reserves, August 31, 2015
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, 2015 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 the 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, 2015, so that the Fund's ordinary operating expenses (excluding any acquired fund fees and expenses, 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 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 August 31, 2015, the amounts potentially recoverable pursuant to this arrangement are as follows:
Amount of potential recovery expiring August 31: | Total potential | Amount recovered during the year ended | |||||||||||||||||
2018 | 2017 | 2016 | recovery | 08/31/2015 | |||||||||||||||
$ | 3,999,887 | $ | 3,894,941 | $ | 4,126,445 | $ | 12,021,273 | $ | — |
24
BofA Government Reserves, August 31, 2015
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%. Pursuant to a September 25, 2015
amendment, an annual administration fee of $25,000 is also accrued and apportioned to each fund participating in the line of credit based on the average net assets of the participating funds. Prior to the September 25, 2015 amendment, an annual administration fee of $10,000 was accrued and apportioned to each participating fund under the same terms.
For the year ended August 31, 2015, 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.
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.
25
BofA Government Reserves, August 31, 2015
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.
Note 9. Money Market Fund Regulatory Matters
On July 23, 2014, the Securities and Exchange Commission voted to amend Rule 2a-7, which governs money market funds (such as the Fund). The majority of these amendments take effect in 2016. The most significant change is a requirement that institutional (i.e. large volume institutions such as banks, trusts, insurance companies, etc.) prime and institutional municipal money market funds move to a floating net asset value. Retail (i.e. a money market mutual fund that has policies and procedures reasonably designed to limit all beneficial owners of the money market fund to natural persons) prime, municipal, government and treasury money market funds will continue to transact at a stable $1.00 share price. In addition, the boards of trustees of non-government money market funds may impose a temporary liquidity fee of up to 2% of the value of a redemption and/or suspend (or "gate") redemptions temporarily should a money market fund's level of weekly liquid assets fall below 30% of its total assets. At this time, the Fund's management is evaluating the implications of the reforms and their impact on the Fund, including potential effects on the Fund's operations and returns.
26
Report of Independent Registered Public Accounting Firm
To the Trustees of BofA Funds Series Trust and Shareholders of BofA Government Reserves
In our opinion, the accompanying statement of assets and liabilities, including the investment portfolio, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of BofA Government Reserves (the "Fund") (a series of BofA Funds Series Trust) at August 31, 2015, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and the financial highlights for each of the periods indicated, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as "financial statements") are the responsibility of the Fund's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at August 31, 2015 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
Boston, Massachusetts
October 21, 2015
27
Federal Income Tax Information (Unaudited) — BofA Government Reserves
The Fund designates the maximum allowable as qualified interest income for nonresident alien shareholders, as provided in the American Jobs Creation Act of 2004.
The Fund will notify shareholders in January 2016 of amounts for use in preparing 2015 income tax returns.
28
Fund Governance
The Trustees serve terms of indefinite duration. The names, addresses and ages of the Trustees and officers of the Funds in the BofA Funds Series Trust, the year each was first elected or appointed to office, their principal business occupations during at least the last five years, the number of Funds overseen by each Trustee and other directorships they hold are shown below. Each officer listed below serves as an officer of each Fund in the BofA Funds Series Trust.
Independent Trustees
Name, Address, and Year of Birth, Position with Funds, Year First Elected or Appointed to Office | Principal Occupation(s) During Past Five Years, Number of Funds in BofA Funds Series Trust Overseen by Trustee, Other Directorships Held | ||||||
Harrison M. Bains (Born 1943) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Trustee (since 2011) | Retired. Oversees 11 Funds. Mercer Funds (9 funds); BG Medicine, Inc. (life sciences). | ||||||
Paul Glasserman (Born 1962) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Trustee (since 2011) | Jack R. Anderson Professor of Business—Columbia Business School, since 2000 (Senior Vice Dean, 2004-2008; Professor, 1995-2000); Visiting Scholar—Federal Reserve Bank of New York, from 2008 to 2012; Consultant to the U.S. Treasury, 2011-2014; Independent consultant to financial firms since 1995. Oversees 11 Funds. | ||||||
William A. Hawkins (Born 1942) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Trustee (since 2005)1 | Managing Director—Overton Partners (financial consulting), August 2010 to present. Oversees 11 Funds. Columbia Funds (127 funds). | ||||||
R. Glenn Hilliard (Born 1943) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Trustee (since 2005)1 | Chairman and Chief Executive Officer—Hilliard Group LLC (investing and consulting), from 2003 through current; Non-Executive Director & Chairman—CNO Financial Group, Inc. (formerly Conseco, Inc.) (insurance), September 2003-May 2011. Oversees 11 Funds. Columbia Funds (127 funds). | ||||||
William J. Kelly (Born 1960) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Trustee (since 2011) | Chief Executive Officer—Chartered Alternative Investment Analyst Association, January 2014 to present. Oversees 11 Funds. | ||||||
Debra Perry (Born 1951) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Trustee (since 2011) | Retired. Managing Member—Perry Consulting LLC (advisory firm), from 2008 through 2014. Oversees 11 Funds. Korn/Ferry International (recruiting); Sanford C. Bernstein Fund, Inc. (18 funds); Board Member—PartnerRE (reinsurance). |
1 Includes service as trustees of Columbia Funds Series Trust, the predecessor trust.
The Statement of Additional Information includes additional information about the Trustees of the Funds and is available, without charge, upon request by calling 888-331-0904. (Institutional Investors, please call 800-353-0828.)
29
Fund Governance (continued)
Officers
Name, Address, and Year of Birth, Position with Funds, Year First Elected or Appointed to Office | Principal Occupation(s) During Past Five Years | ||||||
Michael J. Pelzar (Born 1968) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 President (since 2010) | President, BofA Global Capital Management Group, LLC since May 2010; Managing Director and Head of Product Management of the Advisor from 2007 to 2010. | ||||||
Kenneth B. Crotty (Born 1961) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Vice President (since 2015) Assistant Treasurer (2014-2015) | Chief Operating Officer, BofA Global Capital Management Group, LLC since August 2013; President KBC Consulting 2012-2013; Global Chief Operating Officer of Mercer Investments and President of Mercer Investments US 2006-2012. | ||||||
Jeffrey R. Coleman (Born 1969) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Senior Vice President, Chief Financial Officer, Chief Accounting Officer (since 2010) and Treasurer (since 2009) | Managing Director of Fund Administration and Transfer Agency Oversight of the Advisor since May 2010; Director of Fund Administration of the Advisor since January 2006. | ||||||
Marina Belaya (Born 1967) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Secretary and Chief Legal Officer (since 2013) | Assistant General Counsel, Director, Bank of America since July 2007. | ||||||
James R. Bordewick (Born 1959) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Senior Vice President and Chief Compliance Officer (since 2010) | Chief Compliance Officer of U.S. Trust, Bank of America Private Wealth Management since 2012; Chief Compliance Officer of the Advisor and Managing Director, Bank of America since May 2010. | ||||||
Barry S. Vallan (Born 1969) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Deputy Treasurer (since 2010) and Controller (since 2006) | Director of Fund Administration of the Advisor since May 2010; Vice President—Fund Treasury of the Advisor since October 2004; Vice President—Fund Administration of the Advisor since May 2002. |
30
Fund Governance (continued)
Officers (continued)
Name, Address, and Year of Birth, Position with Funds, Year First Elected or Appointed to Office | Principal Occupation(s) During Past Five Years | ||||||
Patrick Campbell (Born 1957) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Vice President (since 2015) Assistant Treasurer (2010-2015) | Director of Transfer Agency Oversight, BofA Global Capital Management Group, LLC since May 2010. | ||||||
Rana J. Wright (Born 1978) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Assistant Secretary (since 2014) | Assistant General Counsel and Director, Bank of America, and Chief Legal Officer, BofA Global Capital Management Group, LLC, since June 2014; Partner, Reed Smith LLP, 2012 to 2014; Associate, Reed Smith LLP, 2003 to 2011. | ||||||
Nitin Mehra (Born 1977) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Vice President (since 2015) Assistant Treasurer (2013-2015) | Managing Director and Head of Strategy and Product at BofA Global Capital Management Group, LLC since May 2011; Managing Director of Strategy and Product at BofA Global Capital Management Group, LLC from 2010-2011; Director of Product Strategy and Development of the Advisor from 2008-2010. |
31
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Important Information About This Report
The funds mail one shareholder report to each shareholder address. If you would like more than one report, please call shareholder services at 888.331.0904 (Institutional Investors: 800.353.0828) and additional reports will be sent to you. This report has been prepared for shareholders of the BofA Government 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.
An investment in money market mutual funds is not insured or guaranteed by Bank of America, N.A. or its affiliates, or by the Federal Deposit Insurance Corporation or any other government agency. Although money market mutual funds seek to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in money market mutual funds.
BofA® 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
BofA Global Capital Management
100 Federal Street
Boston, MA 02110
Questions or comments regarding your account or investment in the Funds should be directed to:
Boston Financial Data Services
P.O. Box 8723
Boston, MA 02266-8723
Retail Investors: 888.331.0904
Institutional Investors: 800.353.0828
BofA Government Reserves
Annual Report, August 31, 2015
© 2015 Bank of America Corporation. All rights reserved.
BofA Distributors, Inc.
100 Federal Street, Boston, MA 02110
888.331.0904 (Institutional Investors: 800.353.0828) www.bofacapital.com
AR-GOVT-1015
BofA Funds
Annual Report
August 31, 2015
• 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 | ||||||
Report of Independent Registered Public Accounting Firm | 27 | ||||||
Federal Income Tax Information | 28 | ||||||
Fund Governance | 29 | ||||||
Important Information About This Report | 33 |
The views expressed in this report reflect the current views of the respective parties. These views are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to predict so actual outcomes and results may differ significantly from the views expressed. These views are subject to change at any time based upon economic, market or other conditions and the respective parties disclaim any responsibility to update such views. These views may not be relied on as investment advice and, because investment decisions for a BofA Fund are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any particular BofA Fund. References to specific securities should not be construed as a recommendation or investment advice.
President's Message
To Our Valued Shareholders:
A year ago the consensus within the financial community was that the interest rate environment would soon be more hospitable to money market fund investors as a strengthening U.S. economy finally moved the Federal Reserve ("the Fed") to raise short-term interest rates. That rate hike has yet to materialize, so for liquidity investors, the most important news out of Washington has come not from the Fed, but from the U.S. Securities and Exchange Commission ("SEC"), which adopted sweeping changes to the regulations governing U.S. money market funds.
To take effect in October 2016, the amendments to Rule 2a-7 under the Investment Company Act of 1940 include two important reforms that are prompting investors to reevaluate their liquidity investment strategies:
• Institutional prime and institutional municipal money market funds must "float" their net asset values ("NAVs"), which means the value of the funds' shares would be based on the market value of their underlying securities. Only government funds and funds serving retail investors—defined as "natural persons"—would retain their stable, $1-per-share NAVs.
• The boards of trustees of non-government money market funds may impose a temporary liquidity fee of up to 2% of the value of a redemption or to suspend or "gate" redemptions temporarily should a money market fund's level of weekly liquid assets fall below 30% of its total assets.
These changes are part of a multi-year effort on the part of the SEC to make money market funds more resilient during market crises, when heavy redemption activity can exert strong downward pressure on funds' NAVs.
After extensive analysis, we have concluded that the impact of the rule changes will be less significant than many investors first believed. With regard to floating NAV funds, for example, fund managers still will go to great lengths to maintain the $1-per-share NAV after the floating NAV rule takes effect. If there is any movement around the $1 mark, that variation likely would be very limited under normal market conditions because of the preponderance of short-term, high-quality securities in money market funds. As for liquidity fees and redemption gates, these measures would be a last resort for fund managers because of the reputational damage money market fund companies would incur were they to impose these measures.
Recognizing the importance of money market fund reform to our shareholders, BofA Global Capital Management has launched a series of whitepapers analyzing the potential impact of the rule changes on clients' liquidity-management programs. These papers are available at www.bofacapital.com. Our preparations for the implementation of the reforms are proceeding, and we anticipate no problems meeting the October 2016 compliance deadline.
Shifting back to the macroeconomic environment, the Fed held the benchmark federal funds rate steady in September, but we believe the drop in the U.S. unemployment rate and steady economic growth should allow the central bank to begin increasing the federal funds rate from the current 0% to .25% rate—in the near future. This, in our view, will mark the beginning of a gradual increase in rates that over time should translate into potentially more attractive yields for money market fund investors. We are positioning the BofA Funds to capture the potential benefits of a rising-rate environment.
Given the complexity of modern financial markets and the ever-present threat of unforeseen investment challenges, the managers of the BofA Funds will continue to employ a conservative investment process designed to achieve your most important goals: principal protection, a high degree of liquidity and competitive risk-adjusted yields. We believe our conservative investment posture; our focus on the management of liquidity investments; and the resources available to us as part of one of the world's largest financial institutions position BofA Global Capital Management to help you reach your liquidity objectives.
On behalf of everyone at BofA Global Capital Management, I thank you for the opportunity to have served you over the past year. We appreciate your business, and we look forward to working with you in the months and years ahead.
Sincerely,
Michael Pelzar
President, BofA Global Capital Management
ARQ5HMRY
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 $1,000. Please refer to the Fund's prospectus for additional details.
3/1/15 – 8/31/15 (Unaudited)
Account value at the beginning of the period ($) | 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 | 1,024.60 | 0.60 | 0.61 | 0.12 | ||||||||||||||||||||||||
Investor Class Shares | 1,000.00 | 1,000.00 | 1,000.00 | 1,024.60 | 0.60 | 0.61 | 0.12 | ||||||||||||||||||||||||
Trust Class Shares | 1,000.00 | 1,000.00 | 1,000.00 | 1,024.60 | 0.60 | 0.61 | 0.12 |
Expenses paid during the period are equal to the annualized expense ratio for the share class, multiplied by the average account value over the period, then multiplied by the number of days in the Fund's most recent fiscal half-year and divided by 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 Fund's 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 $1,000, which is invested at the beginning of the period and held for the entire period. Expense information is calculated two ways and each method provides you with different information. The amount listed in the "Actual" column is calculated using the Fund's actual operating expenses and total return for the period. The amount listed in the "Hypothetical" column for each share class assumes that the return each year is 5% before expenses and is calculated based on the Fund's actual operating expenses. You should not use the hypothetical account values and expenses to estimate either your actual account balance at the end of the period or the expenses you paid during this period.
Compare with other funds
Since all mutual funds are required to include the same hypothetical calculations about expenses in shareholder reports, you can use this information to compare the ongoing costs of investing in the Fund with other funds. To do so, compare the 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. As you compare hypothetical examples of other funds, it is important to note that hypothetical examples are meant to highlight the ongoing costs of investing in a fund.
3/1/15 – 8/31/15 (Unaudited)
Account value at the beginning of the period ($) | 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 | 1,024.65 | 0.55 | 0.56 | 0.11 | ||||||||||||||||||||||||
Investor Class Shares | 1,000.00 | 1,000.00 | 1,000.00 | 1,024.65 | 0.55 | 0.56 | 0.11 | ||||||||||||||||||||||||
Trust Class Shares | 1,000.00 | 1,000.00 | 1,000.00 | 1,024.65 | 0.55 | 0.56 | 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.
2
Investment Portfolio – BofA Connecticut Municipal Reserves
August 31, 2015
Municipal Bonds – 89.7% | |||||||||||
Par ($) | Value ($) | ||||||||||
Connecticut – 82.0% | |||||||||||
CT Berlin | |||||||||||
Series 2015 | |||||||||||
1.000% 09/21/15 | 1,180,000 | 1,180,497 | |||||||||
CT Bethel | |||||||||||
Series 2015 | |||||||||||
1.000% 11/15/15 | 1,495,000 | 1,497,499 | |||||||||
CT Bloomfield | |||||||||||
Series 2010 B | |||||||||||
4.000% 10/15/15 | 1,070,000 | 1,075,036 | |||||||||
CT Branford | |||||||||||
Series 2011 | |||||||||||
4.000% 02/01/16 | 400,000 | 405,977 | |||||||||
CT Darien | |||||||||||
Series 2014 | |||||||||||
1.000% 09/09/15 | 925,000 | 925,162 | |||||||||
CT Development Authority | |||||||||||
Imperial Electric Assembly, | |||||||||||
Series 2001, AMT, LOC: Wells Fargo Bank N.A. 0.200% 05/01/21 (09/03/15) (a)(b) | 610,000 | 610,000 | |||||||||
RK Bradley Associates LP, | |||||||||||
Bradley Airport Hotel, Series 2006, LOC: TD Bank N.A.: 0.020% 12/01/28 (09/03/15) (a)(b) | 1,900,000 | 1,900,000 | |||||||||
CT Enfield | |||||||||||
Series 2015 B | |||||||||||
3.000% 08/01/16 | 500,000 | 511,993 | |||||||||
CT Glastonbury | |||||||||||
Series 2014 | |||||||||||
1.000% 11/09/15 | 445,000 | 445,586 | |||||||||
CT Health & Educational Facilities Authority | |||||||||||
CIL Community Resources, | |||||||||||
Series 2011 A, LOC: HSBC Bank USA N.A. 0.020% 07/01/41 (09/03/15) (a)(b) | 1,855,000 | 1,855,000 | |||||||||
Eastern Connecticut Health, | |||||||||||
Series 2010 E, LOC: TD Bank N.A. 0.010% 07/01/34 (09/03/15) (a)(b) | 2,900,000 | 2,900,000 |
Par ($) | Value ($) | ||||||||||
Griffin Hospital, Inc., | |||||||||||
Series 2007 C, LOC: Wells Fargo Bank N.A. 0.020% 07/01/37 (09/03/15) (a)(b) | 175,000 | 175,000 | |||||||||
Hospital for Special Care, | |||||||||||
Series 2010 E, LOC: Federal Home Loan Bank 0.010% 07/01/37 (09/03/15) (a)(b) | 2,090,000 | 2,090,000 | |||||||||
Lawrence & Mem Corp. Oblig., | |||||||||||
Series 2013 H, LOC: TD Bank N.A. 0.010% 07/01/34 (09/02/15) (a)(b) | 2,400,000 | 2,400,000 | |||||||||
The Hotchkiss School, | |||||||||||
Series 2000 A, SPA: U.S. Bank N.A. 0.010% 07/01/30 (09/03/15) (a)(b) | 2,000,000 | 2,000,000 | |||||||||
The Taft School, | |||||||||||
Series 2000 E, LOC: Wells Fargo Bank N.A. 0.040% 07/01/30 (09/02/15) (a)(b) | 2,400,000 | 2,400,000 | |||||||||
Wesleyan University, | |||||||||||
Series 2010 H 0.010% 07/01/40 (09/03/15) (b)(c) | 2,000,000 | 2,000,000 | |||||||||
Yale University, | |||||||||||
Series 2001 V-2, 0.010% 07/01/36 (09/01/15) (b)(c) | 5,160,000 | 5,160,000 | |||||||||
Yale-New Haven Hospital Oblig, | |||||||||||
Series 2014 C LOC: JPMorgan Chase Bank 0.010% 07/01/25 (09/02/15) (a)(b) | 2,300,000 | 2,300,000 | |||||||||
CT Housing Finance Authority | |||||||||||
Series 2014 D2, AMT | |||||||||||
0.300% 11/15/15 | 690,000 | 690,000 | |||||||||
Series 2009 C2 | |||||||||||
SPA: JPMorgan Chase Bank 0.010% 11/15/36 (09/01/15) (a)(b) | 1,075,000 | 1,075,000 | |||||||||
Series 2011 E-3, | |||||||||||
SPA: Bank Tokyo-Mitsubishi UFJ 0.010% 11/15/41 (09/03/15) (a)(b) | 2,000,000 | 2,000,000 |
See Accompanying Notes to Financial Statements.
3
BofA Connecticut Municipal Reserves
August 31, 2015
Municipal Bonds (continued) | |||||||||||
Par ($) | Value ($) | ||||||||||
Series 2015 C3 | |||||||||||
SPA: Royal Bank of Canada 0.010% 11/15/45 (09/03/15) (a)(b) | 1,700,000 | 1,700,000 | |||||||||
CT Manchester | |||||||||||
Series 2007 B | |||||||||||
4.000% 11/15/15 | 415,000 | 418,038 | |||||||||
Series 2015 | |||||||||||
1.250% 02/23/16 | 1,000,000 | 1,004,605 | |||||||||
CT Milford | |||||||||||
Series 2010 | |||||||||||
4.000% 11/01/15 | 225,000 | 226,358 | |||||||||
Series 2014 | |||||||||||
2.000% 11/01/15 | 305,000 | 305,838 | |||||||||
CT Oxford | |||||||||||
Series 2015 | |||||||||||
1.250% 07/21/16 | 1,238,000 | 1,247,609 | |||||||||
CT Simsbury | |||||||||||
Series 2011 B | |||||||||||
2.000% 01/15/16 | 805,000 | 810,086 | |||||||||
CT Southington | |||||||||||
Series 2015 | |||||||||||
1.000% 09/01/15 | 865,000 | 865,000 | |||||||||
CT Special Tax Revenue | |||||||||||
Series 2013, | |||||||||||
LIQ FAC: Citibank N.A. 0.020% 01/01/21 (09/03/15) (a)(b)(d) | 1,000,000 | 1,000,000 | |||||||||
CT Stafford | |||||||||||
Series 2015 | |||||||||||
2.000% 08/03/16 | 1,570,000 | 1,591,280 | |||||||||
Connecticut Total | 44,765,564 | ||||||||||
Mississippi – 3.9% | |||||||||||
MS Business Finance Corp. | |||||||||||
Chevron U.S.A., Inc, | |||||||||||
Series 2011 C GTY AGMT: Chevron Corp. 0.010% 11/01/35 (09/01/15) (a)(b) | 700,000 | 700,000 | |||||||||
MS Jackson County | |||||||||||
Chevron Corp., | |||||||||||
Series 1993, 0.010% 06/01/23 (09/01/15) (b)(c) | 1,400,000 | 1,400,000 | |||||||||
Mississippi Total | 2,100,000 |
Par ($) | Value ($) | ||||||||||
New York – 2.9% | |||||||||||
NY City Water & Sewer System | |||||||||||
Series 2007 BB-1, | |||||||||||
SPA: Bank of Tokyo-Mitsubishi UFJ 0.020% 06/15/36 (09/03/15) (a)(b) | 600,000 | 600,000 | |||||||||
NY Housing Finance Agency | |||||||||||
Durst Pyramid LLC, | |||||||||||
Series 2015 A-1 LOC: Bank of NY Mellon 0.010% 05/01/49 (09/02/15) (a)(b) | 990,000 | 990,000 | |||||||||
New York Total | 1,590,000 | ||||||||||
Utah – 0.9% | |||||||||||
UT Jordanelle Special Service District | |||||||||||
Tuhaye, | |||||||||||
Series 2005, LOC: Wells Fargo Bank N.A. 0.020% 09/01/25 (09/03/15) (a)(b) | 500,000 | 500,000 | |||||||||
Utah Total | 500,000 | ||||||||||
Total Municipal Bonds (cost of $48,955,564) | 48,955,564 | ||||||||||
Closed-End Investment Company – 6.9% | |||||||||||
Other – 6.9% | |||||||||||
Nuveen AMT-Free Municipal Income Fund | |||||||||||
Series 2013 2-1309, | |||||||||||
LIQ FAC: Citibank N.A. 0.100% 12/01/40 (09/03/15) (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 – 96.6% (cost of $52,705,564) (e) | 52,705,564 | ||||||||||
Other Assets & Liabilities, Net – 3.4% | 1,881,684 | ||||||||||
Net Assets – 100.0% | 54,587,248 |
See Accompanying Notes to Financial Statements.
4
BofA Connecticut Municipal Reserves
August 31, 2015
Notes to Investment Portfolio:
Portfolio holdings are subject to change periodically and may not be representative of current holdings.
(a) Variable rate obligations have long dated final maturities, however, their effective maturity is within 397 days in accordance with a demand feature. These securities are secured by a letter of credit or other credit support agreements from banks. These securities are puttable upon not more than one, seven or thirty business days' notice. Put bonds and notes have a demand feature that matures within one year. The interest rate is changed periodically and the interest rate reflects the rate at August 31, 2015.
(b) Parenthetical date represents the effective maturity date for the security which may represent the demand date for puttable or callable securities or the prerefunded date for certain securities where applicable.
(c) Variable rate obligations have long dated final maturities, however, their effective maturity is within 397 days in accordance with a demand feature. These securities are puttable upon not more than one, seven or thirty business days' notice. Put bonds and notes have a demand feature that matures within one year. The interest rate is changed periodically and the interest rate reflects the rate at August 31, 2015.
(d) Security exempt from registration pursuant to Rule 144A under the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At August 31, 2015, these securities, which are not illiquid, amounted to $4,750,000 or 8.7% of net assets for the Fund.
(e) Cost for federal income tax purposes is $52,705,564.
The following table summarizes the inputs used, as of August 31, 2015, 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 | $ | — | $ | 48,955,564 | $ | — | $ | 48,955,564 | |||||||||||
Total Closed-End Investment Company | — | 3,750,000 | — | 3,750,000 | |||||||||||||||
Total Investments | $ | — | $ | 52,705,564 | $ | — | $ | 52,705,564 |
The Fund's assets are assigned to the Level 2 input category which represents short-term obligations which are valued using amortized cost, an income approach which converts future cash flows to a present value based upon the discount or premium at purchase.
For the year ended August 31, 2015, all of the securities held in the Portfolio were Level 2 and there were no transfers to report.
For more information on valuation inputs, please refer to the Security Valuation section in the accompanying Notes to Financial Statements.
At August 31, 2015, the asset allocation of the Fund is as follows:
Asset Allocation | % of Net Assets | ||||||
Municipal Bonds | 89.7 | ||||||
Closed-End Investment Company | 6.9 | ||||||
96.6 | |||||||
Other Assets & Liabilities, Net | 3.4 | ||||||
100.0 |
Acronym | Name | ||||||
AMT | Alternative Minimum Tax | ||||||
GTY AGMT | Guaranty Agreement | ||||||
LIQ FAC | Liquidity Facility | ||||||
LOC | Letter of Credit | ||||||
SPA | Stand-by Purchase Agreement |
See Accompanying Notes to Financial Statements.
5
Investment Portfolio – BofA Massachusetts Municipal Reserves
August 31, 2015
Municipal Bonds – 99.1% | |||||||||||
Par ($) | Value ($) | ||||||||||
Alaska – 1.9% | |||||||||||
AK Valdez | |||||||||||
Exxon Mobil Corp., | |||||||||||
Series 1993 C, 0.010% 12/01/33 (09/01/15) (a)(b) | 2,370,000 | 2,370,000 | |||||||||
Alaska Total | 2,370,000 | ||||||||||
California – 2.0% | |||||||||||
CA State | |||||||||||
Series 2003 A-2 | |||||||||||
LOC: Bank of Montreal 0.010% 05/01/33 (09/01/15) (a)(c) | 2,430,000 | 2,430,000 | |||||||||
California Total | 2,430,000 | ||||||||||
Massachusetts – 95.2% | |||||||||||
MA Arlington | |||||||||||
Series 2014 | |||||||||||
4.000% 11/01/15 | 1,123,000 | 1,130,004 | |||||||||
MA BB&T Municipal Trust | |||||||||||
Massachusetts State Water Resources, | |||||||||||
Series 2007 B, LIQ FAC: Branch Banking & Trust 0.030% 02/01/29 (09/03/15) (a)(c) | 1,700,000 | 1,700,000 | |||||||||
MA City of Easthampton | |||||||||||
Series 2011 | |||||||||||
DPCE: Massachusetts Qualified Bond Program (Chapter 44A) Insured: State Aid Withholding 2.000% 03/01/16 | 500,000 | 503,963 | |||||||||
MA Clipper Tax-Exempt Certificate Trust | |||||||||||
MA Bay Transportation Authority | |||||||||||
Series 2007 LIQ FAC: State Street Bank & Trust Co. 0.050% 11/01/26 (09/03/15) (a)(c) | 6,000,000 | 6,000,000 | |||||||||
MA Development Finance Agency | |||||||||||
Babson College, | |||||||||||
Series 2008 A, LOC: FHLB 0.010% 10/01/32 (09/03/15) (a)(c) | 1,925,000 | 1,925,000 | |||||||||
Bancroft Schools & Communities, | |||||||||||
Series 2001, LOC: TD Bank N.A. 0.020% 09/01/31 (09/03/15) (a)(c) | 3,835,000 | 3,835,000 |
Par ($) | Value ($) | ||||||||||
Beth Israel Deaconess Medical, | |||||||||||
Series 2011 B, LOC: M&T Bank: 0.040% 06/01/41 (09/03/15) (a)(c) | 6,255,000 | 6,255,000 | |||||||||
New Bedford Waste Services, | |||||||||||
Series 2001 AMT, LOC: U.S. Bank N.A. 0.120% 06/01/21 (09/03/15) (a)(c) | 1,940,000 | 1,940,000 | |||||||||
Partners Healthcare System, | |||||||||||
Series 2011 K-1, SPA: Wells Fargo Bank N.A. 0.020% 07/01/46 (09/03/15) (a)(c) | 4,000,000 | 4,000,000 | |||||||||
Seven Hills Foundation, Inc,. | |||||||||||
Series 2008 A LOC: TD Bank N.A. 0.010% 09/01/38 (09/03/15) (a)(c) | 1,800,000 | 1,800,000 | |||||||||
MA Gloucester | |||||||||||
Series 2015 B | |||||||||||
1.000% 02/05/16 | 2,600,000 | 2,607,069 | |||||||||
MA Hanover | |||||||||||
Series 2014 | |||||||||||
1.000% 09/11/15 | 1,476,698 | 1,477,013 | |||||||||
MA Haverhill | |||||||||||
Series 2014 | |||||||||||
DPCE: Massachusetts Qualified Bond Program (Chapter 44A) 1.000% 09/01/15 | 1,500,000 | 1,500,000 | |||||||||
MA Health & Educational Facilities Authority | |||||||||||
Baystate Medical Center, Inc., | |||||||||||
Series 2009 K LOC: Wells Fargo Bank N.A. 0.010% 07/01/39 (09/01/15) (a)(c) | 2,000,000 | 2,000,000 | |||||||||
Harvard University, | |||||||||||
Series 1999 R, 0.010% 11/01/49 (09/01/15) (a)(b) | 5,280,000 | 5,280,000 | |||||||||
Massachusetts Institute of Technology, | |||||||||||
Series 2001 J1 0.010% 07/01/31 (09/03/15) (a)(b) | 1,500,000 | 1,500,000 | |||||||||
The Children's Hospital Corp., | |||||||||||
Series 2010 N3 LOC: U.S. Bank N.A. 0.010% 10/01/38 (09/02/15) (a)(c) | 4,000,000 | 4,000,000 |
See Accompanying Notes to Financial Statements.
6
BofA Massachusetts Municipal Reserves
August 31, 2015
Municipal Bonds (continued) | |||||||||||
Par ($) | Value ($) | ||||||||||
Tufts University: | |||||||||||
Series 1995 G SPA: Wells Fargo Bank N.A. 0.010% 02/15/26 (09/01/15) (a)(c) | 4,495,000 | 4,495,000 | |||||||||
Series 2008 N-2, | |||||||||||
SPA: Wells Fargo Bank N.A. 0.010% 08/15/34 (09/01/15) (a)(c) | 600,000 | 600,000 | |||||||||
Wellesley College, | |||||||||||
Series 1999 G, 0.010% 07/01/39 (09/03/15) (a)(b) | 2,020,000 | 2,020,000 | |||||||||
MA Housing Finance Agency | |||||||||||
ROCS RRII R 11928, | |||||||||||
Series 2011, AMT, LIQ FAC: Citibank N.A. 0.060% 06/01/36 (09/03/15) (a)(c)(d) | 2,695,000 | 2,695,000 | |||||||||
MA Industrial Finance Agency | |||||||||||
Berkshire School, Inc., | |||||||||||
Series 1990, LOC: JPMorgan Chase Bank 0.010% 09/01/20 (09/02/15) (a)(c) | 300,000 | 300,000 | |||||||||
Governor Dummer Academy, | |||||||||||
Series 1996, LOC: TD Bank N.A. 0.020% 07/01/26 (09/03/15) (a)(c) | 1,900,000 | 1,900,000 | |||||||||
MA Lawrence | |||||||||||
Series 2014 A | |||||||||||
DPCE: Massachusetts Qualified Bond Program (Chapter 44A) 1.000% 12/01/15 | 2,000,000 | 2,003,525 | |||||||||
Series 2015 A | |||||||||||
Insured: State Aid Withholding 1.750% 09/01/16 (e) | 3,000,000 | 3,038,220 | |||||||||
Series 2015 | |||||||||||
DPCE: Massachusetts Qualified Bond Program (Chapter 44A) 1.250% 06/01/16 | 1,822,450 | 1,834,129 | |||||||||
MA Lynn | |||||||||||
Series 2010 | |||||||||||
Insured: State Aid Withholding 4.000% 09/01/15 | 2,280,000 | 2,280,000 | |||||||||
MA Mansfield | |||||||||||
Series 2014 | |||||||||||
1.000% 10/23/15 | 1,725,000 | 1,726,863 |
Par ($) | Value ($) | ||||||||||
MA Medfield | |||||||||||
Series 2015 | |||||||||||
2.000% 05/15/16 | 885,000 | 895,032 | |||||||||
MA Millis | |||||||||||
Series 2015 | |||||||||||
2.000% 08/01/16 | 3,730,000 | 3,784,331 | |||||||||
MA Nantucket | |||||||||||
Series 2015 | |||||||||||
0.750% 11/13/15 | 2,400,000 | 2,402,905 | |||||||||
MA Needham | |||||||||||
Series 2015 | |||||||||||
2.000% 11/15/15 | 860,000 | 863,159 | |||||||||
MA Newburyport | |||||||||||
Series 2015 | |||||||||||
0.850% 10/23/15 | 4,769,435 | 4,774,378 | |||||||||
MA Newton | |||||||||||
Series 2015: | |||||||||||
1.250% 03/15/16 | 1,250,000 | 1,256,348 | |||||||||
2.000% 11/01/15 | 910,000 | 912,731 | |||||||||
MA Northborough | |||||||||||
Series 2015 | |||||||||||
1.000% 01/22/16 | 1,650,000 | 1,654,493 | |||||||||
MA RBC Municipal Products, Inc. Trust | |||||||||||
Series 2012 E-38, | |||||||||||
LOC: Royal Bank of Canada 0.030% 01/01/16 (09/03/15) (a)(c)(d) | 10,530,000 | 10,530,000 | |||||||||
MA University of Massachusetts Building Authority | |||||||||||
Series 2005 2, | |||||||||||
5.000% 11/01/16 | 5,000,000 | 5,040,450 | |||||||||
Series 2011 1, | |||||||||||
SPA: Wells Fargo Bank N.A. 0.020% 11/01/34 (09/02/15) (a)(c) | 4,200,000 | 4,200,000 | |||||||||
MA Walpole | |||||||||||
Series 2014 | |||||||||||
0.500% 11/13/15 | 774,872 | 775,180 | |||||||||
MA Water Resources Authority | |||||||||||
Series 2008 E, | |||||||||||
SPA: JPMorgan Chase Bank 0.030% 08/01/37 (09/03/15) (a)(c) | 10,485,000 | 10,485,000 | |||||||||
Massachusetts Total | 117,919,793 | ||||||||||
Total Municipal Bonds (cost of $122,719,793) | 122,719,793 |
See Accompanying Notes to Financial Statements.
7
BofA Massachusetts Municipal Reserves
August 31, 2015
Closed-End Investment Company – 6.5% | |||||||||||
Par ($) | Value ($) | ||||||||||
Other – 6.5% | |||||||||||
Nuveen AMT-Free Municipal Income Fund | |||||||||||
Series 2013 2-1309, | |||||||||||
LIQ FAC: Citibank N.A. 0.100% 12/01/40 (09/03/15) (a)(c)(d) | 8,000,000 | 8,000,000 | |||||||||
Other Total | 8,000,000 | ||||||||||
Total Closed-End Investment Company (cost of $8,000,000) | 8,000,000 | ||||||||||
Total Investments – 105.6% (cost of $130,719,793) (f) | 130,719,793 | ||||||||||
Other Assets & Liabilities, Net – (5.6)% | (6,886,831 | ) | |||||||||
Net Assets – 100.0% | 123,832,962 |
Notes to Investment Portfolio:
Portfolio holdings are subject to change periodically and may not be representative of current holdings.
(a) Parenthetical date represents the effective maturity date for the security which may represent the demand date for puttable or callable securities or the prerefunded date for certain securities where applicable.
(b) Variable rate obligations have long dated final maturities, however, their effective maturity is within 397 days in accordance with a demand feature. These securities are puttable upon not more than one, seven or thirty business days' notice. Put bonds and notes have a demand feature that matures within one year. The interest rate is changed periodically and the interest rate reflects the rate at August 31, 2015.
(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 secured by a letter of credit or other credit support agreements from banks. These securities are puttable upon not more than one, seven or thirty business days' notice. Put bonds and notes have a demand feature that matures within one year. The interest rate is changed periodically and the interest rate reflects the rate at August 31, 2015.
(d) Security exempt from registration pursuant to Rule 144A under the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At August 31, 2015, these securities, which are not illiquid, amounted to $21,225,000 or 17.1% of net assets for the Fund.
(e) Security purchased on a delayed delivery basis and, as such, payment for and delivery of the security has not yet taken place. Generally, no interest will accrue to the Fund until the security is delivered.
(f) Cost for federal income tax purposes is $130,719,793.
The following table summarizes the inputs used, as of August 31, 2015, 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 | $ | — | $ | 122,719,793 | $ | — | $ | 122,719,793 | |||||||||||
Total Closed-End Investment Company | — | 8,000,000 | — | 8,000,000 | |||||||||||||||
Total Investments | $ | — | $ | 130,719,793 | $ | — | $ | 130,719,793 |
The Fund's assets are assigned to the Level 2 input category which represents short-term obligations which are valued using amortized cost, an income approach which converts future cash flows to a present value based upon the discount or premium at purchase.
For the year ended August 31, 2015, all of the securities held in the Portfolio were Level 2 and there were no transfers to report.
For more information on valuation inputs, please refer to the Security Valuation section in the accompanying Notes to Financial Statements.
At August 31, 2015, the asset allocation of the Fund is as follows:
Asset Allocation | % of Net Assets | ||||||
Municipal Bonds | 99.1 | ||||||
Closed-End Investment Company | 6.5 | ||||||
105.6 | |||||||
Other Assets & Liabilities, Net | (5.6 | ) | |||||
100.0 |
Acronym | Name | ||||||
AMT | Alternative Minimum Tax | ||||||
DPCE | Direct Pay Credit Enhancement | ||||||
FHLB | Federal Home Loan Bank | ||||||
LIQ FAC | Liquidity Facility | ||||||
LOC | Letter of Credit | ||||||
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
August 31, 2015
($) | ($) | ||||||||||
BofA Connecticut Municipal Reserves | BofA Massachusetts Municipal Reserves | ||||||||||
Assets | |||||||||||
Investments, at amortized cost approximating value | 52,705,564 | 130,719,793 | |||||||||
Cash | 1,878,189 | 1,049,245 | |||||||||
Receivable for: | |||||||||||
Interest | 63,818 | 290,066 | |||||||||
Expense reimbursement due from investment advisor | 16,827 | 16,477 | |||||||||
Trustees' deferred compensation plan | 1,959 | 2,338 | |||||||||
Prepaid expenses | 485 | 1,069 | |||||||||
Total Assets | 54,666,842 | 132,078,988 | |||||||||
Liabilities | |||||||||||
Payable for: | |||||||||||
Investments purchased | — | 5,123,783 | |||||||||
Investments purchased on a delayed delivery basis | — | 3,038,220 | |||||||||
Investment advisory fee | 1,849 | 3,581 | |||||||||
Pricing and bookkeeping fees | 4,549 | 5,463 | |||||||||
Transfer agent fee | 260 | — | |||||||||
Trustees' fees | 2,695 | 2,728 | |||||||||
Audit fee | 35,027 | 35,027 | |||||||||
Legal fee | 21,225 | 21,225 | |||||||||
Custody fee | 868 | 1,266 | |||||||||
Chief Compliance Officer expenses | 1,263 | 1,283 | |||||||||
Trustees' deferred compensation plan | 1,959 | 2,338 | |||||||||
Other liabilities | 9,899 | 11,112 | |||||||||
Total Liabilities | 79,594 | 8,246,026 | |||||||||
Net Assets | 54,587,248 | 123,832,962 | |||||||||
Net Assets Consist of | |||||||||||
Paid-in capital | 54,587,096 | 123,832,962 | |||||||||
Undistributed net investment income | 144 | — | |||||||||
Accumulated net realized gain | 8 | — | |||||||||
Net Assets | 54,587,248 | 123,832,962 | |||||||||
Capital Class Shares | |||||||||||
Net assets | $ | 54,057,913 | $ | 116,683,496 | |||||||
Shares outstanding | 54,054,665 | 116,677,933 | |||||||||
Net asset value per share | $ | 1.00 | $ | 1.00 | |||||||
Investor Class Shares | |||||||||||
Net assets | $ | 237,918 | $ | 1,249,292 | |||||||
Shares outstanding | 237,904 | 1,249,234 | |||||||||
Net asset value per share | $ | 1.00 | $ | 1.00 | |||||||
Trust Class Shares | |||||||||||
Net assets | $ | 291,417 | $ | 5,900,174 | |||||||
Shares outstanding | 291,399 | 5,899,892 | |||||||||
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 Year Ended August 31, 2015
($) | ($) | ||||||||||
BofA Connecticut Municipal Reserves | BofA Massachusetts Municipal Reserves | ||||||||||
Investment Income | |||||||||||
Interest | 62,173 | 133,382 | |||||||||
Expenses | |||||||||||
Investment advisory fee | 83,781 | 182,099 | |||||||||
Administration fee | 9,476 | 65,189 | |||||||||
Distribution fee: | |||||||||||
Investor Class Shares | 534 | 1,072 | |||||||||
Service fee: | |||||||||||
Investor Class Shares | 1,335 | 2,679 | |||||||||
Shareholder administration fee: | |||||||||||
Trust Class Shares | 347 | 3,640 | |||||||||
Transfer agent fee | 5,581 | 6,518 | |||||||||
Pricing and bookkeeping fees | 49,881 | 60,305 | |||||||||
Trustees' fees | 29,397 | 29,789 | |||||||||
Custody fee | 4,780 | 6,572 | |||||||||
Registration fees | 19,369 | 19,369 | |||||||||
Audit fee | 44,150 | 44,150 | |||||||||
Legal fees | 98,375 | 98,375 | |||||||||
Chief Compliance Officer expenses | 7,416 | 7,506 | |||||||||
Other expenses | 23,619 | 25,575 | |||||||||
Total Expenses | 378,041 | 552,838 | |||||||||
Fees waived or expenses reimbursed by investment advisor and/or administrator | (313,650 | ) | (412,075 | ) | |||||||
Fees waived by distributor: | |||||||||||
Investor Class Shares | (1,871 | ) | (3,747 | ) | |||||||
Trust Class Shares | (347 | ) | (3,634 | ) | |||||||
Net Expenses | 62,173 | 133,382 | |||||||||
Net Investment Income | — | — | |||||||||
Net realized gain on investments | 8 | — | |||||||||
Net Increase Resulting from Operations | 8 | — |
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 | |||||||||||||||||
Year Ended August 31, | Year Ended August 31, | ||||||||||||||||||
2015 ($) | 2014 ($) | 2015 ($) | 2014 ($) | ||||||||||||||||
Operations | |||||||||||||||||||
Net realized gain on investments | 8 | 14,445 | — | 12,788 | |||||||||||||||
Net increase resulting from operations | 8 | 14,445 | — | 12,788 | |||||||||||||||
Distributions to Shareholders | |||||||||||||||||||
From net investment income: | |||||||||||||||||||
Capital Class Shares | — | (14,536 | ) | — | (26,302 | ) | |||||||||||||
Investor Class Shares | — | (451 | ) | — | (240 | ) | |||||||||||||
Trust Class Shares | — | (33 | ) | — | (122 | ) | |||||||||||||
From net realized gains: | |||||||||||||||||||
Capital Class Shares | (14,215 | ) | — | (12,404 | ) | (3,707 | ) | ||||||||||||
Investor Class Shares | (90 | ) | — | (97 | ) | (34 | ) | ||||||||||||
Trust Class Shares | (140 | ) | — | (287 | ) | (16 | ) | ||||||||||||
Total distributions to shareholders | (14,445 | ) | (15,020 | ) | (12,788 | ) | (30,421 | ) | |||||||||||
Net Capital Stock Transactions | (3,878,961 | ) | (13,011,913 | ) | (8,240,966 | ) | (19,187,612 | ) | |||||||||||
Total decrease in net assets | (3,893,398 | ) | (13,012,488 | ) | (8,253,754 | ) | (19,205,245 | ) | |||||||||||
Net Assets | |||||||||||||||||||
Beginning of period | 58,480,646 | 71,493,134 | 132,086,716 | 151,291,961 | |||||||||||||||
End of period | 54,587,248 | 58,480,646 | 123,832,962 | 132,086,716 | |||||||||||||||
Undistributed net investment income at end of period | 144 | — | — | — |
See Accompanying Notes to Financial Statements.
11
Statements of Changes in Net Assets (continued) – BofA Connecticut
Municipal Reserves
Capital Stock Activity | |||||||||||||||||||
Year Ended August 31, | |||||||||||||||||||
2015 | 2014 | ||||||||||||||||||
Shares | Dollars ($) | Shares | Dollars ($) | ||||||||||||||||
Capital Class Shares | |||||||||||||||||||
Subscriptions | 102,295,215 | 102,295,215 | 110,812,777 | 110,812,777 | |||||||||||||||
Distributions reinvested | 82 | 82 | 91 | 91 | |||||||||||||||
Redemptions | (105,174,152 | ) | (105,174,152 | ) | (122,894,548 | ) | (122,894,548 | ) | |||||||||||
Net decrease | (2,878,855 | ) | (2,878,855 | ) | (12,081,680 | ) | (12,081,680 | ) | |||||||||||
Investor Class Shares | |||||||||||||||||||
Subscriptions | 8,579,193 | 8,579,193 | 8,979,693 | 8,979,693 | |||||||||||||||
Distributions reinvested | 37 | 37 | — | — | |||||||||||||||
Redemptions | (9,386,362 | ) | (9,386,362 | ) | (10,248,955 | ) | (10,248,955 | ) | |||||||||||
Net decrease | (807,132 | ) | (807,132 | ) | (1,269,262 | ) | (1,269,262 | ) | |||||||||||
Trust Class Shares | |||||||||||||||||||
Subscriptions | 1,200,868 | 1,200,868 | 2,613,728 | 2,613,728 | |||||||||||||||
Distributions reinvested | 43 | 43 | — | — | |||||||||||||||
Redemptions | (1,393,885 | ) | (1,393,885 | ) | (2,274,699 | ) | (2,274,699 | ) | |||||||||||
Net increase (decrease) | (192,974 | ) | (192,974 | ) | 339,029 | 339,029 |
See Accompanying Notes to Financial Statements.
12
Statements of Changes in Net Assets (continued) – BofA Massachusetts
Municipal Reserves
Capital Stock Activity | |||||||||||||||||||
Year Ended August 31, | |||||||||||||||||||
2015 | 2014 | ||||||||||||||||||
Shares | Dollars ($) | Shares | Dollars ($) | ||||||||||||||||
Capital Class Shares | |||||||||||||||||||
Subscriptions | 251,974,499 | 251,974,499 | 248,924,312 | 248,924,312 | |||||||||||||||
Distributions reinvested | 192 | 192 | 456 | 456 | |||||||||||||||
Redemptions | (265,086,219 | ) | (265,086,219 | ) | (264,560,625 | ) | (264,560,625 | ) | |||||||||||
Net decrease | (13,111,528 | ) | (13,111,528 | ) | (15,635,857 | ) | (15,635,857 | ) | |||||||||||
Investor Class Shares | |||||||||||||||||||
Subscriptions | 640,346 | 640,346 | 451,016 | 451,016 | |||||||||||||||
Distributions reinvested | 27 | 27 | — | — | |||||||||||||||
Redemptions | (389,233 | ) | (389,233 | ) | (471,251 | ) | (471,251 | ) | |||||||||||
Net increase (decrease) | 251,140 | 251,140 | (20,235 | ) | (20,235 | ) | |||||||||||||
Trust Class Shares | |||||||||||||||||||
Subscriptions | 33,289,873 | 33,289,873 | 11,643,432 | 11,643,432 | |||||||||||||||
Distributions reinvested | 27 | 27 | — | — | |||||||||||||||
Redemptions | (28,670,478 | ) | (28,670,478 | ) | (15,174,952 | ) | (15,174,952 | ) | |||||||||||
Net increase (decrease) | 4,619,422 | 4,619,422 | (3,531,520 | ) | (3,531,520 | ) |
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:
Year Ended August 31, | |||||||||||||||||||||||
Capital Class Shares | 2015 | 2014 | 2013 | 2012 (a) | 2011 | ||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||
Net investment income | — | — | — | (b) | 0.001 | 0.001 | |||||||||||||||||
Net realized gain (loss) on investments | — | (b) | — | (b) | — | — | — | ||||||||||||||||
Total from investment operations | — | (b) | — | (b) | — | (b) | 0.001 | 0.001 | |||||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||
From net investment income | — | — | (b) | — | (b) | (0.001 | ) | (0.001 | ) | ||||||||||||||
From net realized gains | — | (b) | — | — | — | — | |||||||||||||||||
Total distributions to shareholders | — | (b) | — | (b) | — | (b) | (0.001 | ) | (0.001 | ) | |||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Total return (c)(d) | 0.02 | % | 0.02 | % | 0.05 | % | 0.11 | % | 0.11 | % | |||||||||||||
Ratios to Average Net Assets/Supplemental Data: | |||||||||||||||||||||||
Gross expenses | 0.67 | % | 0.62 | % | 0.60 | % | 0.52 | % | 0.57 | % | |||||||||||||
Net expenses | 0.11 | % | 0.14 | % | 0.18 | %(e) | 0.20 | %(e) | 0.20 | %(e) | |||||||||||||
Waiver/Reimbursement | 0.56 | % | 0.48 | % | 0.42 | % | 0.32 | % | 0.37 | % | |||||||||||||
Net investment income | — | — | 0.02 | %(e) | 0.04 | %(e) | 0.11 | %(e) | |||||||||||||||
Net assets, end of period (000s) | $ | 54,058 | $ | 56,951 | $ | 69,033 | $ | 94,404 | $ | 98,206 |
Past performance is no guarantee of future results.
(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) 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) 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:
Year Ended August 31, | |||||||||||||||||||
Investor Class Shares | 2015 | 2014 | 2013 | 2012 (a) | |||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||
Income from Investment Operations: | |||||||||||||||||||
Net investment income | — | — | — | (b) | — | ||||||||||||||
Net realized gain (loss) 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) | — | (b) | |||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||
Total return (c)(d) | 0.02 | % | 0.02 | % | 0.03 | % | 0.06 | %(e) | |||||||||||
Ratios to Average Net Assets/Supplemental Data: | |||||||||||||||||||
Gross expenses | 1.02 | % | 0.98 | % | 0.94 | % | 0.86 | %(f) | |||||||||||
Net expenses | 0.11 | % | 0.15 | % | 0.21 | %(g) | 0.25 | %(f)(g) | |||||||||||
Waiver/Reimbursement | 0.91 | % | 0.83 | % | 0.73 | % | 0.61 | %(f) | |||||||||||
Net investment income | — | — | — | %(g)(h) | — | (g) | |||||||||||||
Net assets, end of period (000s) | $ | 238 | $ | 1,045 | $ | 2,315 | $ | 9,228 |
Past performance is no guarantee of future results.
(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:
Year Ended August 31, | |||||||||||||||||||
Trust Class Shares | 2015 | 2014 | 2013 | 2012 (a) | |||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||
Income from Investment Operations: | |||||||||||||||||||
Net investment income | — | — | — | (b) | — | ||||||||||||||
Net realized gain (loss) on investments | — | (b) | — | (b) | — | — | |||||||||||||
Total from investment operations | — | (b) | — | (b) | — | (b) | — | ||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||
From net investment income | — | — | (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 | $ | 1.00 | |||||||||||
Total return (c)(d) | 0.02 | % | 0.02 | % | 0.03 | % | 0.00 | % | |||||||||||
Ratios to Average Net Assets/Supplemental Data: | |||||||||||||||||||
Gross expenses | 0.77 | % | 0.71 | % | 0.74 | % | 0.60 | %(e) | |||||||||||
Net expenses | 0.11 | % | 0.14 | % | 0.20 | %(f) | 0.23 | %(e)(f) | |||||||||||
Waiver/Reimbursement | 0.66 | % | 0.57 | % | 0.54 | % | 0.37 | %(e) | |||||||||||
Net investment income | — | — | — | %(f)(g) | — | (f) | |||||||||||||
Net assets, end of period (000s) | $ | 291 | $ | 485 | $ | 145 | $ | 100 |
Past performance is no guarantee of future results.
(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) Annualized.
(f) The benefits derived from expense reductions had an impact of less than 0.01%.
(g) 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:
Year Ended August 31, | |||||||||||||||||||||||
Capital Class Shares | 2015 | 2014 | 2013 | 2012 (a) | 2011 | ||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||
Net investment income | — | — | — | (b) | 0.001 | 0.001 | |||||||||||||||||
Net realized gain (loss) on investments | — | — | (b) | — | — | — | |||||||||||||||||
Total from investment operations | — | — | (b) | — | (b) | 0.001 | 0.001 | ||||||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||
From net investment income | — | — | (b) | — | (b) | (0.001 | ) | (0.001 | ) | ||||||||||||||
From net realized gains | — | (b) | — | (b) | — | — | — | (b) | |||||||||||||||
Total distributions to shareholders | — | (b) | — | (b) | — | (b) | (0.001 | ) | (0.001 | ) | |||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Total return (c)(d) | 0.01 | % | 0.02 | % | 0.04 | %(e) | 0.07 | % | 0.12 | % | |||||||||||||
Ratios to Average Net Assets/Supplemental Data: | |||||||||||||||||||||||
Gross expenses | 0.45 | % | 0.42 | % | 0.43 | % | 0.39 | % | 0.42 | % | |||||||||||||
Net expenses | 0.11 | % | 0.14 | % | 0.18 | %(f) | 0.20 | %(f) | 0.20 | %(f) | |||||||||||||
Waiver/Reimbursement | 0.34 | % | 0.28 | % | 0.25 | % | 0.19 | % | 0.22 | % | |||||||||||||
Net investment income | — | — | 0.02 | %(f) | 0.04 | %(f) | 0.11 | %(f) | |||||||||||||||
Net assets, end of period (000s) | $ | 116,683 | $ | 129,808 | $ | 145,460 | $ | 186,824 | $ | 198,945 |
Past performance is no guarantee of future results.
(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) 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) 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.
(f) 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:
Year Ended August 31, | |||||||||||||||||||
Investor Class Shares | 2015 | 2014 | 2013 | 2012 (a) | |||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 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) | — | |||||||||||||
From net realized gains | — | (b) | — | (b) | — | — | |||||||||||||
Total distributions to shareholders | — | (b) | — | (b) | — | (b) | — | ||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||
Total return (c)(d) | 0.01 | % | 0.02 | % | 0.02 | %(e) | 0.03 | %(f) | |||||||||||
Ratios to Average Net Assets/Supplemental Data: | |||||||||||||||||||
Gross expenses | 0.80 | % | 0.77 | % | 0.78 | % | 0.73 | %(g) | |||||||||||
Net expenses | 0.11 | % | 0.14 | % | 0.19 | %(h) | 0.24 | %(g)(h) | |||||||||||
Waiver/Reimbursement | 0.69 | % | 0.63 | % | 0.59 | % | 0.49 | %(g) | |||||||||||
Net investment income | — | — | — | (h) | — | (h) | |||||||||||||
Net assets, end of period (000s) | $ | 1,249 | $ | 998 | $ | 1,019 | $ | 586 |
Past performance is no guarantee of future results.
(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) 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.
(f) Not annualized.
(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:
Year Ended August 31, | |||||||||||||||||||
Trust Class Shares | 2015 | 2014 | 2013 | 2012 (a) | |||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 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) | — | |||||||||||||
From net realized gains | — | (b) | — | (b) | — | — | |||||||||||||
Total distributions to shareholders | — | (b) | — | (b) | — | (b) | — | ||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||
Total return (c)(d) | 0.01 | % | 0.02 | % | 0.02 | %(e) | 0.00 | % | |||||||||||
Ratios to Average Net Assets/Supplemental Data: | |||||||||||||||||||
Gross expenses | 0.55 | % | 0.52 | % | 0.53 | % | 0.48 | %(f) | |||||||||||
Net expenses | 0.11 | % | 0.14 | % | 0.17 | %(g)(h) | 0.23 | %(f)(h) | |||||||||||
Waiver/Reimbursement | 0.44 | % | 0.38 | % | 0.36 | % | 0.25 | %(f) | |||||||||||
Net investment income | — | — | — | (h) | — | (h) | |||||||||||||
Net assets, end of period (000s) | $ | 5,900 | $ | 1,281 | $ | 4,813 | $ | 100 |
Past performance is no guarantee of future results.
(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) 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.
(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.
19
Notes to Financial Statements – BofA Money Market Funds
August 31, 2015
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.
Each Fund is an investment company and accordingly follows the investment company accounting and reporting guidance of the Financial Accounting Standards Board (FASB)
Accounting Standard Codification Topic 946 Financial Services—Investment Companies.
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 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). These investments may trade in markets that are not considered to be active, but
20
BofA Money Market Funds, August 31, 2015
whose values are supported by observable inputs such as U.S. government obligations and agency securities, investment-grade corporate bonds and state, municipal and provincial obligations. For money market funds operating under Rule 2a-7 of the 1940 Act, securities are valued at amortized cost which approximates market value and are considered to be valued using Level 2 inputs.
• Level 3 – Prices determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable or less reliable, unobservable inputs may be used. Unobservable inputs may include management's own assumptions about the factors market participants would use in pricing an investment.
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
Security Transactions
Security transactions are accounted for on the trade date. Cost is determined and gains (losses) are based upon the specific identification method for both financial statement and federal income tax purposes.
Income Recognition
Interest income is recorded on the accrual basis. Premium and discount are amortized and accreted, respectively, on all debt securities, unless otherwise noted.
Expenses
General expenses of the Trust are allocated to the Funds and other series of the Trust based upon relative net assets or other expense allocation methodologies determined by the nature of the expense. Expenses directly attributable to a Fund are charged to such Fund. Expenses directly attributable to a specific class of shares are charged to that share class.
Determination of Class Net Asset Value
All income, expenses (other than class-specific expenses, which are charged to that share class, as shown on the Statements of Operations) and realized 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 based on the following methodologies: income and expenses are allocated
to each class based on the settled shares method, while realized gains (losses) are allocated based on the relative net assets of each class.
Federal Income Tax Status
Each Fund intends to qualify each year as a "regulated investment company" under Subchapter M of the Internal Revenue Code, as amended, and to distribute substantially all of its tax-exempt or taxable income, if any, for its tax year, and as such will not be subject to federal income taxes. In addition, each Fund intends to distribute in each calendar year substantially all of its net investment income, capital gains and certain other amounts, if any, such that each Fund 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.
21
BofA Money Market Funds, August 31, 2015
For the year ended August 31, 2015, permanent book and tax basis differences resulting primarily from differing treatments for disallowance of excess expenses allocable to tax-exempt income were identified and reclassified among the components of the Funds' net assets as follows:
Fund | Undistributed Net Investment Income | Accumulated Net Realized Gain (Loss) | Paid-In-Capital | ||||||||||||
BofA Connecticut Municipal Reserves | $ | 144 | $ | — | $ | (144 | ) | ||||||||
BofA Massachusetts Municipal Reserves | $ | — | $ | — | $ | — |
The tax character of distributions paid during the years ended August 31, 2015 and August 31, 2014 were as follows:
August 31, 2015 | |||||||||||||||
Fund | Tax-Exempt Income | Ordinary Income* | Long-Term Capital Gains | ||||||||||||
BofA Connecticut Municipal Reserves | $ | — | $ | 14,445 | $ | — | |||||||||
BofA Massachusetts Municipal Reserves | $ | — | $ | 12,788 | $ | — | |||||||||
August 31, 2014 | |||||||||||||||
Fund | Tax-Exempt Income | Ordinary Income* | Long-Term Capital Gains | ||||||||||||
BofA Connecticut Municipal Reserves | $ | 15,020 | $ | — | $ | — | |||||||||
BofA Massachusetts Municipal Reserves | $ | 26,663 | $ | 3,758 | $ | — |
* For tax purposes, short-term capital gain distributions, if any, are considered ordinary income distributions.
The components of distributable earnings on a tax basis as of August 31, 2015 were as follows:
Fund | Undistributed Tax-exempt Income | Undistributed Ordinary Income | Undistributed Long-Term Capital Gains | ||||||||||||
BofA Connecticut Municipal Reserves | $ | — | $ | 152 | $ | — | |||||||||
BofA Massachusetts Municipal Reserves | $ | — | $ | — | $ | — |
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,
22
BofA Money Market Funds, August 31, 2015
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 ("BofA Corp."), 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 | % |
For the year ended August 31, 2015, 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 year ended August 31, 2015, the 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 each Fund's average daily net assets.
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, 2015. There is no guarantee that this expense limitation will continue after such date.
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 (together, 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 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
23
BofA Money Market Funds, August 31, 2015
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 the Transfer, Dividend Disbursing and Shareholders' Servicing Agent Agreement with the Trust, the Transfer Agent provides transfer agency, dividend disbursing agency and shareholder servicing agency services to the Funds.
Distribution and Shareholder Servicing Fees
BofA Distributors, Inc. (the "Distributor"), an affiliate of the Advisor and an indirect, wholly owned subsidiary of BofA Corp., 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 sales support services. The Distributor is entitled to retain some or all fees payable under the Distribution Plan in certain circumstances, including but not limited to, instances when there is no broker of record or when certain qualification standards have not been met by the broker of record. In certain instances, payments will continue to be made pursuant to the Distribution Plan with respect to shares held in classes that are closed to new investors and shares held by specific investors who are not eligible to make additional purchases in a particular share class.
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 – BofA Connecticut Municipal Reserves | 0.10 | % | 0.10 | % | |||||||
Investor Class Shares – BofA Massachusetts Municipal Reserves | 0.10 | % | 0.10 | % | |||||||
Shareholder Servicing Plan: | |||||||||||
Investor Class Shares – BofA Connecticut Municipal Reserves | 0.25 | % | 0.25 | % | |||||||
Investor Class Shares – BofA 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 the 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 – BofA Connecticut Municipal Reserves | 0.10 | % | 0.10 | % | |||||||
Trust Class Shares – BofA Massachusetts Municipal Reserves | 0.10 | % | 0.10 | % |
24
BofA Money Market Funds, August 31, 2015
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, 2015, so that the Funds' ordinary operating expenses (excluding any acquired fund fees and expenses, 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 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 August 31, 2015, the amounts potentially recoverable pursuant to this arrangement are as follows:
Amount of potential recovery expiring August 31: | Total potential | Amount recovered during the year | |||||||||||||||||||||
2018 | 2017 | 2016 | recovery | ended 08/31/2015 | |||||||||||||||||||
BofA Connecticut Municipal Reserves | $ | 264,024 | $ | 270,502 | $ | 224,361 | $ | 758,887 | $ | — | |||||||||||||
BofA Massachusetts Municipal Reserves | $ | 302,455 | $ | 315,924 | $ | 256,860 | $ | 875,239 | $ | — |
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 Statements 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%. Pursuant to a September 25, 2015 amendment, an annual administration fee of $25,000 is also accrued and apportioned to each fund participating in the line of credit based on the average net assets of the participating funds. Prior to the September 25, 2015 amendment, an annual administration fee of $10,000 was accrued and apportioned to each participating fund under the same terms.
For the year ended August 31, 2015, 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 Funds' shares. Shares held in omnibus accounts may be beneficially held by one or more individuals or entities other than the owner of record.
25
BofA Money Market Funds, August 31, 2015
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 Funds' 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, each Fund's 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 Funds reserve the right to pay redemption proceeds with securities (a "redemption in kind"). The Funds 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.
Note 8. Money Market Fund Regulatory Matters
On July 23, 2014, the Securities and Exchange Commission voted to amend Rule 2a-7, which governs money market funds (such as the Funds). The majority of these amendments take effect in 2016. The most significant change is a requirement that institutional (i.e. large volume institutions such as banks, trusts, insurance companies, etc.) prime and institutional municipal money market funds move to a floating net asset value. Retail (i.e. a money market mutual fund that has policies and procedures reasonably designed to limit all beneficial owners of the money market fund to natural persons) prime, municipal, government and treasury money market funds will continue to transact at a stable $1.00 share price. In addition, the boards of trustees of non-government money market funds may impose a temporary liquidity fee of up to 2% of the value of a redemption and/or suspend (or "gate") redemptions temporarily should a money market fund's level of weekly liquid assets fall below 30% of its total assets. At this time, the Funds' management is evaluating the implications of the reforms and their impact on the Funds, including potential effects on the Funds' operations and returns.
26
Report of Independent Registered Public Accounting Firm
To the Trustees of BofA Funds Series Trust and Shareholders of BofA Connecticut Municipal Reserves and BofA Massachusetts Municipal Reserves
In our opinion, the accompanying statements of assets and liabilities, including the investment portfolios, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial positions of BofA Connecticut Municipal Reserves and BofA Massachusetts Municipal Reserves (each a series of BofA Funds Series Trust, hereafter collectively referred to as the "Funds") at August 31, 2015, the results of each of their operations for the year then ended, the changes in each of their net assets for each of the two years in the period then ended and the financial highlights for each of the periods indicated, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as "financial statements") are the responsibility of the Funds' management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at August 31, 2015 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
Boston, Massachusetts
October 21, 2015
27
Federal Income Tax Information (Unaudited) – BofA Money Market Funds
BofA Connecticut Municipal Reserves
The Fund will notify shareholders in January 2016 of amounts for use in preparing 2015 income tax returns.
BofA Massachusetts Municipal Reserves
The Fund will notify shareholders in January 2016 of amounts for use in preparing 2015 income tax returns.
28
Fund Governance
The Trustees serve terms of indefinite duration. The names, addresses and ages of the Trustees and officers of the Funds in the BofA Funds Series Trust, the year each was first elected or appointed to office, their principal business occupations during at least the last five years, the number of Funds overseen by each Trustee and other directorships they hold are shown below. Each officer listed below serves as an officer of each Fund in the BofA Funds Series Trust.
Independent Trustees
Name, Address, and Year of Birth, Position with Funds, Year First Elected or Appointed to Office | Principal Occupation(s) During Past Five Years, Number of Funds in BofA Funds Series Trust Overseen by Trustee, Other Directorships Held | ||||||
Harrison M. Bains (Born 1943) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Trustee (since 2011) | Retired. Oversees 11 Funds. Mercer Funds (9 funds); BG Medicine, Inc. (life sciences). | ||||||
Paul Glasserman (Born 1962) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Trustee (since 2011) | Jack R. Anderson Professor of Business—Columbia Business School, since 2000 (Senior Vice Dean, 2004-2008; Professor, 1995-2000); Visiting Scholar—Federal Reserve Bank of New York, from 2008 to 2012; Consultant to the U.S. Treasury, 2011-2014; Independent consultant to financial firms since 1995. Oversees 11 Funds. | ||||||
William A. Hawkins (Born 1942) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Trustee (since 2005)1 | Managing Director—Overton Partners (financial consulting), August 2010 to present. Oversees 11 Funds. Columbia Funds (127 funds). | ||||||
R. Glenn Hilliard (Born 1943) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Trustee (since 2005)1 | Chairman and Chief Executive Officer—Hilliard Group LLC (investing and consulting), from 2003 through current; Non-Executive Director & Chairman—CNO Financial Group, Inc. (formerly Conseco, Inc.) (insurance), September 2003-May 2011. Oversees 11 Funds. Columbia Funds (127 funds). | ||||||
William J. Kelly (Born 1960) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Trustee (since 2011) | Chief Executive Officer—Chartered Alternative Investment Analyst Association, January 2014 to present. Oversees 11 Funds. | ||||||
Debra Perry (Born 1951) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Trustee (since 2011) | Retired. Managing Member—Perry Consulting LLC (advisory firm), from 2008 through 2014. Oversees 11 Funds. Korn/Ferry International (recruiting); Sanford C. Bernstein Fund, Inc. (18 funds); Board Member—PartnerRE (reinsurance). |
1 Includes service as trustees of Columbia Funds Series Trust, the predecessor trust.
The Statement of Additional Information includes additional information about the Trustees of the Funds and is available, without charge, upon request by calling 888-331-0904. (Institutional Investors, please call 800-353-0828.)
29
Fund Governance (continued)
Officers
Name, Address, and Year of Birth, Position with Funds, Year First Elected or Appointed to Office | Principal Occupation(s) During Past Five Years | ||||||
Michael J. Pelzar (Born 1968) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 President (since 2010) | President, BofA Global Capital Management Group, LLC since May 2010; Managing Director and Head of Product Management of the Advisor from 2007 to 2010. | ||||||
Kenneth B. Crotty (Born 1961) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Vice President (since 2015) Assistant Treasurer (2014-2015) | Chief Operating Officer, BofA Global Capital Management Group, LLC since August 2013; President KBC Consulting 2012-2013; Global Chief Operating Officer of Mercer Investments and President of Mercer Investments US 2006-2012. | ||||||
Jeffrey R. Coleman (Born 1969) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Senior Vice President, Chief Financial Officer, Chief Accounting Officer (since 2010) and Treasurer (since 2009) | Managing Director of Fund Administration and Transfer Agency Oversight of the Advisor since May 2010; Director of Fund Administration of the Advisor since January 2006. | ||||||
Marina Belaya (Born 1967) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Secretary and Chief Legal Officer (since 2013) | Assistant General Counsel, Director, Bank of America since July 2007. | ||||||
James R. Bordewick (Born 1959) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Senior Vice President and Chief Compliance Officer (since 2010) | Chief Compliance Officer of U.S. Trust, Bank of America Private Wealth Management since 2012; Chief Compliance Officer of the Advisor and Managing Director, Bank of America since May 2010. | ||||||
Barry S. Vallan (Born 1969) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Deputy Treasurer (since 2010) and Controller (since 2006) | Director of Fund Administration of the Advisor since May 2010; Vice President—Fund Treasury of the Advisor since October 2004; Vice President—Fund Administration of the Advisor since May 2002. |
30
Fund Governance (continued)
Officers (continued)
Name, Address, and Year of Birth, Position with Funds, Year First Elected or Appointed to Office | Principal Occupation(s) During Past Five Years | ||||||
Patrick Campbell (Born 1957) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Vice President (since 2015) Assistant Treasurer (2010-2015) | Director of Transfer Agency Oversight, BofA Global Capital Management Group, LLC since May 2010. | ||||||
Rana J. Wright (Born 1978) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Assistant Secretary (since 2014) | Assistant General Counsel and Director, Bank of America, and Chief Legal Officer, BofA Global Capital Management Group, LLC, since June 2014; Partner, Reed Smith LLP, 2012 to 2014; Associate, Reed Smith LLP, 2003 to 2011. | ||||||
Nitin Mehra (Born 1977) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Vice President (since 2015) Assistant Treasurer (2010-2015) | Managing Director and Head of Strategy and Product at BofA Global Capital Management Group, LLC since May 2011; Managing Director of Strategy and Product at BofA Global Capital Management Group, LLC from 2010-2011; Director of Product Strategy and Development of the Advisor from 2008-2010. |
31
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Important Information About This Report
Each Fund mails 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 BofA Connecticut Municipal Reserves and BofA Massachusetts 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.
An investment in money market mutual funds is not insured or guaranteed by Bank of America, N.A. or its affiliates, or by the Federal Deposit Insurance Corporation or any other government agency. Although money market mutual funds seek to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in money market mutual funds.
BofA® 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
BofA Global Capital Management
100 Federal Street
Boston, MA 02110
Questions or comments regarding your account or investment in the Funds should be directed to:
Boston Financial Data Services
P.O. Box 8723
Boston, MA 02266-8723
Retail Investors: 888.331.0904
Institutional Investors: 800.353.0828
BofA Connecticut Municipal Reserves
BofA Massachusetts Municipal Reserves
Annual Report, August 31, 2015
© 2015 Bank of America Corporation. All rights reserved.
BofA Distributors, Inc.
100 Federal Street, Boston, MA 02110
888.331.0904 (Institutional Investors: 800.353.0828) www.bofacapital.com
AR-CTMA-1015
BofA Funds
Annual Report
August 31, 2015
• BofA Money Market Reserves
NOT FDIC INSURED | May Lose Value | ||||||
NOT BANK ISSUED | No Bank Guarantee |
Table of Contents
Understanding Your Expenses | 1 | ||||||
Investment Portfolio | 2 | ||||||
Statement of Assets and Liabilities | 12 | ||||||
Statement of Operations | 14 | ||||||
Statement of Changes in Net Assets | 15 | ||||||
Financial Highlights | 17 | ||||||
Notes to Financial Statements | 23 | ||||||
Report of Independent Registered Public Accounting Firm | 31 | ||||||
Federal Income Tax Information | 32 | ||||||
Fund Governance | 33 | ||||||
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.
President's Message
To Our Valued Shareholders:
A year ago the consensus within the financial community was that the interest rate environment would soon be more hospitable to money market fund investors as a strengthening U.S. economy finally moved the Federal Reserve ("the Fed") to raise short-term interest rates. That rate hike has yet to materialize, so for liquidity investors, the most important news out of Washington has come not from the Fed, but from the U.S. Securities and Exchange Commission ("SEC"), which adopted sweeping changes to the regulations governing U.S. money market funds.
To take effect in October 2016, the amendments to Rule 2a-7 under the Investment Company Act of 1940 include two important reforms that are prompting investors to reevaluate their liquidity investment strategies:
• Institutional prime and institutional municipal money market funds must "float" their net asset values ("NAVs"), which means the value of the funds' shares would be based on the market value of their underlying securities. Only government funds and funds serving retail investors—defined as "natural persons"—would retain their stable, $1-per-share NAVs.
• The boards of trustees of non-government money market funds may impose a temporary liquidity fee of up to 2% of the value of a redemption or to suspend or "gate" redemptions temporarily should a money market fund's level of weekly liquid assets fall below 30% of its total assets.
These changes are part of a multi-year effort on the part of the SEC to make money market funds more resilient during market crises, when heavy redemption activity can exert strong downward pressure on funds' NAVs.
After extensive analysis, we have concluded that the impact of the rule changes will be less significant than many investors first believed. With regard to floating NAV funds, for example, fund managers still will go to great lengths to maintain the $1-per-share NAV after the floating NAV rule takes effect. If there is any movement around the $1 mark, that variation likely would be very limited under normal market conditions because of the preponderance of short-term, high-quality securities in money market funds. As for liquidity fees and redemption gates, these measures would be a last resort for fund managers because of the reputational damage money market fund companies would incur were they to impose these measures.
Recognizing the importance of money market fund reform to our shareholders, BofA Global Capital Management has launched a series of whitepapers analyzing the potential impact of the rule changes on clients' liquidity-management programs. These papers are available at www.bofacapital.com. Our preparations for the implementation of the reforms are proceeding, and we anticipate no problems meeting the October 2016 compliance deadline.
Shifting back to the macroeconomic environment, the Fed held the benchmark federal funds rate steady in September, but we believe the drop in the U.S. unemployment rate and steady economic growth should allow the central bank to begin increasing the federal funds rate from the current 0% to .25% rate—in the near future. This, in our view, will mark the beginning of a gradual increase in rates that over time should translate into potentially more attractive yields for money market fund investors. We are positioning the BofA Funds to capture the potential benefits of a rising-rate environment.
Given the complexity of modern financial markets and the ever-present threat of unforeseen investment challenges, the managers of the BofA Funds will continue to employ a conservative investment process designed to achieve your most important goals: principal protection, a high degree of liquidity and competitive risk-adjusted yields. We believe our conservative investment posture; our focus on the management of liquidity investments; and the resources available to us as part of one of the world's largest financial institutions position BofA Global Capital Management to help you reach your liquidity objectives.
On behalf of everyone at BofA Global Capital Management, I thank you for the opportunity to have served you over the past year. We appreciate your business, and we look forward to working with you in the months and years ahead.
Sincerely,
Michael Pelzar
President, BofA Global Capital Management
ARQ5HMRY
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 $1,000. Please refer to the Fund's prospectus for additional details.
3/1/15 – 8/31/15 (Unaudited)
Account value at the beginning of the period ($) | 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 | 1,024.00 | 1.21 | 1.22 | 0.24 | ||||||||||||||||||||||||
Capital Class Shares | 1,000.00 | 1,000.00 | 1,000.40 | 1,024.40 | 0.81 | 0.82 | 0.16 | ||||||||||||||||||||||||
Institutional Capital Shares | 1,000.00 | 1,000.00 | 1,000.40 | 1,024.40 | 0.81 | 0.82 | 0.16 | ||||||||||||||||||||||||
Institutional Class Shares | 1,000.00 | 1,000.00 | 1,000.20 | 1,024.20 | 1.01 | 1.02 | 0.20 | ||||||||||||||||||||||||
Liquidity Class Shares | 1,000.00 | 1,000.00 | 1,000.00 | 1,024.00 | 1.21 | 1.22 | 0.24 | ||||||||||||||||||||||||
Trust Class Shares | 1,000.00 | 1,000.00 | 1,000.00 | 1,024.00 | 1.21 | 1.22 | 0.24 |
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
August 31, 2015
Certificates of Deposit – 32.1% | |||||||||||
Par ($) | Value ($) | ||||||||||
Bank of Montreal Chicago | |||||||||||
0.190% 09/15/15 | 185,000,000 | 185,000,000 | |||||||||
0.250% 09/16/15 | 129,000,000 | 129,000,000 | |||||||||
0.282% 11/04/15 (09/04/15) (a)(b) | 100,000,000 | 100,000,000 | |||||||||
0.282% 12/04/15 (09/04/15) (a)(b) | 95,074,000 | 95,074,000 | |||||||||
0.365% 01/22/16 (09/22/15) (a)(b) | 150,000,000 | 150,000,000 | |||||||||
Bank of Nova Scotia Houston | |||||||||||
0.260% 09/03/15 (09/01/15) (a)(b) | 154,000,000 | 154,000,000 | |||||||||
0.270% 10/07/15 (09/01/15) (a)(b) | 25,000,000 | 25,000,000 | |||||||||
0.270% 11/02/15 (09/01/15) (a)(b) | 25,000,000 | 25,000,000 | |||||||||
0.304% 01/07/16 (09/08/15) (a)(b) | 19,419,000 | 19,415,726 | |||||||||
0.350% 01/07/16 (09/01/15) (a)(b) | 79,000,000 | 79,000,000 | |||||||||
0.360% 02/11/16 (09/01/15) (a)(b) | 100,000,000 | 100,000,000 | |||||||||
Bank of Tokyo-Mitsubishi UFJ Ltd./NY | |||||||||||
0.180% 09/15/15 | 139,000,000 | 139,000,000 | |||||||||
0.250% 09/08/15 | 45,000,000 | 45,000,000 | |||||||||
0.280% 09/08/15 | 50,000,000 | 50,000,582 | |||||||||
0.290% 10/05/15 | 32,000,000 | 32,000,000 | |||||||||
0.318% 09/01/15 | 56,400,000 | 56,400,000 | |||||||||
0.328% 11/02/15 (09/01/15) (a)(b) | 75,000,000 | 75,000,000 | |||||||||
0.388% 02/01/16 (09/01/15) (a)(b) | 125,500,000 | 125,500,000 | |||||||||
0.464% 12/04/15 (09/04/15) (a)(b) | 4,788,000 | 4,789,110 | |||||||||
Credit Industriel et Commercial NY | |||||||||||
0.250% 09/01/15 | 81,000,000 | 81,000,000 | |||||||||
0.380% 11/05/15 | 26,706,000 | 26,709,838 | |||||||||
Credit Suisse NY | |||||||||||
0.230% 09/01/15 | 40,000,000 | 40,000,000 | |||||||||
0.230% 09/04/15 | 60,000,000 | 60,000,000 | |||||||||
0.300% 09/25/15 | 50,000,000 | 50,000,000 | |||||||||
0.580% 09/18/15 | 2,727,000 | 2,727,346 | |||||||||
DNB NOR Bank ASA NY | |||||||||||
0.130% 09/02/15 | 537,000,000 | 537,000,000 | |||||||||
HSBC Bank USA NA | |||||||||||
0.285% 09/16/15 | 50,000,000 | 50,000,000 | |||||||||
0.301% 11/06/15 (09/08/15) (a)(b) | 100,000,000 | 100,000,000 |
Par ($) | Value ($) | ||||||||||
0.315% 09/15/15 | 75,000,000 | 75,000,000 | |||||||||
0.328% 12/02/15 (09/02/15) (a)(b) | 67,000,000 | 67,000,000 | |||||||||
0.340% 11/09/15 | 50,000,000 | 50,000,000 | |||||||||
0.340% 11/12/15 | 18,000,000 | 18,000,000 | |||||||||
Mizuho Corporate Bank Ltd./NY | |||||||||||
0.270% 09/15/15 | 115,000,000 | 115,000,000 | |||||||||
0.290% 10/15/15 | 96,500,000 | 96,500,000 | |||||||||
0.300% 09/14/15 | 4,000,000 | 4,000,115 | |||||||||
0.300% 10/26/15 | 140,000,000 | 140,000,000 | |||||||||
National Bank of Canada NY | |||||||||||
0.415% 09/11/15 | 7,202,000 | 7,202,229 | |||||||||
Natixis NY | |||||||||||
0.240% 09/04/15 | 72,500,000 | 72,500,000 | |||||||||
0.240% 09/10/15 | 100,000,000 | 100,000,000 | |||||||||
Nordea Bank Finland PLC NY | |||||||||||
0.245% 09/17/15 | 15,129,000 | 15,128,933 | |||||||||
0.295% 10/29/15 | 38,000,000 | 37,999,694 | |||||||||
State Street Bank & Trust | |||||||||||
0.193% 01/11/16 (09/11/15) (a)(b) | 64,227,000 | 64,227,000 | |||||||||
0.199% 12/14/15 (09/15/15) (a)(b) | 75,000,000 | 75,000,000 | |||||||||
0.331% 01/06/16 (09/08/15) (a)(b) | 30,000,000 | 30,000,000 | |||||||||
Sumitomo Mitsui Banking Corp./NY | |||||||||||
0.190% 09/09/15 | 125,000,000 | 125,000,000 | |||||||||
0.280% 10/02/15 | 81,460,000 | 81,459,986 | |||||||||
0.290% 10/01/15 | 20,000,000 | 20,000,000 | |||||||||
0.320% 09/11/15 | 10,333,000 | 10,333,286 | |||||||||
0.343% 11/13/15 (09/14/15) (a)(b) | 68,275,000 | 68,275,000 | |||||||||
0.344% 10/14/15 (09/14/15) (a)(b) | 75,000,000 | 75,000,000 | |||||||||
0.419% 02/25/16 (09/25/15) (a)(b) | 50,000,000 | 50,000,000 | |||||||||
Svenska Handelsbanken/NY | |||||||||||
0.205% 09/01/15 | 74,700,000 | 74,700,000 | |||||||||
0.215% 09/10/15 | 12,000,000 | 12,000,045 | |||||||||
0.215% 09/16/15 | 92,591,000 | 92,591,576 | |||||||||
0.260% 09/16/15 | 120,000,000 | 120,000,250 | |||||||||
Toronto-Dominion Bank NY | |||||||||||
0.220% 09/17/15 | 48,000,000 | 48,000,000 | |||||||||
0.259% 11/02/15 (09/02/15) (a)(b) | 50,000,000 | 50,000,000 |
See Accompanying Notes to Financial Statements.
2
BofA Money Market Reserves
August 31, 2015
Certificates of Deposit (continued) | |||||||||||
Par ($) | Value ($) | ||||||||||
0.281% 10/06/15 (09/08/15) (a)(b) | 3,730,000 | 3,730,078 | |||||||||
0.340% 12/16/15 | 121,110,000 | 121,110,000 | |||||||||
0.343% 01/07/16 (09/08/15) (a)(b) | 149,046,000 | 149,046,000 | |||||||||
UBS AG Stamford, CT | |||||||||||
0.390% 01/15/16 (09/24/15) (a)(b) | 103,000,000 | 103,000,000 | |||||||||
Wells Fargo Bank N.A. | |||||||||||
0.270% 10/08/15 (09/01/15) (a)(b) | 65,000,000 | 65,000,000 | |||||||||
0.274% 10/07/15 (09/08/15) (a)(b) | 60,000,000 | 60,000,000 | |||||||||
0.274% 11/12/15 (09/08/15) (a)(b) | 84,000,000 | 84,000,000 | |||||||||
0.278% 10/08/15 (09/17/15) (a)(b) | 60,000,000 | 60,000,000 | |||||||||
0.340% 01/06/16 (09/01/15) (a)(b) | 29,000,000 | 29,000,000 | |||||||||
0.340% 02/01/16 (09/01/15) (a)(b) | 133,000,000 | 133,000,000 | |||||||||
0.360% 02/18/16 (09/01/15) (a)(b) | 43,000,000 | 43,000,000 | |||||||||
Total Certificates of Deposit (cost of $5,182,420,794) | 5,182,420,794 | ||||||||||
Commercial Paper – 17.1% | |||||||||||
ANZ National International Ltd. | |||||||||||
0.230% 09/03/15 (c)(d) | 1,086,000 | 1,085,986 | |||||||||
0.269% 11/02/15 (09/02/15) (a)(b)(c) | 52,000,000 | 52,000,000 | |||||||||
0.272% 11/09/15 (09/09/15) (a)(b)(c) | 6,997,000 | 6,997,000 | |||||||||
0.358% 12/29/15 (09/29/15) (a)(b)(c) | 87,572,000 | 87,572,000 | |||||||||
Bank Nederlandse Gemeenten NV | |||||||||||
0.260% 09/17/15 (c)(d) | 33,387,000 | 33,383,142 | |||||||||
0.277% 12/10/15 (09/10/15) (a)(b)(c) | 52,896,000 | 52,895,269 | |||||||||
0.280% 10/13/15 (c)(d) | 60,000,000 | 59,980,400 | |||||||||
0.290% 10/13/15 (c)(d) | 61,710,000 | 61,689,122 | |||||||||
0.360% 12/07/15 (c)(d) | 2,800,000 | 2,797,284 | |||||||||
Bank of Nova Scotia (The) | |||||||||||
0.279% 09/04/15 (c) | 162,000,000 | 162,000,000 | |||||||||
Bedford Row Funding Corp. | |||||||||||
0.299% 10/01/15 (09/01/15) (a)(b)(c)(e) | 3,000,000 | 3,000,029 |
Par ($) | Value ($) | ||||||||||
BNZ International Funding Ltd. | |||||||||||
0.270% 09/11/15 (c)(d) | 54,000,000 | 53,995,950 | |||||||||
0.350% 01/05/16 (09/08/15) (a)(b)(c) | 67,868,000 | 67,868,000 | |||||||||
Caisse Centrale Desjardins du Quebec | |||||||||||
0.220% 09/14/15 (c)(d) | 45,784,000 | 45,780,363 | |||||||||
Caisse des Depots et Consignations | |||||||||||
0.210% 09/16/15 (c)(d) | 75,000,000 | 74,993,438 | |||||||||
0.210% 09/17/15 (c)(d) | 54,381,000 | 54,375,924 | |||||||||
Collateralized Commercial Paper Co. LLC | |||||||||||
0.370% 12/01/15 (d)(e) | 25,000,000 | 24,976,618 | |||||||||
0.400% 12/14/15 (d)(e) | 127,000,000 | 126,853,245 | |||||||||
0.520% 02/22/16 (d)(e) | 62,000,000 | 61,844,173 | |||||||||
Collateralized Commercial Paper II Co. LLC | |||||||||||
0.424% 01/14/16 (09/14/15) (a)(b)(c)(e) | 2,416,000 | 2,416,286 | |||||||||
Danaher Corp. | |||||||||||
0.160% 09/04/15 (c)(d) | 58,652,000 | 58,651,218 | |||||||||
0.200% 09/03/15 (c)(d) | 52,078,000 | 52,077,421 | |||||||||
Erste Abwicklungsanstalt | |||||||||||
0.190% 09/08/15 (c)(d) | 74,000,000 | 73,997,266 | |||||||||
0.210% 09/10/15 (c)(d) | 61,165,000 | 61,161,789 | |||||||||
0.320% 11/23/15 (c)(d) | 29,673,000 | 29,651,108 | |||||||||
HSBC Bank PLC | |||||||||||
0.272% 10/09/15 (09/09/15) (a)(b)(c) | 70,000,000 | 70,000,000 | |||||||||
JP Morgan Securities LLC | |||||||||||
0.351% 11/10/15 (09/10/15) (a)(b) | 22,169,000 | 22,170,431 | |||||||||
0.397% 02/29/16 (09/29/15) (a)(b) | 25,000,000 | 25,000,000 | |||||||||
KFW | |||||||||||
0.110% 09/01/15 (c) | 58,054,000 | 58,054,000 | |||||||||
Mizuho Corporate Bank Ltd. | |||||||||||
0.280% 09/21/15 (c)(d) | 13,853,000 | 13,850,845 | |||||||||
National Bank of Canada | |||||||||||
0.350% 11/23/15 (c)(d) | 1,100,000 | 1,099,112 | |||||||||
0.363% 12/03/15 (09/08/15) (a)(b)(c) | 98,681,000 | 98,681,000 | |||||||||
Nederlandse Waterschaps | |||||||||||
0.235% 09/04/15 (c)(d) | 50,000,000 | 49,999,021 | |||||||||
0.290% 10/26/15 (c)(d) | 44,590,000 | 44,570,244 | |||||||||
0.310% 11/30/15 (c)(d) | 62,750,000 | 62,701,369 | |||||||||
0.330% 12/07/15 (c)(d) | 149,659,000 | 149,525,928 |
See Accompanying Notes to Financial Statements.
3
BofA Money Market Reserves
August 31, 2015
Commercial Paper (continued) | |||||||||||
Par ($) | Value ($) | ||||||||||
NRW. Bank | |||||||||||
0.185% 09/14/15 (c)(d) | 95,076,000 | 95,069,648 | |||||||||
Rabobank Nederland NV NY | |||||||||||
0.300% 10/23/15 (d) | 37,848,000 | 37,831,599 | |||||||||
Toyota Credit Puerto Rico | |||||||||||
0.230% 09/11/15 (d) | 28,241,000 | 28,239,196 | |||||||||
0.230% 09/15/15 (d) | 14,121,000 | 14,119,737 | |||||||||
Toyota Motor Credit Corp. | |||||||||||
0.200% 09/14/15 (d) | 77,109,000 | 77,103,431 | |||||||||
0.269% 12/07/15 (09/02/15) (a)(b) | 138,000,000 | 138,000,000 | |||||||||
0.282% 11/16/15 (09/21/15) (a)(b) | 70,746,000 | 70,746,000 | |||||||||
0.368% 02/29/16 (09/28/15) (a)(b) | 90,000,000 | 90,000,000 | |||||||||
0.369% 02/23/16 (09/28/15) (a)(b) | 73,000,000 | 73,000,000 | |||||||||
Westpac Securities NZ Ltd. | |||||||||||
0.281% 12/11/15 (09/11/15) (a)(b)(c) | 99,245,000 | 99,245,000 | |||||||||
0.290% 12/14/15 (09/14/15) (a)(b)(c) | 82,595,000 | 82,595,000 | |||||||||
0.350% 12/11/15 (c)(d) | 24,339,000 | 24,315,101 | |||||||||
0.361% 02/08/16 (09/08/15) (a)(b)(c) | 19,879,000 | 19,878,269 | |||||||||
Total Commercial Paper (cost of $2,757,837,962) | 2,757,837,962 | ||||||||||
Asset-Backed Commercial Paper – 15.2% | |||||||||||
Albion Capital Corp. | |||||||||||
0.150% 09/04/15 (c)(d) | 83,281,000 | 83,279,959 | |||||||||
0.230% 09/16/15 (c)(d) | 28,769,000 | 28,766,243 | |||||||||
Chariot Funding LLC | |||||||||||
0.330% 11/30/15 (c)(d) | 42,435,000 | 42,399,991 | |||||||||
0.430% 12/29/15 (c)(d) | 26,829,000 | 26,790,866 | |||||||||
Charta LLC | |||||||||||
0.220% 09/01/15 (c) | 5,096,000 | 5,096,000 | |||||||||
Ciesco LLC | |||||||||||
0.250% 09/01/15 (c) | 25,017,000 | 25,017,000 | |||||||||
CRC Funding LLC | |||||||||||
0.200% 09/14/15 (c)(d) | 20,000,000 | 19,998,556 | |||||||||
Fairway Finance Corp. | |||||||||||
0.250% 09/14/15 (c)(d) | 32,208,000 | 32,205,092 | |||||||||
0.280% 09/03/15 (c)(d) | 24,423,000 | 24,422,620 | |||||||||
0.283% 11/20/15 (09/21/15) (a)(b)(c) | 23,900,000 | 23,899,469 |
Par ($) | Value ($) | ||||||||||
0.311% 01/08/16 (09/08/15) (a)(b)(c) | 28,735,000 | 28,731,952 | |||||||||
0.371% 02/11/16 (09/11/15) (a)(b)(c) | 41,673,000 | 41,673,000 | |||||||||
Jupiter Securitization Co. LLC | |||||||||||
0.420% 12/23/15 (c)(d) | 15,561,000 | 15,540,485 | |||||||||
0.430% 12/29/15 (c)(d) | 26,829,000 | 26,790,866 | |||||||||
Kells Funding LLC | |||||||||||
0.210% 09/15/15 (c)(d) | 50,000,000 | 49,995,917 | |||||||||
0.250% 09/04/15 (c)(d) | 24,428,000 | 24,427,491 | |||||||||
0.287% 09/28/15 (c)(d) | 75,000,000 | 74,999,418 | |||||||||
0.287% 09/30/15 (09/20/15) (a)(b)(c) | 120,000,000 | 119,998,979 | |||||||||
0.300% 10/29/15 (c)(d) | 29,234,000 | 29,233,227 | |||||||||
0.330% 12/11/15 (c)(d) | 59,792,000 | 59,736,643 | |||||||||
Liberty Street Funding LLC | |||||||||||
0.300% 10/20/15 (c)(d) | 42,867,000 | 42,849,496 | |||||||||
0.300% 10/26/15 (c)(d) | 34,722,000 | 34,706,086 | |||||||||
0.340% 11/12/15 (c)(d) | 15,406,000 | 15,395,524 | |||||||||
0.380% 12/03/15 (c)(d) | 22,167,000 | 22,145,239 | |||||||||
0.380% 12/07/15 (c)(d) | 19,151,000 | 19,131,392 | |||||||||
0.380% 12/15/15 (c)(d) | 46,000,000 | 45,949,017 | |||||||||
0.380% 12/21/15 (c)(d) | 73,922,000 | 73,835,388 | |||||||||
0.380% 12/22/15 (c)(d) | 50,000,000 | 49,940,889 | |||||||||
0.390% 11/30/15 (c)(d) | 45,164,000 | 45,119,965 | |||||||||
Manhattan Asset Funding Co. LLC | |||||||||||
0.210% 09/01/15 | 14,897,000 | 14,897,000 | |||||||||
0.210% 09/02/15 (d) | 8,813,000 | 8,812,949 | |||||||||
0.210% 09/09/15 (d) | 22,042,000 | 22,040,971 | |||||||||
0.210% 09/10/15 (d) | 11,419,000 | 11,418,401 | |||||||||
0.220% 09/15/15 (d) | 42,480,000 | 42,476,366 | |||||||||
0.260% 09/03/15 (d) | 27,527,000 | 27,526,602 | |||||||||
0.260% 09/08/15 (d) | 28,041,000 | 28,039,582 | |||||||||
MetLife Short Term Funding LLC | |||||||||||
0.170% 09/09/15 (c)(d) | 15,826,000 | 15,825,402 | |||||||||
Mont Blanc Capital Corp. | |||||||||||
0.250% 09/16/15 (c)(d) | 36,273,000 | 36,269,222 | |||||||||
0.320% 11/13/15 (c)(d) | 16,770,000 | 16,759,118 | |||||||||
Old Line Funding LLC | |||||||||||
0.288% 11/16/15 (09/16/15) (a)(b)(c) | 47,000,000 | 47,000,000 | |||||||||
0.288% 11/17/15 (09/17/15) (a)(b)(c) | 54,000,000 | 54,000,000 | |||||||||
0.366% 01/04/16 (09/24/15) (a)(b)(c) | 32,439,000 | 32,439,000 | |||||||||
0.370% 01/05/16 (09/07/15) (a)(b)(c) | 3,169,000 | 3,168,797 |
See Accompanying Notes to Financial Statements.
4
BofA Money Market Reserves
August 31, 2015
Asset-Backed Commercial Paper (continued) | |||||||||||
Par ($) | Value ($) | ||||||||||
0.390% 02/01/16 (09/01/15) (a)(b)(c) | 98,100,000 | 98,100,000 | |||||||||
0.391% 01/04/16 (09/16/15) (a)(b)(c) | 13,722,000 | 13,720,823 | |||||||||
0.398% 02/08/16 (09/08/15) (a)(b)(c) | 131,000,000 | 131,000,000 | |||||||||
0.410% 02/16/16 (09/16/15) (a)(b)(c) | 30,000,000 | 30,000,000 | |||||||||
0.520% 02/25/16 (c)(d) | 7,214,000 | 7,195,556 | |||||||||
Regency Markets No. 1 LLC | |||||||||||
0.130% 09/04/15 (c)(d) | 82,694,000 | 82,693,104 | |||||||||
Thunder Bay Funding LLC | |||||||||||
0.280% 09/21/15 (c)(d) | 43,822,000 | 43,815,183 | |||||||||
0.398% 12/28/15 (09/09/15) (a)(b)(c) | 75,309,000 | 75,309,000 | |||||||||
0.400% 12/01/15 (c)(d) | 16,259,000 | 16,242,560 | |||||||||
0.460% 01/22/16 (c)(d) | 24,780,000 | 24,734,721 | |||||||||
Versailles Commercial Paper LLC | |||||||||||
0.260% 09/11/15 (c)(d) | 23,285,000 | 23,283,318 | |||||||||
0.300% 10/28/15 (c)(d) | 54,637,000 | 54,611,048 | |||||||||
0.310% 11/13/15 (c)(d) | 41,924,000 | 41,897,646 | |||||||||
0.320% 11/09/15 (c)(d) | 41,152,000 | 41,126,760 | |||||||||
Victory Receivables Corp. | |||||||||||
0.210% 09/09/15 (c)(d) | 60,400,000 | 60,397,181 | |||||||||
0.260% 10/02/15 (c)(d) | 2,067,000 | 2,066,537 | |||||||||
Working Capital Management Co. | |||||||||||
0.200% 09/08/15 (c)(d) | 46,365,000 | 46,363,197 | |||||||||
0.200% 09/09/15 (c)(d) | 45,464,000 | 45,461,979 | |||||||||
0.200% 09/11/15 (c)(d) | 14,635,000 | 14,634,187 | |||||||||
0.210% 09/03/15 (c)(d) | 29,188,000 | 29,187,660 | |||||||||
0.210% 09/04/15 (c)(d) | 56,270,000 | 56,269,015 | |||||||||
0.230% 09/02/15 (c)(d) | 25,192,000 | 25,191,839 | |||||||||
Total Asset-Backed Commercial Paper (cost of $2,456,051,494) | 2,456,051,494 | ||||||||||
Time Deposits – 12.0% | |||||||||||
Bank of New York | |||||||||||
0.070% 09/01/15 | 96,000,000 | 96,000,000 | |||||||||
Credit Agricole SA | |||||||||||
0.070% 09/01/15 | 500,491,000 | 500,491,000 | |||||||||
Natixis Paris | |||||||||||
0.070% 09/01/15 | 121,525,000 | 121,525,000 | |||||||||
Skandinaviska Enskilda Banken AB | |||||||||||
0.070% 09/01/15 | 422,300,000 | 422,300,000 |
Par ($) | Value ($) | ||||||||||
Swedbank AB | |||||||||||
0.070% 09/01/15 | 800,000,000 | 800,000,000 | |||||||||
Total Time Deposits (cost of $1,940,316,000) | 1,940,316,000 | ||||||||||
Corporate Bonds – 1.5% | |||||||||||
ANZ National International Ltd. | |||||||||||
1.850% 10/15/15 (c) | 15,585,000 | 15,612,851 | |||||||||
Bank of Montreal | |||||||||||
0.532% 09/24/15 | 39,816,000 | 39,821,862 | |||||||||
0.800% 11/06/15 | 1,507,000 | 1,508,141 | |||||||||
Bank of Nova Scotia (The) | |||||||||||
0.750% 10/09/15 | 18,272,000 | 18,280,015 | |||||||||
2.050% 10/07/15 | 4,522,000 | 4,529,528 | |||||||||
Bank of Tokyo-Mitsubishi UFJ Ltd. | |||||||||||
2.450% 09/11/15 (c) | 27,529,000 | 27,544,332 | |||||||||
Caisse Centrale Desjardins du Quebec | |||||||||||
2.650% 09/16/15 (c) | 9,869,000 | 9,878,114 | |||||||||
Canadian Imperial Bank of Commerce | |||||||||||
0.900% 10/01/15 | 12,283,000 | 12,287,707 | |||||||||
2.350% 12/11/15 | 23,879,000 | 24,007,408 | |||||||||
Cooperatieve Centrale Raiffeisen-Boerenleenbank BA | |||||||||||
2.125% 10/13/15 | 4,583,000 | 4,592,412 | |||||||||
National Australia Bank Ltd. | |||||||||||
2.750% 09/28/15 (c) | 22,186,000 | 22,224,738 | |||||||||
Royal Bank of Canada | |||||||||||
0.506% 12/16/15 (09/16/15) (a)(b) | 52,932,000 | 52,958,651 | |||||||||
0.800% 10/30/15 | 13,925,000 | 13,935,239 | |||||||||
Total Corporate Bonds (cost of $247,180,998) | 247,180,998 | ||||||||||
Municipal Bonds (a)(f) – 1.0% | |||||||||||
Colorado – 0.1% | |||||||||||
CO Housing & Finance Authority | |||||||||||
Multi-Family: Series 2004 A1, SPA: FHLB 0.120% 10/01/34 (09/02/15) | 7,345,000 | 7,345,000 | |||||||||
Series 2008 C1, SPA: FHLB 0.100% 10/01/38 (09/02/15) | 3,315,000 | 3,315,000 |
See Accompanying Notes to Financial Statements.
5
BofA Money Market Reserves
August 31, 2015
Municipal Bonds (a)(f) (continued) | |||||||||||
Par ($) | Value ($) | ||||||||||
Series 2005 B-1, SPA: FHLB 0.150% 04/01/40 (09/02/15) | 4,730,000 | 4,730,000 | |||||||||
Colorado Total | 15,390,000 | ||||||||||
Illinois – 0.0% | |||||||||||
IL University of Illinois | |||||||||||
Series 2014 C LOC: Northern Trust Company 0.130% 04/01/44 (09/03/15) | 4,570,000 | 4,570,000 | |||||||||
Illinois Total | 4,570,000 | ||||||||||
Iowa – 0.1% | |||||||||||
IA Finance Authority | |||||||||||
Series 2004 B, AMT, SPA: FHLB 0.030% 07/01/34 (09/03/15) | 4,060,000 | 4,060,000 | |||||||||
Series 2007 C, SPA: FHLB 0.170% 07/01/37 (09/03/15) | 540,000 | 540,000 | |||||||||
Series 2007 G, SPA: FHLB 0.150% 01/01/38 (09/03/15) | 430,000 | 430,000 | |||||||||
Series 2007, SPA: FHLB 0.150% 01/01/39 (09/03/15) | 2,770,000 | 2,770,000 | |||||||||
Series 2009 G, SPA: FHLB 0.170% 01/01/39 (09/03/15) | 2,555,000 | 2,555,000 | |||||||||
Iowa Total | 10,355,000 | ||||||||||
Massachusetts – 0.0% | |||||||||||
MA Simmons College | |||||||||||
Series 2008, LOC: TD Bank N.A. 0.140% 10/01/22 (09/03/15) | 4,150,000 | 4,150,000 | |||||||||
Massachusetts Total | 4,150,000 |
Par ($) | Value ($) | ||||||||||
Michigan – 0.2% | |||||||||||
MI Kent Hospital Finance Authority | |||||||||||
Spectrum Health, Series 2008 C, LOC: Bank of New York 0.010% 01/15/26 (09/02/15) | 37,925,000 | 37,925,000 | |||||||||
Michigan Total | 37,925,000 | ||||||||||
New Jersey – 0.1% | |||||||||||
NJ North Hudson Sewerage Authority | |||||||||||
Series 2012 LOC: TD Bank N.A. 0.120% 06/01/44 (09/03/15) | 9,750,000 | 9,750,000 | |||||||||
New Jersey Total | 9,750,000 | ||||||||||
New York – 0.3% | |||||||||||
NY Housing Finance Agency | |||||||||||
Series 2015 B LOC: Landesbank Hessen-Thüringen: 0.080% 11/01/44 (09/02/15) | 25,765,000 | 25,765,000 | |||||||||
West 60th Realty LLC, Series 2014 B1 LOC: Manufacturers & Traders: 0.220% 05/01/46 (09/02/15) | 6,475,000 | 6,475,000 | |||||||||
NY RBC Municipal Products, Inc. Trust | |||||||||||
Series 2014 E-51, LOC: Royal Bank of Canada 0.300% 07/01/17 (09/03/15) (c) | 10,000,000 | 10,000,000 | |||||||||
New York Total | 42,240,000 | ||||||||||
Pennsylvania – 0.1% | |||||||||||
PA RBC Municipal Products, Inc. Trust | |||||||||||
Series 2014 E-52, LOC: Royal Bank of Canada 0.300% 07/01/17 (09/03/15) (c) | 25,000,000 | 25,000,000 | |||||||||
Pennsylvania Total | 25,000,000 |
See Accompanying Notes to Financial Statements.
6
BofA Money Market Reserves
August 31, 2015
Municipal Bonds (a)(f) (continued) | |||||||||||
Par ($) | Value ($) | ||||||||||
Wisconsin – 0.1% | |||||||||||
WI Housing & Economic Development Authority | |||||||||||
Series 2005 E, SPA: BMO Harris Bank N.A. 0.160% 03/01/36 (09/02/15) | 3,310,000 | 3,310,000 | |||||||||
Series 2006 B, SPA: FHLB 0.120% 09/01/37 (09/03/15) | 3,660,000 | 3,660,000 | |||||||||
Series 2008 B SPA: BMO Harris Bank N.A. 0.130% 03/01/33 (09/02/15) | 1,960,000 | 1,960,000 | |||||||||
Wisconsin Total | 8,930,000 | ||||||||||
Total Municipal Bonds (cost of $158,310,000) | 158,310,000 | ||||||||||
Government & Agency Obligations – 0.3% | |||||||||||
U.S. Government Agency – 0.3% | |||||||||||
Federal Farm Credit Bank | |||||||||||
0.200% 01/13/16 (09/01/15) (a)(b) | 57,730,000 | 57,728,929 | |||||||||
U.S. Government Agency Total | 57,728,929 | ||||||||||
Total Government & Agency Obligations (cost of $57,728,929) | 57,728,929 | ||||||||||
Closed-End Investment Company – 0.1% | |||||||||||
Other – 0.1% | |||||||||||
Nuveen Municipal Opportunity Fund, Inc. | |||||||||||
Series 2010, AMT, LIQ FAC: Citibank N.A. 0.110% 12/01/40 (09/03/15) (a)(b)(c) | 9,100,000 | 9,100,000 | |||||||||
Other Total | 9,100,000 | ||||||||||
Total Closed-End Investment Company (cost of $9,100,000) | 9,100,000 | ||||||||||
Repurchase Agreements – 20.7% | |||||||||||
Joint Repurchase Agreement Treasury Account, dated 08/31/15, due 09/01/15 (repurchase proceeds $320,155,094) (g) | 320,154,000 | 320,154,000 |
Par ($) | Value ($) | ||||||||||
Joint Repurchase Agreement Treasury and Agency Account, dated 08/31/15, due 09/01/15 (repurchase proceeds $798,539,127) (g) | 798,536,000 | 798,536,000 | |||||||||
Repurchase agreement with ABN Amro NV, dated 08/31/15, due 09/01/15 at 0.140%, collateralized by U.S. Treasury obligations and U.S. Government Agency obligations with various maturities to 04/20/45, market value $64,901,092 (repurchase proceeds $63,628,247) | 63,628,000 | 63,628,000 | |||||||||
Repurchase agreement with ABN Amro NV, dated 08/31/15, due 09/01/15 at 0.150%, collateralized by U.S. Government Agency obligations and corporate bonds with various maturities to 06/01/44, market value $100,031,775 (repurchase proceeds $95,443,398) | 95,443,000 | 95,443,000 | |||||||||
Repurchase agreement with BNP Paribas Prime Brokerage, Inc., dated 08/31/15, due 09/01/15 at 0.300%, collateralized by common stocks, preferred stocks, a U.S. Treasury obligation and corporate bonds with various maturities to 05/15/43, market value $32,808,503 (repurchase proceeds $29,806,248) | 29,806,000 | 29,806,000 | |||||||||
Repurchase agreement with BNP Paribas Prime Brokerage, Inc., dated 08/31/15, due 10/15/15 at 0.420%, collateralized by common stocks, preferred stocks and corporate bonds with various maturities to 05/15/41, market value $49,931,105 (repurchase proceeds $44,973,599) (b)(h) | 44,950,000 | 44,950,000 |
See Accompanying Notes to Financial Statements.
7
BofA Money Market Reserves
August 31, 2015
Repurchase Agreements (continued) | |||||||||||
Par ($) | Value ($) | ||||||||||
Repurchase agreement with Citigroup Global Markets, Inc., dated 08/31/15, due 09/01/15 at 0.200%, collateralized by common stocks, market value $142,251,256 (repurchase proceeds $130,448,725) | 130,448,000 | 130,448,000 | |||||||||
Repurchase agreement with Goldman Sachs & Co., dated 08/31/15, due 09/01/15 at 0.110%, collateralized by U.S. Government Agency obligations with various maturities to 01/01/45, market value $103,354,877 (repurchase proceeds $101,328,310) | 101,328,000 | 101,328,000 | |||||||||
Repurchase agreement with HSBC Bank PLC, dated 08/17/15, at 0.220%, collateralized by common stocks and U.S. Treasury obligations with various maturities to 08/15/24, market value $207,282,246 (b)(h)(i) | 202,908,000 | 202,908,000 | |||||||||
Repurchase agreement with HSBC Securities USA, Inc., dated 08/03/15, at 0.170%, collateralized by corporate bonds with various maturities to 07/23/25, market value $83,823,091 (b)(h)(i) | 79,827,000 | 79,827,000 | |||||||||
Repurchase agreement with HSBC Securities USA, Inc., dated 08/31/15, due 09/01/15 at 0.130%, collateralized by U.S. Government Agency obligations with various maturities to 03/01/45, market value $42,185,168 (repurchase proceeds $41,358,149) | 41,358,000 | 41,358,000 |
Par ($) | Value ($) | ||||||||||
Repurchase agreement with ING Financial Markets LLC, dated 08/31/15, due 09/01/15 at 0.220%, collateralized by common stocks and an exchange-traded fund, market value $64,786,836 (repurchase proceeds $59,613,364) | 59,613,000 | 59,613,000 | |||||||||
Repurchase agreement with J.P. Morgan Clearing Corp., dated 06/09/15, due 09/04/15 at 0.540%, collateralized by corporate bonds with various maturities to 05/01/32, market value $17,018,673 (repurchase proceeds $15,471,164) | 15,451,000 | 15,451,000 | |||||||||
Repurchase agreement with J.P. Morgan Clearing Corp., dated 06/22/15, due 09/21/15 at 0.530%, collateralized by corporate bonds with various maturities to 05/01/32, market value $16,958,391 (repurchase proceeds $15,420,632) | 15,400,000 | 15,400,000 | |||||||||
Repurchase agreement with J.P. Morgan Clearing Corp., dated 08/17/15, due 11/16/15 at 0.480%, collateralized by exchange-traded funds, market value $27,505,545 (repurchase proceeds $25,030,333) | 25,000,000 | 25,000,000 | |||||||||
Repurchase agreement with J.P. Morgan Clearing Corp., dated 08/31/15, due 10/15/15 at 0.425%, collateralized by exchange-traded funds, market value $99,001,203 (repurchase proceeds $90,047,768) (h) | 90,000,000 | 90,000,000 |
See Accompanying Notes to Financial Statements.
8
BofA Money Market Reserves
August 31, 2015
Repurchase Agreements (continued) | |||||||||||
Par ($) | Value ($) | ||||||||||
Repurchase agreement with J.P. Morgan Clearing Corp., dated 08/31/15, due 11/30/15 at 0.625%, collateralized by a common stock, exchange-traded funds and corporate bonds with various maturities to 12/01/43, market value $238,155,297 (repurchase proceeds $216,870,867) (h) | 216,529,000 | 216,529,000 | |||||||||
Repurchase agreement with Mitsubishi UFJ Securities USA, Inc., dated 08/31/15, due 09/01/15 at 0.130%, collateralized by a U.S. Treasury obligation and U.S. Government Agency obligations with various maturities to 05/01/45, market value $77,881,361 (repurchase proceeds $76,354,276) | 76,354,000 | 76,354,000 | |||||||||
Repurchase agreement with RBC Capital Markets, dated 08/10/15, due 09/10/15 at 0.250%, collateralized by corporate bonds with various maturities to 03/15/25, market value $115,544,951 (repurchase proceeds $110,049,686) (h) | 110,026,000 | 110,026,000 | |||||||||
Repurchase agreement with RBC Capital Markets, dated 08/31/15, due 10/30/15 at 0.250%, collateralized by corporate bonds with various maturities to 08/15/25, market value $198,519,629 (repurchase proceeds $189,143,777) (b)(h) | 189,065,000 | 189,065,000 | |||||||||
Repurchase agreement with RBC Capital Markets, dated 08/31/15, due 10/30/15 at 0.300%, collateralized by common stocks and exchange-traded funds, market value $92,591,086 (repurchase proceeds $84,215,087) (h) | 84,173,000 | 84,173,000 |
Par ($) | Value ($) | ||||||||||
Repurchase agreement with Societe Generale NY, dated 08/31/15, due 09/01/15 at 0.150%, collateralized by U.S. Treasury obligations and U.S. Government Agency obligations with various maturities to 07/01/45, market value $194,703,537 (repurchase proceeds $190,885,795) | 190,885,000 | 190,885,000 | |||||||||
Repurchase agreement with TD Securities USA LLC, dated 08/31/15, due 09/01/15 at 0.130%, collateralized by U.S. Treasury obligations with various maturities to 11/30/20, market value $74,636,776 (repurchase proceeds $73,173,264) | 73,173,000 | 73,173,000 | |||||||||
Repurchase agreement with TD Securities USA LLC, dated 08/31/15, due 09/01/15 at 0.140%, collateralized by corporate bonds with various maturities to 11/21/21, market value $39,477,004 (repurchase proceeds $37,597,146) | 37,597,000 | 37,597,000 | |||||||||
Repurchase agreement with Wells Fargo Securities, LLC, dated 07/13/15, due 10/09/15 at 0.490%, collateralized by common stocks, a preferred stock and exchange-traded funds, market value $33,594,112 (repurchase proceeds $30,567,569) | 30,531,000 | 30,531,000 | |||||||||
Repurchase agreement with Wells Fargo Securities, LLC, dated 08/05/15, due 09/04/15 at 0.320%, collateralized by corporate bonds with various maturities to 04/06/21, market value $28,245,478 (repurchase proceeds $26,901,172) | 26,894,000 | 26,894,000 |
See Accompanying Notes to Financial Statements.
9
BofA Money Market Reserves
August 31, 2015
Repurchase Agreements (continued) | |||||||||||
Par ($) | Value ($) | ||||||||||
Repurchase agreement with Wells Fargo Securities, LLC, dated 08/17/15, due 09/16/15 at 0.330%, collateralized by corporate bonds with various maturities to 08/01/22, market value $78,090,837 (repurchase proceeds $74,382,450) | 74,362,000 | 74,362,000 | |||||||||
Repurchase agreement with Wells Fargo Securities, LLC, dated 08/25/15, due 09/01/15 at 0.140%, collateralized by U.S. Treasury obligations and U.S. Government Agency obligations with various maturities to 03/14/36, market value $25,256,908 (repurchase proceeds $24,761,674) | 24,761,000 | 24,761,000 | |||||||||
Repurchase agreement with Wells Fargo Securities, LLC, dated 08/26/15, due 09/02/15 at 0.120%, collateralized by a U.S. Treasury obligation maturing 10/15/15, market value $101,334,006 (repurchase proceeds $99,347,318) | 99,345,000 | 99,345,000 | |||||||||
Total Repurchase Agreements (cost of $3,347,545,000) | 3,347,545,000 | ||||||||||
Total Investments – 100.0% (cost of $16,156,491,177) (j) | 16,156,491,177 | ||||||||||
Other Assets & Liabilities, Net – 0.0% | 1,082,300 | ||||||||||
Net Assets – 100.0% | 16,157,573,477 |
Notes to Investment Portfolio:
Portfolio holdings are subject to change periodically and may not be representative of current holdings.
(a) Parenthetical date represents the effective maturity date for the security which may represent the demand date for puttable or callable securities or the prerefunded date for certain securities where applicable.
(b) The interest rate shown on floating rate or variable rate securities reflects the rate at August 31, 2015.
(c) Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At August 31, 2015, these securities,
which are not illiquid, amounted to $4,388,153,190 or 27.2% of net assets for the Fund.
(d) The rate shown represents the discount rate at the date of purchase.
(e) Collateralized commercial paper.
(f) Variable rate obligations have long dated final maturities, however, their effective maturity is within 397 days in accordance with a demand feature. These securities are secured by a letter of credit or other credit support agreements from banks. These securities are puttable upon not more than one, seven or thirty business days' notice. Put bonds and notes have a demand feature that matures within one year. The interest rate is changed periodically and the interest rate reflects the rate at August 31, 2015.
(g) See the tables following the Notes to the Investment Portfolio for additional information on the Joint Repurchase Agreement Treasury Account and the Joint Repurchase Agreement Treasury & Agency Account.
(h) This security is subject to a demand feature.
(i) Open repurchase agreement with no specific maturity date.
(j) Cost for federal income tax purposes is $16,156,491,177.
The following table summarizes the inputs used, as of August 31, 2015, 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 | $ | — | $ | 5,182,420,794 | $ | — | $ | 5,182,420,794 | |||||||||||
Total Commercial Paper | — | 2,757,837,962 | — | 2,757,837,962 | |||||||||||||||
Total Asset-Backed Commercial Paper | — | 2,456,051,494 | — | 2,456,051,494 | |||||||||||||||
Total Time Deposits | — | 1,940,316,000 | — | 1,940,316,000 | |||||||||||||||
Total Corporate Bonds | — | 247,180,998 | — | 247,180,998 | |||||||||||||||
Total Municipal Bonds | — | 158,310,000 | — | 158,310,000 | |||||||||||||||
Total Government & Agency Obligations | — | 57,728,929 | — | 57,728,929 | |||||||||||||||
Total Closed-End Investment Company | — | 9,100,000 | — | 9,100,000 | |||||||||||||||
Total Repurchase Agreements | — | 3,347,545,000 | — | 3,347,545,000 | |||||||||||||||
Total Investments | $ | — | $ | 16,156,491,177 | $ | — | $ | 16,156,491,177 |
The Fund's assets are assigned to the Level 2 input category which represents short-term obligations which are valued using amortized cost, an income approach which converts future cash flows to a present value based upon the discount or premium at purchase.
For the year ended August 31, 2015, all of the securities held in the Portfolio were Level 2 and there were no transfers to report.
For more information on valuation inputs, please refer to the Security Valuation section in the accompanying Notes to Financial Statements.
At August 31, 2015, the asset allocation of the Fund is as follows:
Asset Allocation | % of Net Assets | ||||||
Certificates of Deposit | 32.1 | ||||||
Commercial Paper | 17.1 | ||||||
Asset-Backed Commercial Paper | 15.2 | ||||||
Time Deposits | 12.0 | ||||||
Corporate Bonds | 1.5 | ||||||
Municipal Bonds | 1.0 | ||||||
Government & Agency Obligations | 0.3 | ||||||
Closed-End Investment Company | 0.1 | ||||||
79.3 | |||||||
Repurchase Agreements | 20.7 | ||||||
Other Assets & Liabilities, Net | 0.0 | ||||||
100.0 |
See Accompanying Notes to Financial Statements.
10
BofA Money Market Reserves
August 31, 2015
Joint Repurchase Agreement Treasury Account—At August 31, 2015, certain BofA Funds had undivided interests in the Joint Repurchase Agreement Treasury Account ($3,204,000,000 total principal amount) with a maturity date of September 1, 2015 as follows:
Fund | Principal Amount | Maturity Value | Collateral Value Allocation | ||||||||||||
BofA Cash Reserves | $ | 183,009,000 | $ | 183,009,626 | $ | 186,669,820 | |||||||||
BofA Money Market Reserves | 320,154,000 | 320,155,094 | 326,558,200 | ||||||||||||
BofA Treasury Reserves | 2,694,328,000 | 2,694,337,210 | 2,748,223,987 | ||||||||||||
BofA Government Plus Reserves | 6,509,000 | 6,509,022 | 6,639,203 | ||||||||||||
Total | $ | 3,204,000,000 | $ | 3,204,010,952 | $ | 3,268,091,210 |
The principal amounts of each Fund's interest in the Joint Repurchase Agreement Treasury Account were as follows:
Counterparty | Interest Rate | BofA Cash Reserves | BofA Money Market Reserves | BofA Treasury Reserves | BofA Government Plus Reserves | Total | |||||||||||||||||||||
BNP Paribas Securities Corp. | 0.12 | % | $ | 57,118,914 | $ | 99,923,221 | $ | 840,926,342 | $ | 2,031,523 | $ | 1,000,000,000 | |||||||||||||||
Credit Agricole CIB/US | 0.12 | 69,970,669 | 122,405,946 | 1,030,134,769 | 2,488,616 | 1,225,000,000 | |||||||||||||||||||||
Wells Fargo Securities, LLC | 0.13 | 55,919,417 | 97,824,833 | 823,266,889 | 1,988,861 | 979,000,000 | |||||||||||||||||||||
Total | $ | 183,009,000 | $ | 320,154,000 | $ | 2,694,328,000 | $ | 6,509,000 | $ | 3,204,000,000 |
At August 31, 2015, the Joint Repurchase Agreement Treasury Account was fully collateralized by U.S. Treasury obligations with various maturities to 08/15/2045, market value $3,268,091,210.
Joint Repurchase Agreement Treasury & Agency Account—At August 31, 2015, certain BofA Funds had undivided interests in the Joint Repurchase Agreement Treasury & Agency Account ($1,520,000,000 total principal amount) with a maturity date of September 1, 2015 as follows:
Fund | Principal Amount | Maturity Value | Collateral Value Allocation | ||||||||||||
BofA Cash Reserves | $ | 456,464,000 | $ | 456,465,788 | $ | 465,595,104 | |||||||||
BofA Money Market Reserves | 798,536,000 | 798,539,127 | 814,509,911 | ||||||||||||
BofA Government Plus Reserves | 265,000,000 | 265,001,039 | 270,301,059 | ||||||||||||
Total | $ | 1,520,000,000 | $ | 1,520,005,954 | $ | 1,550,406,074 |
The principal amounts of each Fund's interest in the Joint Repurchase Agreement Treasury &Agency Account were as follows:
Counterparty | Interest Rate | BofA Cash Reserves | BofA Money Market Reserves | BofA Government Plus Reserves | Total | ||||||||||||||||||
Credit Agricole CIB/US | 0.14 | % | $ | 321,326,632 | $ | 562,127,316 | $ | 186,546,052 | $ | 1,070,000,000 | |||||||||||||
RBC Capital Markets | 0.13 | 45,045,789 | 78,802,895 | 26,151,316 | 150,000,000 | ||||||||||||||||||
Wells Fargo Securities, LLC | 0.15 | 90,091,579 | 157,605,789 | 52,302,632 | 300,000,000 | ||||||||||||||||||
Total | $ | 456,464,000 | $ | 798,536,000 | $ | 265,000,000 | $ | 1,520,000,000 |
At August 31, 2015, the Joint Repurchase Agreement Treasury & Agency Account was fully collateralized by U.S. Treasury obligations and U.S. Government Agency obligations with various maturities to 08/20/2065, market value $1,550,406,074.
Acronym | Name | ||||||
AMT | Alternative Minimum Tax | ||||||
FHLB | Federal Home Loan Bank | ||||||
LIQ FAC | Liquidity Facility | ||||||
LOC | Letter of Credit | ||||||
SPA | Stand-by Purchase Agreement |
See Accompanying Notes to Financial Statements.
11
Statement of Assets and Liabilities – BofA Money Market Reserves
August 31, 2015
($) | |||||||||||
Assets | Investments, at amortized cost approximating value | 12,808,946,177 | |||||||||
Repurchase agreements, at amortized cost approximating value | 3,347,545,000 | ||||||||||
Total investments, at value | 16,156,491,177 | ||||||||||
Cash | 747 | ||||||||||
Receivable for: | |||||||||||
Fund shares sold | 41,713 | ||||||||||
Interest | 3,952,132 | ||||||||||
Trustees' deferred compensation plan | 25,359 | ||||||||||
Prepaid expenses | 101,639 | ||||||||||
Total Assets | 16,160,612,767 | ||||||||||
Liabilities | Expense reimbursement due to investment advisor | 28,350 | |||||||||
Payable for: | |||||||||||
Fund shares repurchased | 95,922 | ||||||||||
Distributions | 373,032 | ||||||||||
Investment advisory fee | 1,656,117 | ||||||||||
Administration fee | 588,891 | ||||||||||
Pricing and bookkeeping fees | 18,080 | ||||||||||
Transfer agent fee | 24,804 | ||||||||||
Trustees' fees | 11,037 | ||||||||||
Custody fee | 62,509 | ||||||||||
Distribution and service fees | 36,619 | ||||||||||
Chief Compliance Officer expenses | 5,610 | ||||||||||
Trustees' deferred compensation plan | 25,359 | ||||||||||
Other liabilities | 112,960 | ||||||||||
Total Liabilities | 3,039,290 | ||||||||||
Net Assets | 16,157,573,477 | ||||||||||
Net Assets Consist of | Paid-in capital | 16,157,518,102 | |||||||||
Overdistributed net investment income | (46,052 | ) | |||||||||
Accumulated net realized gain | 101,427 | ||||||||||
Net Assets | 16,157,573,477 |
See Accompanying Notes to Financial Statements.
12
Statement of Assets and Liabilities (continued) – BofA Money Market Reserves
August 31, 2015
Adviser Class Shares | Net assets | $ | 253,202,475 | ||||||||
Shares outstanding | 253,200,979 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Capital Class Shares | Net assets | $ | 15,418,965,862 | ||||||||
Shares outstanding | 15,418,871,034 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Institutional Capital Shares | Net assets | $ | 16,367,167 | ||||||||
Shares outstanding | 16,367,064 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Institutional Class Shares | Net assets | $ | 229,386,104 | ||||||||
Shares outstanding | 229,384,637 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Liquidity Class Shares | Net assets | $ | 5,678,443 | ||||||||
Shares outstanding | 5,678,407 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Trust Class Shares | Net assets | $ | 233,973,426 | ||||||||
Shares outstanding | 233,972,681 | ||||||||||
Net asset value per share | $ | 1.00 |
See Accompanying Notes to Financial Statements.
13
Statement of Operations – BofA Money Market Reserves
For the Year Ended August 31, 2015
($) | |||||||||||
Investment Income | Interest | 37,944,502 | |||||||||
Expenses | Investment advisory fee | 25,230,494 | |||||||||
Administration fee | 16,660,329 | ||||||||||
Service fee: | |||||||||||
Adviser Class Shares | 796,889 | ||||||||||
Liquidity Class Shares | 17,648 | ||||||||||
Shareholder administration fee: | |||||||||||
Institutional Class Shares | 83,955 | ||||||||||
Trust Class Shares | 104,919 | ||||||||||
Transfer agent fee | 274,589 | ||||||||||
Pricing and bookkeeping fees | 188,226 | ||||||||||
Trustees' fees | 133,172 | ||||||||||
Custody fee | 405,066 | ||||||||||
Chief Compliance Officer expenses | 33,630 | ||||||||||
Other expenses | 787,439 | ||||||||||
Total Expenses | 44,716,356 | ||||||||||
Fees waived or expenses reimbursed by investment advisor and/or administrator | (16,843,499 | ) | |||||||||
Fees waived by distributor: | |||||||||||
Adviser Class Shares | (590,623 | ) | |||||||||
Institutional Class Shares | (225 | ) | |||||||||
Liquidity Class Shares | (13,132 | ) | |||||||||
Trust Class Shares | (33,491 | ) | |||||||||
Net Expenses | 27,235,386 | ||||||||||
Net Investment Income | 10,709,116 | ||||||||||
Net realized gain on investments | 101,549 | ||||||||||
Net Increase Resulting from Operations | 10,810,665 |
See Accompanying Notes to Financial Statements.
14
Statement of Changes in Net Assets – BofA Money Market Reserves
Year Ended August 31, | |||||||||||||||
Increase (Decrease) in Net Assets | 2015 ($) | 2014 ($) | |||||||||||||
Operations | Net investment income | 10,709,116 | 7,716,518 | ||||||||||||
Net realized gain on investments | 101,549 | 32,597 | |||||||||||||
Net increase resulting from operations | 10,810,665 | 7,749,115 | |||||||||||||
Distributions to Shareholders | From net investment income: | ||||||||||||||
Adviser Class Shares | — | (2,570 | ) | ||||||||||||
Capital Class Shares | (10,627,260 | ) | (7,785,813 | ) | |||||||||||
Institutional Capital Shares | (21,876 | ) | (17,298 | ) | |||||||||||
Institutional Class Shares | (59,980 | ) | (24,010 | ) | |||||||||||
Liquidity Class Shares | — | (50 | ) | ||||||||||||
Trust Class Shares | — | (492 | ) | ||||||||||||
From net realized gains: | |||||||||||||||
Adviser Class Shares | (553 | ) | (876 | ) | |||||||||||
Capital Class Shares | (31,597 | ) | (37,101 | ) | |||||||||||
Institutional Capital Shares | (86 | ) | (50 | ) | |||||||||||
Institutional Class Shares | (290 | ) | (548 | ) | |||||||||||
Liquidity Class Shares | (20 | ) | (17 | ) | |||||||||||
Trust Class Shares | (131 | ) | (168 | ) | |||||||||||
Total distributions to shareholders | (10,741,793 | ) | (7,868,993 | ) | |||||||||||
Net Capital Stock Transactions | 69,242,176 | 6,516,656,812 | |||||||||||||
Total increase in net assets | 69,311,048 | 6,516,536,934 | |||||||||||||
Net Assets | Beginning of period | 16,088,262,429 | 9,571,725,495 | ||||||||||||
End of period | 16,157,573,477 | 16,088,262,429 | |||||||||||||
Overdistributed net investment income at end of period | (46,052 | ) | (46,052 | ) |
See Accompanying Notes to Financial Statements.
15
Statement of Changes in Net Assets (continued) – BofA Money Market Reserves
Capital Stock Activity | |||||||||||||||||||
Year Ended August 31, | |||||||||||||||||||
2015 | 2014 | ||||||||||||||||||
Shares | Dollars ($) | Shares | Dollars ($) | ||||||||||||||||
Adviser Class Shares | |||||||||||||||||||
Subscriptions | 2,484,091,790 | 2,484,091,790 | 929,071,620 | 929,071,620 | |||||||||||||||
Distributions reinvested | 19 | 19 | 257 | 257 | |||||||||||||||
Redemptions | (2,511,671,324 | ) | (2,511,671,324 | ) | (985,133,846 | ) | (985,133,846 | ) | |||||||||||
Net decrease | (27,579,515 | ) | (27,579,515 | ) | (56,061,969 | ) | (56,061,969 | ) | |||||||||||
Capital Class Shares | |||||||||||||||||||
Subscriptions | 259,324,438,486 | 259,324,438,486 | 225,633,443,334 | 225,633,443,334 | |||||||||||||||
Distributions reinvested | 6,997,470 | 6,997,470 | 5,517,123 | 5,517,123 | |||||||||||||||
Redemptions | (259,395,235,820 | ) | (259,395,235,820 | ) | (218,995,319,661 | ) | (218,995,319,661 | ) | |||||||||||
Net increase (decrease) | (63,799,864 | ) | (63,799,864 | ) | 6,643,640,796 | 6,643,640,796 | |||||||||||||
Institutional Capital Shares | |||||||||||||||||||
Subscriptions | 204,355,847 | 204,355,847 | 136,674,176 | 136,674,176 | |||||||||||||||
Distributions reinvested | 8,897 | 8,897 | 12,004 | 12,004 | |||||||||||||||
Redemptions | (211,431,612 | ) | (211,431,612 | ) | (122,001,453 | ) | (122,001,453 | ) | |||||||||||
Net increase (decrease) | (7,066,868 | ) | (7,066,868 | ) | 14,684,727 | 14,684,727 | |||||||||||||
Institutional Class Shares | |||||||||||||||||||
Subscriptions | 313,278,712 | 313,278,712 | 391,111,945 | 391,111,945 | |||||||||||||||
Distributions reinvested | 60,106 | 60,106 | 23,696 | 23,696 | |||||||||||||||
Redemptions | (270,755,537 | ) | (270,755,537 | ) | (470,393,215 | ) | (470,393,215 | ) | |||||||||||
Net increase (decrease) | 42,583,281 | 42,583,281 | (79,257,574 | ) | (79,257,574 | ) | |||||||||||||
Liquidity Class Shares | |||||||||||||||||||
Subscriptions | 5,030,074 | 5,030,074 | 76,047,596 | 76,047,596 | |||||||||||||||
Distributions reinvested | 20 | 20 | 67 | 67 | |||||||||||||||
Redemptions | (8,295,111 | ) | (8,295,111 | ) | (117,669,898 | ) | (117,669,898 | ) | |||||||||||
Net decrease | (3,265,017 | ) | (3,265,017 | ) | (41,622,235 | ) | (41,622,235 | ) | |||||||||||
Trust Class Shares | |||||||||||||||||||
Subscriptions | 556,571,175 | 556,571,175 | 721,133,575 | 721,133,575 | |||||||||||||||
Redemptions | (428,201,016 | ) | (428,201,016 | ) | (685,860,508 | ) | (685,860,508 | ) | |||||||||||
Net increase | 128,370,159 | 128,370,159 | 35,273,067 | 35,273,067 |
See Accompanying Notes to Financial Statements.
16
Financial Highlights – BofA Money Market Reserves
Selected data for a share outstanding throughout each period is as follows:
Year Ended August 31, | |||||||||||||||||||||||
Adviser Class Shares | 2015 | 2014 | 2013 | 2012 | 2011 | ||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||
Net investment income | — | — | — | — | — | (a) | |||||||||||||||||
Net realized gain (loss) on investments | — | (a) | — | (a) | — | (a) | — | (a) | — | (a) | |||||||||||||
Total from investment operations | — | (a) | — | (a) | — | (a) | — | (a) | — | (a) | |||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||
From net investment income | — | — | — | — | — | ||||||||||||||||||
From net realized gains | — | (a) | — | (a) | — | (a) | — | (a) | — | ||||||||||||||
Total distributions to shareholders | — | (a) | — | (a) | — | (a) | — | (a) | — | ||||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Total return (b)(c) | 0.00 | %(d) | 0.00 | %(d) | 0.00 | %(d) | 0.00 | %(d) | 0.00 | % | |||||||||||||
Ratios to Average Net Assets/Supplemental Data: | |||||||||||||||||||||||
Gross expenses | 0.51 | % | 0.51 | % | 0.51 | % | 0.51 | % | 0.52 | % | |||||||||||||
Net expenses | 0.22 | % | 0.21 | % | 0.28 | %(e) | 0.33 | %(e) | 0.31 | %(e) | |||||||||||||
Waiver/Reimbursement | 0.29 | % | 0.30 | % | 0.23 | % | 0.18 | % | 0.21 | % | |||||||||||||
Net investment income | — | — | — | (e) | — | (e) | — | %(d)(e) | |||||||||||||||
Net assets, end of period (000s) | $ | 253,202 | $ | 280,781 | $ | 336,848 | $ | 449,873 | $ | 681,956 |
Past performance is no guarantee of future results.
(a) Rounds to less than $0.001 per share.
(b) Total return at net asset value assuming all distributions reinvested.
(c) 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.
(d) Rounds to less than 0.01%.
(e) The benefits derived from expense reductions had an impact of less than 0.01%.
See Accompanying Notes to Financial Statements.
17
Financial Highlights – BofA Money Market Reserves
Selected data for a share outstanding throughout each period is as follows:
Year Ended August 31, | |||||||||||||||||||||||
Capital Class Shares | 2015 | 2014 | 2013 | 2012 (a) | 2011 | ||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||
Net investment income | 0.001 | 0.001 | 0.001 | 0.001 | 0.001 | ||||||||||||||||||
Net realized gain (loss) on investments | — | (b) | — | (b) | — | (b) | — | (b) | — | (b) | |||||||||||||
Total from investment operations | 0.001 | 0.001 | 0.001 | 0.001 | 0.001 | ||||||||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||
From net investment income | (0.001 | ) | (0.001 | ) | (0.001 | ) | (0.001 | ) | (0.001 | ) | |||||||||||||
From net realized gains | — | (b) | — | (b) | — | (b) | — | (b) | — | ||||||||||||||
Total distributions to shareholders | (0.001 | ) | (0.001 | ) | (0.001 | ) | (0.001 | ) | (0.001 | ) | |||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Total return (c)(d) | 0.07 | % | 0.05 | % | 0.07 | % | 0.14 | % | 0.11 | % | |||||||||||||
Ratios to Average Net Assets/Supplemental Data: | |||||||||||||||||||||||
Gross expenses | 0.26 | % | 0.26 | % | 0.26 | % | 0.26 | % | 0.27 | % | |||||||||||||
Net expenses | 0.16 | % | 0.16 | % | 0.20 | %(e) | 0.20 | %(e) | 0.20 | %(e) | |||||||||||||
Waiver/Reimbursement | 0.10 | % | 0.10 | % | 0.06 | % | 0.06 | % | 0.07 | % | |||||||||||||
Net investment income | 0.07 | % | 0.05 | % | 0.08 | %(e) | 0.14 | %(e) | 0.11 | %(e) | |||||||||||||
Net assets, end of period (000s) | $ | 15,418,966 | $ | 15,482,699 | $ | 8,839,168 | $ | 10,538,788 | $ | 6,387,295 |
Past performance is no guarantee of future results.
(a) On October 1, 2011, Retail A shares were converted into Capital Class shares.
(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) The benefits derived from expense reductions had an impact of less than 0.01%.
See Accompanying Notes to Financial Statements.
18
Financial Highlights – BofA Money Market Reserves
Selected data for a share outstanding throughout each period is as follows:
Year Ended August 31, | |||||||||||||||||||||||
Institutional Capital Shares | 2015 | 2014 | 2013 | 2012 (a) | 2011 | ||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||
Net investment income | 0.001 | 0.001 | 0.001 | 0.001 | 0.001 | ||||||||||||||||||
Net realized gain (loss) on investments | — | (b) | — | (b) | — | (b) | — | (b) | — | (b) | |||||||||||||
Total from investment operations | 0.001 | 0.001 | 0.001 | 0.001 | 0.001 | ||||||||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||
From net investment income | (0.001 | ) | (0.001 | ) | (0.001 | ) | (0.001 | ) | (0.001 | ) | |||||||||||||
From net realized gains | — | (b) | — | (b) | — | (b) | — | (b) | — | ||||||||||||||
Total distributions to shareholders | (0.001 | ) | (0.001 | ) | (0.001 | ) | (0.001 | ) | (0.001 | ) | |||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Total return (c)(d) | 0.07 | % | 0.05 | % | 0.07 | % | 0.14 | % | 0.11 | % | |||||||||||||
Ratios to Average Net Assets/Supplemental Data: | |||||||||||||||||||||||
Gross expenses | 0.26 | % | 0.26 | % | 0.26 | % | 0.26 | % | 0.27 | % | |||||||||||||
Net expenses | 0.16 | % | 0.16 | % | 0.20 | %(e) | 0.20 | %(e) | 0.20 | %(e) | |||||||||||||
Waiver/Reimbursement | 0.10 | % | 0.10 | % | 0.06 | % | 0.06 | % | 0.07 | % | |||||||||||||
Net investment income | 0.06 | % | 0.05 | % | 0.11 | %(e) | 0.14 | %(e) | 0.11 | %(e) | |||||||||||||
Net assets, end of period (000s) | $ | 16,367 | $ | 23,434 | $ | 8,749 | $ | 243,840 | $ | 213,428 |
Past performance is no guarantee of future results.
(a) After the close of business on September 30, 2011, G-Trust shares were renamed Institutional Capital shares.
(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) The benefits derived from expense reductions had an impact of less than 0.01%.
See Accompanying Notes to Financial Statements.
19
Financial Highlights – BofA Money Market Reserves
Selected data for a share outstanding throughout each period is as follows:
Year Ended August 31, | |||||||||||||||||||||||
Institutional Class Shares | 2015 | 2014 | 2013 | 2012 | 2011 | ||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||
Net investment income | — | (a) | — | (a) | — | (a) | 0.001 | 0.001 | |||||||||||||||
Net realized gain (loss) on investments | — | (a) | — | (a) | — | (a) | — | (a) | — | (a) | |||||||||||||
Total from investment operations | — | (a) | — | (a) | — | (a) | 0.001 | 0.001 | |||||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||
From net investment income | — | (a) | — | (a) | — | (a) | (0.001 | ) | (0.001 | ) | |||||||||||||
From net realized gains | — | (a) | — | (a) | — | (a) | — | (a) | — | ||||||||||||||
Total distributions to shareholders | — | (a) | — | (a) | — | (a) | (0.001 | ) | (0.001 | ) | |||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Total return (b)(c) | 0.03 | % | 0.01 | % | 0.04 | % | 0.10 | % | 0.07 | % | |||||||||||||
Ratios to Average Net Assets/Supplemental Data: | |||||||||||||||||||||||
Gross expenses | 0.30 | % | 0.30 | % | 0.30 | % | 0.30 | % | 0.31 | % | |||||||||||||
Net expenses | 0.20 | % | 0.20 | % | 0.24 | %(d) | 0.24 | %(d) | 0.24 | %(d) | |||||||||||||
Waiver/Reimbursement | 0.10 | % | 0.10 | % | 0.06 | % | 0.06 | % | 0.07 | % | |||||||||||||
Net investment income | 0.03 | % | 0.01 | % | 0.04 | %(d) | 0.09 | %(d) | 0.07 | %(d) | |||||||||||||
Net assets, end of period (000s) | $ | 229,386 | $ | 186,802 | $ | 266,063 | $ | 324,459 | $ | 534,875 |
Past performance is no guarantee of future results.
(a) Rounds to less than $0.001 per share.
(b) Total return at net asset value assuming all distributions reinvested.
(c) 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.
(d) 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:
Year Ended August 31, | |||||||||||||||||||||||
Liquidity Class Shares | 2015 | 2014 | 2013 | 2012 | 2011 | ||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||
Net investment income | — | — | — | — | (a) | — | (a) | ||||||||||||||||
Net realized gain (loss) on investments | — | (a) | — | (a) | — | (a) | — | (a) | — | (a) | |||||||||||||
Total from investment operations | — | (a) | — | (a) | — | (a) | — | (a) | — | (a) | |||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||
From net investment income | — | — | — | — | (a) | — | (a) | ||||||||||||||||
From net realized gains | — | (a) | — | (a) | — | (a) | — | (a) | — | ||||||||||||||
Total distributions to shareholders | — | (a) | — | (a) | — | (a) | — | (a) | — | (a) | |||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Total return (b)(c) | 0.00 | %(d) | 0.00 | %(d) | 0.00 | %(d) | 0.01 | % | 0.00 | %(d) | |||||||||||||
Ratios to Average Net Assets/Supplemental Data: | |||||||||||||||||||||||
Gross expenses | 0.51 | % | 0.51 | % | 0.52 | % | 0.51 | % | 0.52 | % | |||||||||||||
Net expenses | 0.22 | % | 0.21 | % | 0.29 | %(e) | 0.32 | %(e) | 0.31 | %(e) | |||||||||||||
Waiver/Reimbursement | 0.29 | % | 0.30 | % | 0.23 | % | 0.19 | % | 0.21 | % | |||||||||||||
Net investment income | — | — | — | (e) | 0.01 | %(e) | — | %(d)(e) | |||||||||||||||
Net assets, end of period (000s) | $ | 5,678 | $ | 8,943 | $ | 50,566 | $ | 29,257 | $ | 47,905 |
Past performance is no guarantee of future results.
(a) Rounds to less than $0.001 per share.
(b) Total return at net asset value assuming all distributions reinvested.
(c) 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.
(d) Rounds to less than 0.01%.
(e) The benefits derived from expense reductions had an impact of less than 0.01%.
See Accompanying Notes to Financial Statements.
21
Financial Highlights – BofA Money Market Reserves
Selected data for a share outstanding throughout each period is as follows:
Year Ended August 31, | |||||||||||||||||||||||
Trust Class Shares | 2015 | 2014 | 2013 | 2012 | 2011 | ||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||
Net investment income | — | — | — | (a) | — | (a) | — | (a) | |||||||||||||||
Net realized gain (loss) on investments | — | (a) | — | (a) | — | (a) | — | (a) | — | (a) | |||||||||||||
Total from investment operations | — | (a) | — | (a) | — | (a) | — | (a) | — | (a) | |||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||
From net investment income | — | — | — | (a) | — | (a) | — | (a) | |||||||||||||||
From net realized gains | — | (a) | — | (a) | — | (a) | — | (a) | — | ||||||||||||||
Total distributions to shareholders | — | (a) | — | (a) | — | (a) | — | (a) | — | (a) | |||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Total return (b)(c) | 0.00 | %(d) | 0.00 | %(d) | 0.01 | % | 0.04 | % | 0.02 | % | |||||||||||||
Ratios to Average Net Assets/Supplemental Data: | |||||||||||||||||||||||
Gross expenses | 0.36 | % | 0.36 | % | 0.36 | % | 0.36 | % | 0.37 | % | |||||||||||||
Net expenses | 0.23 | % | 0.21 | % | 0.27 | %(e) | 0.30 | %(e) | 0.29 | %(e) | |||||||||||||
Waiver/Reimbursement | 0.13 | % | 0.15 | % | 0.09 | % | 0.06 | % | 0.08 | % | |||||||||||||
Net investment income | — | — | 0.01 | %(e) | 0.04 | %(e) | 0.02 | %(e) | |||||||||||||||
Net assets, end of period (000s) | $ | 233,973 | $ | 105,603 | $ | 70,331 | $ | 83,572 | $ | 111,876 |
Past performance is no guarantee of future results.
(a) Rounds to less than $0.001 per share.
(b) Total return at net asset value assuming all distributions reinvested.
(c) 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.
(d) Rounds to less than 0.01%.
(e) The benefits derived from expense reductions had an impact of less than 0.01%.
See Accompanying Notes to Financial Statements.
22
Notes to Financial Statements – BofA Money Market Reserves
August 31, 2015
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.
The Fund is an investment company and accordingly follows the investment company accounting and reporting guidance of the Financial Accounting Standards Board (FASB) Accounting Standard Codification Topic 946 Financial Services—Investment Companies.
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 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). These investments may trade in markets that are not considered to be active, but whose values are supported by observable inputs such as U.S. government obligations and agency securities, investment-grade corporate bonds and state, municipal and provincial obligations. For money market funds operating under Rule 2a-7 of the 1940 Act, securities are valued at amortized cost which approximates market value and are considered to be valued using Level 2 inputs.
23
BofA Money Market Reserves, August 31, 2015
• 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.
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.
The Financial Accounting Standards Board's ("FASB") Accounting Standards Update ("ASU") No. 2011-11 (amended by ASU No. 2013-01): Disclosures about Offsetting Assets and Liabilities ("netting") on the Statement of Assets and Liabilities applies to instruments that are subject to master netting arrangements or similar agreements. The scope of the disclosure requirements is limited to derivative instruments, repurchase agreements and reverse repurchase agreements, and securities borrowing and securities lending transactions. This information is intended to enable users of
the Fund's financial statements to evaluate the effect or potential effect of netting arrangements on the Fund's financial position.
A Master Repurchase Agreement ("MRA") governs transactions between a Fund and select counterparties. A MRA contains provisions for, among other things, initiation, income payments, events of default and maintenance of securities for repurchase agreements. A MRA also permits offsetting with collateral to create one single net payment in the event of default or similar events, including the bankruptcy or insolvency of a counterparty.
For financial reporting purposes, the Fund does not offset financial assets and financial liabilities that are subject to master netting arrangements or similar agreements on the Statement of Assets and Liabilities.
If the seller defaults, the Fund could suffer a loss to the extent that the proceeds from the sale of the underlying securities and other collateral held by the Fund are less than the repurchase price and the Fund's costs associated with delay and enforcement of the repurchase agreement. In addition, in the event of default or insolvency of the seller, a court could determine that a Fund's interest in the collateral is not enforceable, resulting in additional losses to the Fund.
At August 31, 2015, the Fund's investments in repurchase agreements were subject to enforceable MRAs. The repurchase agreements on a net basis were as follows:
Repurchase Agreements | |||||||
Total Gross amount presented in Statement of Assets and Liabilities | $ | 3,347,545,000 | |||||
Non-cash Collateral offsetting (1) | $ | (3,347,545,000 | ) | ||||
Net Amount (2) | $ | — |
(1) At August 31, 2015, the value of the collateral exceeded the value of the related repurchase agreements.
(2) Net amount represents the net amount due from the counterparty in the event of a default based on the contractual set-off rights under the agreement.
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.
24
BofA Money Market Reserves, August 31, 2015
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. Expenses directly attributable to a specific class of shares are charged to that share class.
Determination of Class Net Asset Value
All income, expenses (other than class-specific expenses, which are charged to that share class, as shown on the Statement of Operations) and realized 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 based on the following methodologies: income and expenses are allocated to each class based on the settled shares method, while realized gains (losses) are allocated based on the relative net assets of each class.
Federal Income Tax Status
The Fund intends to qualify each year as a "regulated investment company" under Subchapter M of the Internal Revenue Code, as amended, and to distribute substantially all of its tax-exempt or taxable income, if any, for its tax year, and as such will not be subject to federal income taxes. In addition, the Fund intends to distribute in each calendar year substantially all of its net investment income, capital gains and certain other amounts, if any, such that the Fund 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 years ended August 31, 2015 and August 31, 2014 were as follows:
August 31, | |||||||||||
Distributions paid from | 2015 | 2014 | |||||||||
Ordinary Income* | $ | 10,741,793 | $ | 7,868,993 |
* For tax purposes, short-term capital gain distributions, if any, are considered ordinary income distributions.
As of August 31, 2015, the components of distributable earnings on a tax basis were as follows:
Undistributed Tax-Exempt Income | Undistributed Ordinary Income | Undistributed Long-Term Capital Gains | |||||||||
$ | — | $ | 428,193 | $ | 214 |
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.
25
BofA Money Market Reserves, August 31, 2015
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 ("BofA Corp."), 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 | % |
For the year ended August 31, 2015, 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.
For the year ended August 31, 2015, the 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.
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, 2015. 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.
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 (together, 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
26
BofA Money Market Reserves, August 31, 2015
$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 the 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.
Distribution and Shareholder Servicing Fees
BofA Distributors, Inc. (the "Distributor"), an affiliate of the Advisor and an indirect, wholly owned subsidiary of BofA Corp., 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 sales support services. The Distributor is entitled to retain some or all fees payable under the Distribution Plan in certain circumstances, including but not limited to, instances when there is no broker of record or when certain qualification standards have not been met by the broker of record. In certain instances, payments will continue to be made pursuant to the Distribution Plan with respect to shares held in classes that are closed to new investors and shares held by specific investors who are not eligible to make additional purchases in a particular share class.
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, 2015 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 the 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 | % |
27
BofA Money Market Reserves, August 31, 2015
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, 2015, so that the Fund's ordinary operating expenses (excluding any acquired fund fees and expenses, 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 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 August 31, 2015, the amounts potentially recoverable pursuant to this arrangement are as follows:
Amount of potential recovery expiring August 31: | Total potential | Amount recovered during the year | |||||||||||||||||
2018 | 2017 | 2016 | recovery | ended 08/31/2015 | |||||||||||||||
$ | 10,115,368 | $ | 9,758,129 | $ | 7,551,736 | $ | 27,425,233 | $ | — |
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%. Pursuant to a September 25, 2015 amendment, an annual administration fee of $25,000 is also accrued and apportioned to each fund participating in the line of credit based on the average net assets of the participating funds. Prior to the September 25, 2015 amendment, an annual administration fee of $10,000 was accrued and apportioned to each participating fund under the same terms.
28
BofA Money Market Reserves, August 31, 2015
For the year ended August 31, 2015, 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.
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 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.
Note 8. Money Market Fund Regulatory Matters
On July 23, 2014, the Securities and Exchange Commission voted to amend Rule 2a-7, which governs money market funds (such as the Fund). The majority of these amendments take effect in 2016. The most significant change is a requirement that institutional (i.e. large volume institutions such as banks, trusts, insurance companies, etc.) prime and institutional municipal money market funds move to a floating net asset value. Retail (i.e. a money market mutual
29
BofA Money Market Reserves, August 31, 2015
fund that has policies and procedures reasonably designed to limit all beneficial owners of the money market fund to natural persons) prime, municipal, government and treasury money market funds will continue to transact at a stable $1.00 share price. In addition, the boards of trustees of non-government money market funds may impose a temporary liquidity fee of up to 2% of the value of a redemption and/or suspend (or "gate") redemptions temporarily should a money market fund's level of weekly liquid assets fall below 30% of its total assets. At this time, the Fund's management is evaluating the implications of the reforms and their impact on the Fund, including potential effects on the Fund's operations and returns.
30
Report of Independent Registered Public Accounting Firm
To the Trustees of BofA Funds Series Trust and Shareholders of BofA Money Market Reserves
In our opinion, the accompanying statement of assets and liabilities, including the investment portfolio, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of BofA Money Market Reserves (the "Fund") (a series of BofA Funds Series Trust) at August 31, 2015, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and the financial highlights for each of the periods indicated, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as "financial statements") are the responsibility of the Fund's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at August 31, 2015 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
Boston, Massachusetts
October 21, 2015
31
Federal Income Tax Information (Unaudited) – BofA Money Market Reserves
The Fund hereby designates as a capital gain dividend with respect to the fiscal year ended August 31, 2015, $214, or if subsequently determined to be different, the net capital gain of such year.
The Fund designates the maximum allowable as qualified interest income for nonresident alien shareholders, as provided in the American Jobs Creation Act of 2004.
The Fund will notify shareholders in January 2016 of amounts for use in preparing 2015 income tax returns.
32
Fund Governance
The Trustees serve terms of indefinite duration. The names, addresses and ages of the Trustees and officers of the Funds in the BofA Funds Series Trust, the year each was first elected or appointed to office, their principal business occupations during at least the last five years, the number of Funds overseen by each Trustee and other directorships they hold are shown below. Each officer listed below serves as an officer of each Fund in the BofA Funds Series Trust.
Independent Trustees
Name, Address, and Year of Birth, Position with Funds, Year First Elected or Appointed to Office | Principal Occupation(s) During Past Five Years, Number of Funds in BofA Funds Series Trust Overseen by Trustee, Other Directorships Held | ||||||
Harrison M. Bains (Born 1943) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Trustee (since 2011) | Retired. Oversees 11 Funds. Mercer Funds (9 funds); BG Medicine, Inc. (life sciences). | ||||||
Paul Glasserman (Born 1962) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Trustee (since 2011) | Jack R. Anderson Professor of Business—Columbia Business School, since 2000 (Senior Vice Dean, 2004-2008; Professor, 1995-2000); Visiting Scholar—Federal Reserve Bank of New York, from 2008 to 2012; Consultant to the U.S. Treasury, 2011-2014; Independent consultant to financial firms since 1995. Oversees 11 Funds. | ||||||
William A. Hawkins (Born 1942) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Trustee (since 2005)1 | Managing Director—Overton Partners (financial consulting), August 2010 to present. Oversees 11 Funds. Columbia Funds (127 funds). | ||||||
R. Glenn Hilliard (Born 1943) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Trustee (since 2005)1 | Chairman and Chief Executive Officer—Hilliard Group LLC (investing and consulting), from 2003 through current; Non-Executive Director & Chairman—CNO Financial Group, Inc. (formerly Conseco, Inc.) (insurance), September 2003-May 2011. Oversees 11 Funds. Columbia Funds (127 funds). | ||||||
William J. Kelly (Born 1960) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Trustee (since 2011) | Chief Executive Officer—Chartered Alternative Investment Analyst Association, January 2014 to present. Oversees 11 Funds. | ||||||
Debra Perry (Born 1951) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Trustee (since 2011) | Retired. Managing Member—Perry Consulting LLC (advisory firm), from 2008 through 2014. Oversees 11 Funds. Korn/Ferry International (recruiting); Sanford C. Bernstein Fund, Inc. (18 funds); Board Member—PartnerRE (reinsurance). |
1 Includes service as trustees of Columbia Funds Series Trust, the predecessor trust.
The Statement of Additional Information includes additional information about the Trustees of the Funds and is available, without charge, upon request by calling 888-331-0904. (Institutional Investors, please call 800-353-0828.)
33
Fund Governance (continued)
Officers
Name, Address, and Year of Birth, Position with Funds, Year First Elected or Appointed to Office | Principal Occupation(s) During Past Five Years | ||||||
Michael J. Pelzar (Born 1968) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 President (since 2010) | President, BofA Global Capital Management Group, LLC since May 2010; Managing Director and Head of Product Management of the Advisor from 2007 to 2010. | ||||||
Kenneth B. Crotty (Born 1961) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Vice President (since 2015) Assistant Treasurer (2014-2015) | Chief Operating Officer, BofA Global Capital Management Group, LLC since August 2013; President KBC Consulting 2012-2013; Global Chief Operating Officer of Mercer Investments and President of Mercer Investments US 2006-2012. | ||||||
Jeffrey R. Coleman (Born 1969) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Senior Vice President, Chief Financial Officer, Chief Accounting Officer (since 2010) and Treasurer (since 2009) | Managing Director of Fund Administration and Transfer Agency Oversight of the Advisor since May 2010; Director of Fund Administration of the Advisor since January 2006. | ||||||
Marina Belaya (Born 1967) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Secretary and Chief Legal Officer (since 2013) | Assistant General Counsel, Director, Bank of America since July 2007. | ||||||
James R. Bordewick (Born 1959) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Senior Vice President and Chief Compliance Officer (since 2010) | Chief Compliance Officer of U.S. Trust, Bank of America Private Wealth Management since 2012; Chief Compliance Officer of the Advisor and Managing Director, Bank of America since May 2010. | ||||||
Barry S. Vallan (Born 1969) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Deputy Treasurer (since 2010) and Controller (since 2006) | Director of Fund Administration of the Advisor since May 2010; Vice President—Fund Treasury of the Advisor since October 2004; Vice President—Fund Administration of the Advisor since May 2002. |
34
Fund Governance (continued)
Officers (continued)
Name, Address, and Year of Birth, Position with Funds, Year First Elected or Appointed to Office | Principal Occupation(s) During Past Five Years | ||||||
Patrick Campbell (Born 1957) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Vice President (since 2015) Assistant Treasurer (2010-2015) | Director of Transfer Agency Oversight, BofA Global Capital Management Group, LLC since May 2010. | ||||||
Rana J. Wright (Born 1978) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Assistant Secretary (since 2014) | Assistant General Counsel and Director, Bank of America, and Chief Legal Officer, BofA Global Capital Management Group, LLC, since June 2014; Partner, Reed Smith LLP, 2012 to 2014; Associate, Reed Smith LLP, 2003 to 2011. | ||||||
Nitin Mehra (Born 1977) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Vice President (since 2015) Assistant Treasurer (2013-2015) | Managing Director and Head of Strategy and Product at BofA Global Capital Management Group, LLC since May 2011; Managing Director of Strategy and Product at BofA Global Capital Management Group, LLC from 2010-2011; Director of Product Strategy and Development of the Advisor from 2008-2010. |
35
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Important Information About This Report
The funds mail one shareholder report to each shareholder address. If you would like more than one report, please call shareholder services at 888.331.0904 (Institutional Investors: 800.353.0828) and additional reports will be sent to you. This report has been prepared for shareholders of the BofA Money Market Reserves.
A description of the policies and procedures that each fund uses to determine how to vote proxies and a copy of each fund's voting records are available (i) at www.bofacapital.com, (ii) on the Securities and Exchange Commission's website at www.sec.gov, and (iii) without charge, upon request, by calling 888.331.0904 (Institutional Investors: 800.353.0828). Information regarding how each fund voted proxies relating to portfolio securities during the 12-month period ended 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.
An investment in money market mutual funds is not insured or guaranteed by Bank of America, N.A. or its affiliates, or by the Federal Deposit Insurance Corporation or any other government agency. Although money market mutual funds seek to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in money market mutual funds.
BofA® 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
BofA Global Capital Management
100 Federal Street
Boston, MA 02110
Questions or comments regarding your account or investment in the Funds should be directed to:
Boston Financial Data Services
P.O. Box 8723
Boston, MA 02266-8723
Retail Investors: 888.331.0904
Institutional Investors: 800.353.0828
BofA Money Market Reserves
Annual Report, August 31, 2015
© 2015 Bank of America Corporation. All rights reserved.
BofA Distributors, Inc.
100 Federal Street, Boston, MA 02110
888.331.0904 (Institutional Investors: 800.353.0828) www.bofacapital.com
AR-MMR-1015
BofA Funds
Annual Report
August 31, 2015
• 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 | 14 | ||||||
Statement of Operations | 16 | ||||||
Statement of Changes in Net Assets | 17 | ||||||
Financial Highlights | 19 | ||||||
Notes to Financial Statements | 27 | ||||||
Report of Independent Registered Public Accounting Firm | 34 | ||||||
Federal Income Tax Information | 35 | ||||||
Fund Governance | 36 | ||||||
Important Information About This Report | 41 |
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.
President's Message
To Our Valued Shareholders:
A year ago the consensus within the financial community was that the interest rate environment would soon be more hospitable to money market fund investors as a strengthening U.S. economy finally moved the Federal Reserve ("the Fed") to raise short-term interest rates. That rate hike has yet to materialize, so for liquidity investors, the most important news out of Washington has come not from the Fed, but from the U.S. Securities and Exchange Commission ("SEC"), which adopted sweeping changes to the regulations governing U.S. money market funds.
To take effect in October 2016, the amendments to Rule 2a-7 under the Investment Company Act of 1940 include two important reforms that are prompting investors to reevaluate their liquidity investment strategies:
• Institutional prime and institutional municipal money market funds must "float" their net asset values ("NAVs"), which means the value of the funds' shares would be based on the market value of their underlying securities. Only government funds and funds serving retail investors—defined as "natural persons"—would retain their stable, $1-per-share NAVs.
• The boards of trustees of non-government money market funds may impose a temporary liquidity fee of up to 2% of the value of a redemption or to suspend or "gate" redemptions temporarily should a money market fund's level of weekly liquid assets fall below 30% of its total assets.
These changes are part of a multi-year effort on the part of the SEC to make money market funds more resilient during market crises, when heavy redemption activity can exert strong downward pressure on funds' NAVs.
After extensive analysis, we have concluded that the impact of the rule changes will be less significant than many investors first believed. With regard to floating NAV funds, for example, fund managers still will go to great lengths to maintain the $1-per-share NAV after the floating NAV rule takes effect. If there is any movement around the $1 mark, that variation likely would be very limited under normal market conditions because of the preponderance of short-term, high-quality securities in money market funds. As for liquidity fees and redemption gates, these measures would be a last resort for fund managers because of the reputational damage money market fund companies would incur were they to impose these measures.
Recognizing the importance of money market fund reform to our shareholders, BofA Global Capital Management has launched a series of whitepapers analyzing the potential impact of the rule changes on clients' liquidity-management programs. These papers are available at www.bofacapital.com. Our preparations for the implementation of the reforms are proceeding, and we anticipate no problems meeting the October 2016 compliance deadline.
Shifting back to the macroeconomic environment, the Fed held the benchmark federal funds rate steady in September, but we believe the drop in the U.S. unemployment rate and steady economic growth should allow the central bank to begin increasing the federal funds rate from the current 0% to .25% rate—in the near future. This, in our view, will mark the beginning of a gradual increase in rates that over time should translate into potentially more attractive yields for money market fund investors. We are positioning the BofA Funds to capture the potential benefits of a rising-rate environment.
Given the complexity of modern financial markets and the ever-present threat of unforeseen investment challenges, the managers of the BofA Funds will continue to employ a conservative investment process designed to achieve your most important goals: principal protection, a high degree of liquidity and competitive risk-adjusted yields. We believe our conservative investment posture; our focus on the management of liquidity investments; and the resources available to us as part of one of the world's largest financial institutions position BofA Global Capital Management to help you reach your liquidity objectives.
On behalf of everyone at BofA Global Capital Management, I thank you for the opportunity to have served you over the past year. We appreciate your business, and we look forward to working with you in the months and years ahead.
Sincerely,
Michael Pelzar
President, BofA Global Capital Management
ARQ5HMRY
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:
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 $1,000. Please refer to the Fund's prospectus for additional details.
3/1/15 – 8/31/15 (Unaudited)
Account value at the beginning of the period ($) | 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 | 0.71 | 0.71 | 0.14 | ||||||||||||||||||||||||
Capital Class Shares | 1,000.00 | 1,000.00 | 1,000.00 | 1,024.50 | 0.71 | 0.71 | 0.14 | ||||||||||||||||||||||||
Daily Class Shares | 1,000.00 | 1,000.00 | 1,000.00 | 1,024.50 | 0.71 | 0.71 | 0.14 | ||||||||||||||||||||||||
Institutional Capital Shares | 1,000.00 | 1,000.00 | 1,000.00 | 1,024.50 | 0.71 | 0.71 | 0.14 | ||||||||||||||||||||||||
Institutional Class Shares | 1,000.00 | 1,000.00 | 1,000.00 | 1,024.45 | 0.76 | 0.77 | 0.15 | ||||||||||||||||||||||||
Investor Class Shares | 1,000.00 | 1,000.00 | 1,000.00 | 1,024.50 | 0.71 | 0.71 | 0.14 | ||||||||||||||||||||||||
Liquidity Class Shares | 1,000.00 | 1,000.00 | 1,000.00 | 1,024.50 | 0.71 | 0.71 | 0.14 | ||||||||||||||||||||||||
Trust Class Shares | 1,000.00 | 1,000.00 | 1,000.00 | 1,024.50 | 0.71 | 0.71 | 0.14 |
Expenses paid during the period are equal to the annualized expense ratio for the share class, multiplied by the average account value over the period, then multiplied by the number of days in the Fund's most recent fiscal half-year and divided by 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
August 31, 2015
Municipal Bonds – 79.0% | |||||||||||
Par ($) | Value ($) | ||||||||||
Alaska – 1.3% | |||||||||||
AK Anchorage | |||||||||||
Series 2015 | |||||||||||
0.500% 09/17/15 | 14,100,000 | 14,102,627 | |||||||||
Alaska Total | 14,102,627 | ||||||||||
Arizona – 0.7% | |||||||||||
AZ Maricopa County Industrial Development Authority | |||||||||||
Sonora Vista II Apartments, | |||||||||||
Series 2003 A, AMT, LOC: Wells Fargo Bank N.A. 0.150% 12/01/39 (09/03/15) (a)(b) | 800,000 | 800,000 | |||||||||
AZ Phoenix Industrial Development Authority | |||||||||||
Phoenix Broadway Associates, | |||||||||||
Sunrise Vista Apartments, Series 2003 A, AMT, LOC: Wells Fargo Bank N.A. 0.150% 06/01/31 (09/03/15) (a)(b) | 4,760,000 | 4,760,000 | |||||||||
AZ Pinal County Industrial Development Authority | |||||||||||
DA Holdings LLC, | |||||||||||
Series 2002 AMT, LOC: Wells Fargo Bank N.A. 0.080% 10/01/22 (09/03/15) (a)(b) | 2,100,000 | 2,100,000 | |||||||||
Arizona Total | 7,660,000 | ||||||||||
Arkansas – 0.5% | |||||||||||
AR Development Finance Authority | |||||||||||
MERLOTS, | |||||||||||
Series 2007 C106, AMT, DPCE: GNMA/FNMA, SPA: Wells Fargo Bank N.A.: 0.330% 01/01/35 (09/02/15) (a)(b)(c) | 20,000 | 20,000 | |||||||||
Paco Steel & Engineering Corp., | |||||||||||
Series 1995 AMT, | |||||||||||
LOC: Wilshire State Bank 0.140% 12/01/15 (09/03/15) (a)(b) | 5,630,000 | 5,630,000 | |||||||||
Arkansas Total | 5,650,000 | ||||||||||
California – 1.7% | |||||||||||
CA Golden Empire Schools Financing Authority | |||||||||||
Kern High School District | |||||||||||
Series 2015 0.220% 05/01/16 (09/03/15) (a)(d) | 7,475,000 | 7,475,110 |
Par ($) | Value ($) | ||||||||||
CA Oxnard Housing Authority | |||||||||||
Seawind Apartments Ltd., | |||||||||||
Series 1990 A, AMT, DPCE: FNMA 0.040% 12/01/20 (09/02/15) (a)(d) | 3,175,000 | 3,175,000 | |||||||||
CA Statewide Communities Development Authority | |||||||||||
JTF Enterprises LLC, | |||||||||||
Series 1996 A AMT, LOC: Wells Fargo Bank N.A. 0.080% 09/01/16 (09/02/15) (a)(b) | 3,000,000 | 3,000,000 | |||||||||
CA State | |||||||||||
Series 2003 A-2 | |||||||||||
LOC: Bank of Montreal 0.010% 05/01/33 (09/01/15) (a)(b) | 3,920,000 | 3,920,000 | |||||||||
California Total | 17,570,110 | ||||||||||
Colorado – 1.4% | |||||||||||
CO Boulder County | |||||||||||
Boulder Medical Center PC, | |||||||||||
Series 1998, AMT, LOC: Wells Fargo Bank N.A. 0.150% 01/01/17 (09/03/15) (a)(b) | 610,000 | 610,000 | |||||||||
CO RBC Municipal Products, Inc. Trust | |||||||||||
Series 2015 E-55, | |||||||||||
LOC: Royal Bank of Canada LIQ FAC: Royal Bank of Canada 0.110% 04/01/19 (09/03/15) (a)(b)(c) | 7,100,000 | 7,100,000 | |||||||||
CO RIB Floater Trust | |||||||||||
Series 2015 | |||||||||||
LOC: Barclays Bank PLC 0.170% 08/01/18 (09/03/15) (a)(b)(c) | 6,900,000 | 6,900,000 | |||||||||
Colorado Total | 14,610,000 | ||||||||||
Connecticut – 0.6% | |||||||||||
CT Darien | |||||||||||
Series 2014 | |||||||||||
1.000% 09/09/15 | 1,000,000 | 1,000,175 | |||||||||
CT Housing Finance Authority | |||||||||||
MERLOTS, | |||||||||||
Series 2007 C90, AMT, SPA: Wells Fargo Bank N.A. 0.080% 11/15/15 (09/02/15) (a)(b)(c) | 780,000 | 780,000 |
See Accompanying Notes to Financial Statements.
2
BofA Municipal Reserves
August 31, 2015
Municipal Bonds (continued) | |||||||||||
Par ($) | Value ($) | ||||||||||
CT Killingly | |||||||||||
Series 2015 | |||||||||||
2.000% 04/28/16 | 1,000,000 | 1,011,112 | |||||||||
CT Stafford | |||||||||||
Series 2015 | |||||||||||
2.000% 08/03/16 | 3,600,000 | 3,648,794 | |||||||||
Connecticut Total | 6,440,081 | ||||||||||
Delaware – 0.6% | |||||||||||
DE University of Delaware | |||||||||||
Series 2013 C | |||||||||||
0.700% 11/01/37 (06/01/16) (a)(d) | 6,000,000 | 6,012,102 | |||||||||
Delaware Total | 6,012,102 | ||||||||||
District of Columbia – 1.7% | |||||||||||
DC Columbia Enterprise Zone Revenue | |||||||||||
House on F Street LLC, | |||||||||||
Series 2001, AMT, LOC: Bank of New York Mellon 0.060% 05/01/16 (09/03/15) (a)(b) | 15,000,000 | 15,000,000 | |||||||||
DC Water & Sewer Authority | |||||||||||
Series B | |||||||||||
GTY AGMT: Landesbank Hessen-Thüringen 0.050% 10/02/15 | 2,800,000 | 2,800,000 | |||||||||
District Of Columbia Total | 17,800,000 | ||||||||||
Florida – 3.8% | |||||||||||
FL Hillsborough Community College Foundation, Inc. | |||||||||||
Series 2006 | |||||||||||
LOC: BMO Harris Bank N.A. 0.020% 12/01/33 (09/03/15) (a)(b) | 7,990,000 | 7,990,000 | |||||||||
FL Hillsborough County Industrial Development Authority | |||||||||||
Seaboard Tampa Terminals, | |||||||||||
Series 1986, AMT, LOC: Northern Trust Company 0.300% 12/01/16 (09/02/15) (a)(b) | 4,250,000 | 4,250,000 | |||||||||
FL Hillsborough County School Board | |||||||||||
Master Lease, | |||||||||||
Series 2008 C, LOC: Wells Fargo Bank N.A. 0.010% 07/01/30 (09/01/15) (a)(b) | 3,500,000 | 3,500,000 |
Par ($) | Value ($) | ||||||||||
FL Miami-Dade County | |||||||||||
Miami Sport, | |||||||||||
Series 2009 E, LOC: Wells Fargo Bank N.A. 0.020% 10/01/48 (09/02/15) (a)(b) | 5,200,000 | 5,200,000 | |||||||||
FL RBC Municipal Products, Inc. Trust | |||||||||||
Series 2015 E-56 | |||||||||||
LOC: Royal Bank of Canada LIQ FAC: Royal Bank of Canada 0.110% 01/09/17 (09/03/15) (a)(b)(c) | 2,500,000 | 2,500,000 | |||||||||
Series 2015 E-66 | |||||||||||
LOC: Royal Bank of Canada LIQ FAC: Royal Bank of Canada 0.110% 01/09/17 (09/03/15) (a)(b)(c) | 7,650,000 | 7,650,000 | |||||||||
FL Reedy Creek Improvement District | |||||||||||
Series 2005 | |||||||||||
Pre-refunded 10/01/15, Escrowed in U.S. Treasuries 5.000% 10/01/22 | 1,130,000 | 1,134,381 | |||||||||
FL RIB Floater Trust | |||||||||||
Series 2015 | |||||||||||
LOC: Barclays Bank PLC 0.150% 05/01/18 (09/03/15) (a)(b)(c) | 7,840,000 | 7,840,000 | |||||||||
Florida Total | 40,064,381 | ||||||||||
Georgia – 3.8% | |||||||||||
GA Atkinson/Coffee Counties Joint Development Authority | |||||||||||
Langboard Inc, | |||||||||||
Series 2008 AMT, LOC: Wells Fargo Bank N.A. 0.050% 11/01/33 (09/03/15) (a)(b) | 5,250,000 | 5,250,000 | |||||||||
GA Bartow County Development Authority | |||||||||||
Series 2014 AMT, | |||||||||||
LOC: Comerica Bank 0.100% 10/01/34 (09/03/15) (a)(b) | 3,255,000 | 3,255,000 | |||||||||
GA Gordon County Development Authority | |||||||||||
Nance Carpet & Rug, Inc., | |||||||||||
Series 2006, AMT, LOC: Branch Banking & Trust 0.180% 10/01/21 (09/03/15) (a)(b) | 1,415,000 | 1,415,000 |
See Accompanying Notes to Financial Statements.
3
BofA Municipal Reserves
August 31, 2015
Municipal Bonds (continued) | |||||||||||
Par ($) | Value ($) | ||||||||||
GA Gwinnett County Development Authority | |||||||||||
KMD Group LLC, | |||||||||||
Series 2007, AMT, LOC: Branch Banking & Trust 0.170% 02/01/32 (09/02/15) (a)(b) | 2,570,000 | 2,570,000 | |||||||||
GA Main Street Natural Gas, Inc. | |||||||||||
Series 2010 A1 | |||||||||||
GTY AGMT: Royal Bank of Canada SPA: Royal Bank of Canada 0.080% 08/01/40 (09/03/15) (a)(b) | 11,000,000 | 11,000,000 | |||||||||
Series 2010 A2 | |||||||||||
GTY AGMT: Royal Bank of Canada SPA: Royal Bank of Canada 0.080% 08/01/40 (09/03/15) (a)(b) | 10,940,000 | 10,940,000 | |||||||||
GA Savannah Economic Development Authority | |||||||||||
Consolidated Utilities, Inc., | |||||||||||
Series 2007, AMT, LOC: Branch Banking & Trust 0.080% 11/01/27 (09/03/15) (a)(b) | 3,800,000 | 3,800,000 | |||||||||
GA Wayne County Industrial Development Authority | |||||||||||
Absorption Corp., | |||||||||||
Series 2004, AMT, LOC: Branch Banking & Trust 0.080% 09/01/19 (09/03/15) (a)(b) | 1,200,000 | 1,200,000 | |||||||||
Georgia Total | 39,430,000 | ||||||||||
Idaho – 1.3% | |||||||||||
ID Eagle Industrial Development Corp. | |||||||||||
Rose Cottage LLC, | |||||||||||
Series 2001, AMT, LOC: Wells Fargo Bank N.A. 0.200% 09/01/21 (09/03/15) (a)(b) | 2,100,000 | 2,100,000 | |||||||||
ID Housing & Finance Association | |||||||||||
Balmoral II LP, | |||||||||||
Series 2001, AMT, LOC: U.S. Bank N.A. 0.030% 04/01/33 (09/01/15) (a)(b) | 3,870,000 | 3,870,000 | |||||||||
ID State | |||||||||||
Series 2015 | |||||||||||
2.000% 06/30/16 | 7,200,000 | 7,301,609 | |||||||||
Idaho Total | 13,271,609 |
Par ($) | Value ($) | ||||||||||
Illinois – 3.2% | |||||||||||
IL Chicago | |||||||||||
North Larabee LP, | |||||||||||
Series 2001 A, AMT, LOC: BMO Harris Bank N.A. 0.140% 04/01/36 (09/03/15) (a)(b) | 3,915,000 | 3,915,000 | |||||||||
Renaissance St. Luke LP, | |||||||||||
Series 2004 A, AMT, LOC: BMO Harris Bank N.A. 0.140% 01/01/39 (09/03/15) (a)(b) | 3,270,000 | 3,270,000 | |||||||||
IL Finance Authority | |||||||||||
Concordia Place Apartrments LP, | |||||||||||
Series 2013 A, AMT, LOC: BMO Harris Bank N.A. 0.210% 01/01/34 (09/03/15) (a)(b) | 10,915,000 | 10,915,000 | |||||||||
Decatur Mental Health Center, | |||||||||||
Series 1997, AMT, LOC: PNC Bank N.A. 0.170% 05/01/18 (09/03/15) (a)(b) | 520,000 | 520,000 | |||||||||
Knead Dough Baking, | |||||||||||
Series 2000, AMT, LOC: JPMorgan Chase Bank 0.460% 09/01/25 (09/03/15) (a)(b) | 50,000 | 50,000 | |||||||||
Lake Towers Associates II LP, | |||||||||||
Cinnamon Lake Towers, Series 1997, AMT, DPCE: FHLMC: 0.210% 10/01/23 (09/03/15) (a)(b) | 8,565,000 | 8,565,000 | |||||||||
IL Housing Development Authority | |||||||||||
Pontiac Tower Associates III, | |||||||||||
Series 2005, AMT, LOC: BMO Harris Bank N.A. 0.210% 09/01/35 (09/03/15) (a)(b) | 3,190,000 | 3,190,000 | |||||||||
Sterling Towers Associates II, | |||||||||||
Series 2001, AMT, LOC: BMO Harris Bank N.A. 0.210% 10/01/35 (09/03/15) (a)(b) | 3,130,000 | 3,130,000 | |||||||||
Illinois Total | 33,555,000 |
See Accompanying Notes to Financial Statements.
4
BofA Municipal Reserves
August 31, 2015
Municipal Bonds (continued) | |||||||||||
Par ($) | Value ($) | ||||||||||
Indiana – 1.3% | |||||||||||
IN Allen County | |||||||||||
Debeere LLC, | |||||||||||
Series 2002, AMT, LOC: JPMorgan Chase Bank 0.460% 08/01/17 (09/03/15) (a)(b) | 600,000 | 600,000 | |||||||||
IN Finance Authority | |||||||||||
Parkview Health System, | |||||||||||
Series 2009 B, LOC: Wells Fargo Bank N.A. 0.020% 11/01/39 (09/02/15) (a)(b) | 4,100,000 | 4,100,000 | |||||||||
Sisters of St. Francis Health, | |||||||||||
Series 2008 F, LOC: Bank of NY Mellon 0.020% 09/01/48 (09/03/15) (a)(b) | 6,900,000 | 6,900,000 | |||||||||
IN Huntingburg | |||||||||||
Lincoln Village LP, | |||||||||||
Series 2000 AMT, LOC: FHLB 0.180% 07/01/35 (09/03/15) (a)(b) | 1,850,000 | 1,850,000 | |||||||||
Indiana Total | 13,450,000 | ||||||||||
Kansas – 1.1% | |||||||||||
KS Olathe | |||||||||||
Diamant Boart, Inc., | |||||||||||
Series 1997 A, AMT, LOC: Svenska Handelsbanken 0.160% 03/01/27 (09/03/15) (a)(b) | 1,000,000 | 1,000,000 | |||||||||
KS Wichita | |||||||||||
Flightsafety International, Inc., | |||||||||||
Series 2003 AMT, GTY AGMT: Berkshire Hathaway, Inc. 0.020% 11/01/23 (09/03/15) (a)(b) | 10,860,000 | 10,860,000 | |||||||||
Kansas Total | 11,860,000 | ||||||||||
Kentucky – 2.1% | |||||||||||
KY Campbellsville-Taylor County Economic Development Authority | |||||||||||
Airguard Industries, Inc., | |||||||||||
Series 2001, AMT, LOC: JPMorgan Chase Bank 0.300% 05/01/31 (09/02/15) (a)(b) | 7,410,000 | 7,410,000 |
Par ($) | Value ($) | ||||||||||
KY Hopkinsville | |||||||||||
Comefri USA, Inc., | |||||||||||
Series 2006, AMT, LOC: Branch Banking & Trust 0.180% 06/01/26 (09/03/15) (a)(b) | 2,090,000 | 2,090,000 | |||||||||
KY Housing Revenue Corp. | |||||||||||
Series 2006 F, AMT, | |||||||||||
SPA: PNC Bank N.A. 0.030% 07/01/29 (09/02/15) (a)(b) | 9,000,000 | 9,000,000 | |||||||||
KY Louisville/Jefferson County Metropolitan Government | |||||||||||
Zeochem LLC, | |||||||||||
Series 2001 LOC: UBS AG 0.130% 08/01/21 (09/03/15) (a)(b) | 3,625,000 | 3,625,000 | |||||||||
Kentucky Total | 22,125,000 | ||||||||||
Louisiana – 0.5% | |||||||||||
LA Calcasieu Parish Industrial Development Board, Inc. | |||||||||||
Hydroserve Westlake LLC, | |||||||||||
Series 1999, AMT, LOC: JPMorgan Chase Bank 0.170% 12/01/24 (09/02/15) (a)(b) | 5,100,000 | 5,100,000 | |||||||||
Louisiana Total | 5,100,000 | ||||||||||
Maine – 1.9% | |||||||||||
ME State Housing Authority | |||||||||||
Series 2005 D-3 AMT, | |||||||||||
SPA: State Street Bank & Trust Co. 0.030% 11/15/38 (09/03/15) (a)(b) | 20,000,000 | 20,000,000 | |||||||||
Maine Total | 20,000,000 | ||||||||||
Massachusetts – 1.7% | |||||||||||
MA Clipper Tax-Exempt Certificate Trust | |||||||||||
MA Bay Transportation Authority | |||||||||||
Series 2007 LIQ FAC: State Street Bank & Trust Co. 0.050% 07/01/27 (09/03/15) (a)(b) | 3,800,000 | 3,800,000 | |||||||||
MA Framingham | |||||||||||
Series 2014 | |||||||||||
5.000% 12/01/15 | 1,479,000 | 1,496,474 |
See Accompanying Notes to Financial Statements.
5
BofA Municipal Reserves
August 31, 2015
Municipal Bonds (continued) | |||||||||||
Par ($) | Value ($) | ||||||||||
MA Haverhill | |||||||||||
Series 2014 | |||||||||||
DPCE: Massachusetts Qualified Bond Program (Chapter 44A) 1.000% 09/01/15 | 5,500,000 | 5,500,000 | |||||||||
MA Lawrence | |||||||||||
Series 2014 A | |||||||||||
DPCE: Massachusetts Qualified Bond Program (Chapter 44A) 1.000% 12/01/15 | 4,000,000 | 4,007,050 | |||||||||
Series 2015 A | |||||||||||
Insured: State Aid Withholding 1.750% 09/01/16 (e) | 3,000,000 | 3,038,220 | |||||||||
Massachusetts Total | 17,841,744 | ||||||||||
Michigan – 4.1% | |||||||||||
MI Higher Education Facilities Authority | |||||||||||
University of Detroit Mercy, | |||||||||||
Series 2007, LOC: JPMorgan Chase Bank 0.010% 11/01/36 (09/01/15) (a)(b) | 5,425,000 | 5,425,000 | |||||||||
MI Housing Development Authority | |||||||||||
Series 2007 F AMT, | |||||||||||
SPA: PNC Bank N.A. 0.030% 12/01/38 (09/02/15) (a)(b) | 6,925,000 | 6,925,000 | |||||||||
Series 2008 A, AMT, | |||||||||||
SPA: JPMorgan Chase Bank 0.090% 10/01/37 (09/01/15) (a)(b) | 15,000,000 | 15,000,000 | |||||||||
Series 2008 C AMT, | |||||||||||
SPA: Bank Tokyo-Mitsubishi UFJ 0.030% 04/01/23 (09/02/15) (a)(b) | 2,905,000 | 2,905,000 | |||||||||
MI Rochester Community School District | |||||||||||
Series 2012 | |||||||||||
3.000% 05/01/16 | 1,300,000 | 1,321,511 | |||||||||
MI Sterling Heights Economic Development Corp. | |||||||||||
Kunath Enterprises LLC, | |||||||||||
Series 2000, AMT, LOC: JPMorgan Chase Bank 0.460% 02/01/16 (09/02/15) (a)(b) | 200,000 | 200,000 |
Par ($) | Value ($) | ||||||||||
MI Strategic Fund | |||||||||||
Coastal Container Corp., | |||||||||||
Series 2007, AMT, LOC: PNC Bank N.A. 0.220% 12/01/27 (09/03/15) (a)(b) | 4,290,000 | 4,290,000 | |||||||||
MI Trunk Line Revenue | |||||||||||
Series 2005 B | |||||||||||
Pre-refunded 09/01/15 Escrowed in U.S. Treasuries 4.000% 09/01/17 | 6,700,000 | 6,700,000 | |||||||||
Michigan Total | 42,766,511 | ||||||||||
Minnesota – 4.9% | |||||||||||
MN Bemidji Independent School District No 31 | |||||||||||
Series 2013 A | |||||||||||
Credit Support: Minnesota School District Credit Enhancement Program 4.000% 04/01/16 | 2,030,000 | 2,073,514 | |||||||||
MN East Grand Forks Independent School District No 595 | |||||||||||
Series 2014 | |||||||||||
Credit Support: Minnesota School District Credit Enhancement Program 1.250% 09/11/15 | 3,000,000 | 3,000,818 | |||||||||
MN Eden Prairie | |||||||||||
SWB LLC, | |||||||||||
Series 2000 A, AMT, LOC: U.S. Bank N.A. 0.140% 11/01/20 (09/03/15) (a)(b) | 1,065,000 | 1,065,000 | |||||||||
MN Farmington Independent School District No 192 | |||||||||||
Series 2015 B | |||||||||||
Credit Support: Minnesota School District Credit Enhancement Program 1.000% 09/28/15 | 4,000,000 | 4,002,165 | |||||||||
MN Fergus Falls Independent School District No 544 | |||||||||||
Series 2015 | |||||||||||
Credit Support: Minnesota School District Credit Enhancement Program 2.000% 09/09/16 (e) | 2,700,000 | 2,740,284 | |||||||||
MN Holdingford Independent School District No 738 | |||||||||||
Series 2015 | |||||||||||
Credit Support: Minnesota School District Credit Enhancement Program 2.000% 09/02/16 (e) | 1,000,000 | 1,014,920 |
See Accompanying Notes to Financial Statements.
6
BofA Municipal Reserves
August 31, 2015
Municipal Bonds (continued) | |||||||||||
Par ($) | Value ($) | ||||||||||
MN Housing Finance Agency | |||||||||||
Series 2015 D AMT, | |||||||||||
SPA: Royal Bank of Canada Insured: GNMA/FNMA/FHLMC 0.030% 01/01/46 (09/03/15) (a)(b) | 6,075,000 | 6,075,000 | |||||||||
MN New London-Spicer Independent School District No 345 | |||||||||||
Series 2014 | |||||||||||
Credit Support: Minnesota School District Credit Enhancement Program 1.250% 09/24/15 | 2,240,000 | 2,241,405 | |||||||||
MN Oakdale | |||||||||||
Cottages of Aspen LP, | |||||||||||
Series 2008 AMT, LOC: FHLMC 0.070% 06/01/45 (09/03/15) (a)(b) | 4,100,000 | 4,100,000 | |||||||||
MN Office of Higher Education | |||||||||||
Series 2008 B, AMT, | |||||||||||
LOC: U.S. Bank N.A. 0.020% 12/01/43 (09/03/15) (a)(b) | 7,750,000 | 7,750,000 | |||||||||
Series 2011 B AMT, | |||||||||||
LOC: State Street Bank & Trust Co. 0.020% 10/01/46 (09/03/15) (a)(b) | 16,000,000 | 16,000,000 | |||||||||
MN State Colleges & Universities | |||||||||||
Series 2005 A | |||||||||||
Pre-refunded 10/01/15, Escrowed in U.S. Treasuries 5.000% 10/01/19 | 1,030,000 | 1,033,934 | |||||||||
Minnesota Total | 51,097,040 | ||||||||||
Mississippi – 0.7% | |||||||||||
MS Business Finance Corp. | |||||||||||
Chevron U.S.A., Inc, | |||||||||||
Series 2011 C GTY AGMT: Chevron Corp. 0.010% 11/01/35 (09/01/15) (a)(b) | 1,180,000 | 1,180,000 | |||||||||
Chevron U.S.A., Inc., | |||||||||||
Series 2011 B, GTY AGMT: Chevron Corp. 0.010% 11/01/35 (09/01/15) (a)(b) | 4,000,000 | 4,000,000 |
Par ($) | Value ($) | ||||||||||
Hamlin Sheet Metal Co., Inc. | |||||||||||
Series 2005, AMT, LOC: Branch Banking & Trust 0.130% 03/01/25 (09/03/15) (a)(b) | 2,010,000 | 2,010,000 | |||||||||
Mississippi Total | 7,190,000 | ||||||||||
Missouri – 2.8% | |||||||||||
MO Eclipse Funding Trust | |||||||||||
Series 2006 | |||||||||||
LOC: U.S. Bank N.A. LIQ FAC: U.S. Bank N.A. 0.030% 04/28/16 (09/03/15) (a)(b)(c) | 18,135,000 | 18,135,000 | |||||||||
MO Health & Educational Facilities Authority | |||||||||||
0.100% 09/09/15 | 2,200,000 | 2,200,000 | |||||||||
BJC Healthcare Obligated Group, | |||||||||||
Series 2008 D 0.010% 05/15/38 (09/03/15) (a)(d) | 1,400,000 | 1,400,000 | |||||||||
MO Platte County Industrial Development Authority | |||||||||||
JJJ Enterprise LLC, | |||||||||||
Series 2007 A AMT, LOC: U.S. Bank N.A. 0.040% 01/01/39 (09/03/15) (a)(b) | 6,195,000 | 6,195,000 | |||||||||
MO Springfield Industrial Development Authority | |||||||||||
DMP Properties LLC, | |||||||||||
Series 2001 AMT, LOC: Guaranty Bank 0.070% 08/01/21 (09/03/15) (a)(b) | 1,155,000 | 1,155,000 | |||||||||
Missouri Total | 29,085,000 | ||||||||||
Nebraska – 0.4% | |||||||||||
NE Lincoln Electric System Revenue | |||||||||||
Series 2012 | |||||||||||
4.000% 09/01/15 | 1,250,000 | 1,250,000 | |||||||||
NE Omaha Public Power District | |||||||||||
Series A | |||||||||||
0.120% 10/01/15 | 3,200,000 | 3,200,000 | |||||||||
Nebraska Total | 4,450,000 |
See Accompanying Notes to Financial Statements.
7
BofA Municipal Reserves
August 31, 2015
Municipal Bonds (continued) | |||||||||||
Par ($) | Value ($) | ||||||||||
Nevada – 0.6% | |||||||||||
NV Housing Division | |||||||||||
Sdashs Apartments Ltd., | |||||||||||
Series 2002 A, AMT, LOC: Wells Fargo Bank N.A. 0.170% 04/01/35 (09/03/15) (a)(b) | 3,000,000 | 3,000,000 | |||||||||
NV Reno | |||||||||||
ReTrac-Reno Transportation Rail Access Corridor, | |||||||||||
Series 2008, LOC: Bank of NY Mellon 0.020% 06/01/42 (09/01/15) (a)(b) | 3,010,000 | 3,010,000 | |||||||||
NV Sparks | |||||||||||
Rix Industries, | |||||||||||
Series 2002, AMT, LOC: Wells Fargo Bank N.A. 0.200% 07/01/27 (09/03/15) (a)(b) | 775,000 | 775,000 | |||||||||
Nevada Total | 6,785,000 | ||||||||||
New Hampshire – 0.7% | |||||||||||
NH Health & Education Facilities Authority | |||||||||||
Series 2011 B AMT, | |||||||||||
LOC: Royal Bank of Canada 0.150% 12/01/32 (09/03/15) (a)(b) | 7,379,000 | 7,379,000 | |||||||||
New Hampshire Total | 7,379,000 | ||||||||||
New Jersey – 5.5% | |||||||||||
NJ Borough of Beachwood | |||||||||||
Series 2015 | |||||||||||
1.000% 03/09/16 | 2,000,000 | 2,005,991 | |||||||||
NJ Elizabeth | |||||||||||
Series 2015 | |||||||||||
2.000% 04/01/16 | 1,080,000 | 1,089,703 | |||||||||
NJ RBC Municipal Products, Inc. Trust | |||||||||||
Series 2015 E-61 | |||||||||||
LOC: Royal Bank of Canada LIQ FAC: Royal Bank of Canada 0.110% 06/28/16 (09/03/15) (a)(b)(c) | 20,000,000 | 20,000,000 |
Par ($) | Value ($) | ||||||||||
NJ RIB Floater Trust | |||||||||||
NJ Healthcare Financing Authority | |||||||||||
Series 2013, LOC: Barclays Bank PLC 0.150% 07/03/17 (09/03/15) (a)(b)(c) | 30,455,000 | 30,455,000 | |||||||||
NJ Township of Readington | |||||||||||
Series 2015 | |||||||||||
1.000% 02/04/16 | 3,525,000 | 3,534,791 | |||||||||
New Jersey Total | 57,085,485 | ||||||||||
New York – 7.4% | |||||||||||
NY Arlington Central School District | |||||||||||
Series 2014 | |||||||||||
Insured: State Aid Withholding 1.000% 11/13/15 | 2,031,460 | 2,034,294 | |||||||||
NY Ballston Spa Central School District | |||||||||||
Series 2014 | |||||||||||
Insured: State Aid Withholding 1.000% 09/25/15 | 3,800,000 | 3,801,919 | |||||||||
NY Bedford Central School District | |||||||||||
Series 2015 | |||||||||||
Insured: State Aid Withholding 1.000% 07/15/16 | 3,500,000 | 3,512,228 | |||||||||
NY Fayetteville-Manlius Central School District | |||||||||||
Series 2015 | |||||||||||
Insured: State Aid Withholding 1.250% 06/30/16 | 6,500,000 | 6,536,343 | |||||||||
NY Glens Falls City School District | |||||||||||
Series 2015 | |||||||||||
Insured: State Aid Withholding 1.250% 06/29/16 | 4,000,000 | 4,018,983 | |||||||||
NY Greece Central School District | |||||||||||
Series 2015 | |||||||||||
Insured: State Aid Withholding 1.250% 06/24/16 | 1,600,000 | 1,610,598 | |||||||||
NY Housing Finance Agency | |||||||||||
L&M 93rd Street LLC, | |||||||||||
250 West 93rd St., Series 2005 A, AMT, LOC: Landesbank Hessen-Thüringen: 0.030% 11/01/38 (09/02/15) (a)(b) | 11,050,000 | 11,050,000 | |||||||||
L&M Prospect Plaza LLC, | |||||||||||
Series 2007 A AMT, LOC: Citibank N.A. 0.040% 11/01/39 (09/02/15) (a)(b) | 5,000,000 | 5,000,000 |
See Accompanying Notes to Financial Statements.
8
BofA Municipal Reserves
August 31, 2015
Municipal Bonds (continued) | |||||||||||
Par ($) | Value ($) | ||||||||||
NY Liverpool Central School District | |||||||||||
Series 2014 B, | |||||||||||
Insured: State Aid Withholding 1.000% 10/02/15 | 1,835,194 | 1,836,375 | |||||||||
NY Longwood Central School District Suffolk County | |||||||||||
Series 2015 | |||||||||||
Insured: State Aid Withholding 2.000% 06/17/16 | 3,325,000 | 3,368,034 | |||||||||
NY New York City Municipal Water Finance Authority | |||||||||||
Second Generation Resolution, | |||||||||||
Series 2005 B, SPA: California State Teachers Retirement 0.010% 06/15/32 (09/01/15) (a)(b) | 3,770,000 | 3,770,000 | |||||||||
NY New York City Transitional Finance Authority Future Tax Secured Revenue | |||||||||||
NYC Recovery, | |||||||||||
Series 2002 1D, SPA: Landesbank Hessen-Thüringen 0.010% 11/01/22 (09/01/15) (a)(b) | 7,200,000 | 7,200,000 | |||||||||
NY North Shore Central School District | |||||||||||
Series 2015 | |||||||||||
Insured: State Aid Withholding 1.500% 06/21/16 | 5,000,000 | 5,035,866 | |||||||||
NY Shenendehowa Central School District | |||||||||||
Series 2015 | |||||||||||
Insured: State Aid Withholding 1.500% 06/24/16 | 3,612,551 | 3,642,299 | |||||||||
NY Town of Amherst | |||||||||||
Series 2014 | |||||||||||
0.750% 11/12/15 | 8,000,000 | 8,008,017 | |||||||||
NY Town of Cheektowaga | |||||||||||
Series 2015 | |||||||||||
1.000% 07/14/16 | 2,018,000 | 2,027,394 | |||||||||
NY White Plains City School District | |||||||||||
Series 2015 | |||||||||||
Insured: State Aid Withholding 0.490% 06/25/16 | 5,400,000 | 5,400,000 | |||||||||
New York Total | 77,852,350 | ||||||||||
North Carolina – 2.0% | |||||||||||
NC Charlotte-Mecklenburg Hospital Authority | |||||||||||
Series 2007 E, | |||||||||||
LOC: TD Bank N.A. 0.010% 01/15/44 (09/03/15) (a)(b) | 4,120,000 | 4,120,000 |
Par ($) | Value ($) | ||||||||||
NC Guilford County Industrial Facilities & Pollution Control Financing Authority | |||||||||||
ABCO Automation, Inc., | |||||||||||
Series 2001, AMT, LOC: Wells Fargo Bank N.A. 0.150% 07/01/21 (09/03/15) (a)(b) | 900,000 | 900,000 | |||||||||
Snider Tire, Inc., | |||||||||||
Series 1999, AMT, LOC: Wells Fargo Bank N.A. 0.230% 10/01/19 (09/03/15) (a)(b) | 800,000 | 800,000 | |||||||||
NC Rowan County Industrial Facilities & Pollution Control Financing Authority | |||||||||||
DDSM Properties LLC, | |||||||||||
Series 2008, AMT, LOC: Wells Fargo Bank N.A. 0.150% 01/01/28 (09/03/15) (a)(b) | 3,695,000 | 3,695,000 | |||||||||
NC Stanly County Industrial Facilities & Pollution Control Financing Authority | |||||||||||
Chicago Tube & Iron Co., | |||||||||||
Series 2008, LOC: JPMorgan Chase Bank 0.110% 04/01/18 (09/03/15) (a)(b) | 2,690,000 | 2,690,000 | |||||||||
NC Yancey County Industrial Facilities & Pollution Control Financing Authority | |||||||||||
Altec Industries, Inc., | |||||||||||
Series 2007, AMT, LOC: Branch Banking & Trust 0.080% 03/01/27 (09/03/15) (a)(b) | 8,500,000 | 8,500,000 | |||||||||
North Carolina Total | 20,705,000 | ||||||||||
North Dakota – 0.2% | |||||||||||
ND Housing Finance Agency | |||||||||||
Meadowlark Heights Apts | |||||||||||
Series 2015 0.400% 09/01/16 | 2,000,000 | 2,000,000 | |||||||||
North Dakota Total | 2,000,000 |
See Accompanying Notes to Financial Statements.
9
BofA Municipal Reserves
August 31, 2015
Municipal Bonds (continued) | |||||||||||
Par ($) | Value ($) | ||||||||||
Ohio – 0.5% | |||||||||||
OH Cuyahoga County | |||||||||||
Corporate Wings, | |||||||||||
Series 2005, AMT, LOC: U.S. Bank N.A. 0.100% 04/01/25 (09/03/15) (a)(b) | 1,955,000 | 1,955,000 | |||||||||
OH Solon | |||||||||||
JTM Products, Inc., Project, | |||||||||||
Series 2001, AMT, LOC: PNC Bank N.A. 0.120% 06/01/21 (09/03/15) (a)(b) | 865,000 | 865,000 | |||||||||
OH State | |||||||||||
Series 2014 | |||||||||||
1.000% 12/15/15 | 2,500,000 | 2,505,090 | |||||||||
Ohio Total | 5,325,090 | ||||||||||
Oregon – 1.9% | |||||||||||
OR Business Development Commission | |||||||||||
Murphy Co., | |||||||||||
Series 2011 230, AMT, LOC: U.S. Bank N.A. 0.040% 04/01/41 (09/02/15) (a)(b) | 6,000,000 | 6,000,000 | |||||||||
OR Housing & Community Services Department | |||||||||||
Series 2015 C, AMT | |||||||||||
SPA: State Street Bank & Trust Co. 1.000% 07/01/45 (09/01/15) (a)(b) | 13,500,000 | 13,500,000 | |||||||||
Oregon Total | 19,500,000 | ||||||||||
Pennsylvania – 1.9% | |||||||||||
PA Economic Development Financing Authority | |||||||||||
Pittsburgh Allegheny County, | |||||||||||
Series 2002 A3, AMT, LOC: PNC Bank N.A. 0.170% 04/01/22 (09/03/15) (a)(b) | 700,000 | 700,000 | |||||||||
PA Lawrence County Industrial Development Authority | |||||||||||
Doren, Inc., | |||||||||||
Series 2004, AMT, LOC: PNC Bank N.A. 0.170% 12/01/15 (09/03/15) (a)(b) | 1,700,000 | 1,700,000 |
Par ($) | Value ($) | ||||||||||
PA RBC Municipal Products, Inc. Trust | |||||||||||
Series 2015 E-53 | |||||||||||
LOC: Royal Bank of Canada LIQ FAC: Royal Bank of Canada 0.110% 12/01/18 (09/03/15) (a)(b)(c) | 17,700,000 | 17,700,000 | |||||||||
Pennsylvania Total | 20,100,000 | ||||||||||
South Carolina – 0.7% | |||||||||||
SC Jobs-Economic Development Authority | |||||||||||
Bondex/Hightower Group Obligated Group, | |||||||||||
Series 2007 AMT, LOC: Branch Banking & Trust 0.250% 06/01/23 (09/03/15) (a)(b) | 1,220,000 | 1,220,000 | |||||||||
DCS Diversified Coating, | |||||||||||
Series 2002, AMT, LOC: Branch Banking & Trust 0.080% 04/01/17 (09/03/15) (a)(b) | 450,000 | 450,000 | |||||||||
Dorris Properties LLC, | |||||||||||
Series 2006 AMT, LOC: TD Bank N.A. 0.150% 07/01/32 (09/03/15) (a)(b) | 2,400,000 | 2,400,000 | |||||||||
Watson Engineering, Inc., | |||||||||||
Series 2007, AMT, LOC: PNC Bank N.A. 0.120% 09/01/27 (09/03/15) (a)(b) | 3,165,000 | 3,165,000 | |||||||||
South Carolina Total | 7,235,000 | ||||||||||
South Dakota – 1.5% | |||||||||||
SD Housing Development Authority | |||||||||||
Series 2007 I, AMT, | |||||||||||
SPA: FHLB 0.030% 05/01/38 (09/03/15) (a)(b) | 16,000,000 | 16,000,000 | |||||||||
South Dakota Total | 16,000,000 |
See Accompanying Notes to Financial Statements.
10
BofA Municipal Reserves
August 31, 2015
Municipal Bonds (continued) | |||||||||||
Par ($) | Value ($) | ||||||||||
Tennessee – 0.5% | |||||||||||
TN Metropolitan Government Nashville & Davidson County | |||||||||||
Health & Educational Facilities Board, Pedcor Investments-2006-XCII LP, Series 2006 A, AMT, LOC: U.S. Bank N.A. 0.040% 12/01/41 (09/03/15) (a)(b) | 5,000,000 | 5,000,000 | |||||||||
Tennessee Total | 5,000,000 | ||||||||||
Texas – 7.4% | |||||||||||
TX Gulf Coast Industrial Development Authority | |||||||||||
Exxon Mobil Corp., | |||||||||||
Series 2012, 0.010% 11/01/41 (09/01/15) (a)(d) | 600,000 | 600,000 | |||||||||
TX Harris County Health Facilities Development Corp. | |||||||||||
The Methodist Hospital, | |||||||||||
Series 2008 A-1, 0.010% 12/01/41 (09/01/15) (a)(d) | 7,000,000 | 7,000,000 | |||||||||
TX Lower Neches Valley Authority Industrial Development Corp. | |||||||||||
Exxon Capital Ventures, Inc., | |||||||||||
ExxonMobil Project, Series 2012, GTY AGMT: Exxon Mobile Corp., 0.010% 05/01/46 (09/01/15) (a)(b) | 5,300,000 | 5,300,000 | |||||||||
TX Port of Port Arthur Navigation District | |||||||||||
DPCE: Total S.A.: | |||||||||||
Series 1998, AMT, 0.050% 05/01/33 (09/02/15) (a)(d) | 17,825,000 | 17,825,000 | |||||||||
Series 2000 B, AMT, 0.050% 05/01/35 (09/02/15) (a)(d) | 10,000,000 | 10,000,000 | |||||||||
TX RIB Floater Trust | |||||||||||
Series 2015 | |||||||||||
LOC: Barclays Bank PLC 0.170% 07/01/18 (09/03/15) (a)(b)(c) | 9,500,000 | 9,500,000 | |||||||||
TX State | |||||||||||
Series 2002 A-2 AMT, | |||||||||||
SPA: Landesbank Hessen-Thuringen: 0.030% 06/01/25 (09/02/15) (a)(b) | 7,230,000 | 7,230,000 | |||||||||
0.030% 06/01/33 (09/02/15) (a)(b) | 8,650,000 | 8,650,000 |
Par ($) | Value ($) | ||||||||||
Series 2003 A, AMT, | |||||||||||
LOC: Landesbank Hessen-Thuringen 0.040% 06/01/34 (09/02/15) (a)(b) | 9,600,000 | 9,600,000 | |||||||||
TX University of Texas | |||||||||||
Series 2008 B | |||||||||||
LIQ FAC: University of Texas Investment Management Co. 0.010% 08/01/39 (09/03/15) (a)(b) | 1,900,000 | 1,900,000 | |||||||||
Texas Total | 77,605,000 | ||||||||||
Utah – 0.2% | |||||||||||
UT Murray | |||||||||||
IHC Health Services, Inc., | |||||||||||
Series 2005 D, SPA: Wells Fargo Bank N.A. 0.010% 05/15/37 (09/01/15) (a)(b) | 1,800,000 | 1,800,000 | |||||||||
Utah Total | 1,800,000 | ||||||||||
Virginia – 0.1% | |||||||||||
VA Fairfax County Economic Development Authority | |||||||||||
Szivic Family LLC, | |||||||||||
Series 2006, AMT, LOC: Branch Banking & Trust 0.180% 09/01/26 (09/03/15) (a)(b) | 1,200,000 | 1,200,000 | |||||||||
Virginia Total | 1,200,000 | ||||||||||
Washington – 3.3% | |||||||||||
WA Benton County School District No 17 Kennewick | |||||||||||
Washington State School Board Credit Enhancement Program | |||||||||||
Series 2009 5.000% 12/01/15 | 1,360,000 | 1,375,959 | |||||||||
WA Eclipse Funding Trust | |||||||||||
King County, | |||||||||||
Series 2007, LOC: U.S. Bank N.A. 0.070% 12/01/31 (09/03/15) (a)(b)(c) | 9,945,000 | 9,945,000 | |||||||||
WA Economic Development Finance Authority | |||||||||||
RMI Investors LLC, | |||||||||||
Series 2001 F, AMT, LOC: Wells Fargo Bank N.A. 0.150% 08/01/26 (09/03/15) (a)(b) | 2,220,000 | 2,220,000 |
See Accompanying Notes to Financial Statements.
11
BofA Municipal Reserves
August 31, 2015
Municipal Bonds (continued) | |||||||||||
Par ($) | Value ($) | ||||||||||
WA Pierce County Economic Development Corp. | |||||||||||
Sumner Leasing LLC, | |||||||||||
Quality Stamping Project, Series 2006, AMT, LOC: FHLB 0.200% 12/01/36 (09/03/15) (a)(b) | 1,805,000 | 1,805,000 | |||||||||
WA Port of Grays Harbor Industrial Development Corp. | |||||||||||
Murphy Co., | |||||||||||
Series 2007 AMT, LOC: U.S. Bank N.A. 0.040% 11/01/26 (09/03/15) (a)(b) | 10,000,000 | 10,000,000 | |||||||||
WA Port of Seattle Industrial Development Corp. | |||||||||||
Crowley Marine Services, | |||||||||||
Series 2001, AMT, LOC: DNB NOR Bank ASA 0.100% 12/31/21 (09/02/15) (a)(b) | 8,700,000 | 8,700,000 | |||||||||
Washington Total | 34,045,959 | ||||||||||
Wisconsin – 1.4% | |||||||||||
WI Ashland | |||||||||||
Larson-Juhl U.S. LLC, | |||||||||||
Series 2000, AMT, LOC: Wells Fargo Bank N.A. 0.200% 07/01/20 (09/04/15) (a)(b) | 1,665,000 | 1,665,000 | |||||||||
WI Plymouth | |||||||||||
Wisconsin Plastic Products/WIPP Obligated Group, | |||||||||||
Series 1998 AMT, LOC: FHLB 0.070% 05/01/18 (09/03/15) (a)(b) | 1,070,000 | 1,070,000 | |||||||||
WI RIB Floater Trust | |||||||||||
Series 2015 | |||||||||||
LOC: Barclays Bank PLC 0.150% 05/01/18 (09/03/15) (a)(b)(c) | 10,370,000 | 10,370,000 |
Par ($) | Value ($) | ||||||||||
WI Sheboygan Falls | |||||||||||
HTT/Landmark HTT Obligated Group, | |||||||||||
Series 2007 A AMT, LOC: U.S. Bank N.A. 0.070% 01/01/32 (09/03/15) (a)(b) | 1,890,000 | 1,890,000 | |||||||||
Wisconsin Total | 14,995,000 | ||||||||||
Wyoming – 1.1% | |||||||||||
WY Sweetwater County | |||||||||||
PacifiCorp, | |||||||||||
Series 1995, AMT, LOC: Bank of Nova Scotia 0.020% 11/01/25 (09/01/15) (a)(b) | 11,500,000 | 11,500,000 | |||||||||
Wyoming Total | 11,500,000 | ||||||||||
Total Municipal Bonds (cost of $827,244,089) | 827,244,089 | ||||||||||
Closed-End Investment Companies – 18.8% | |||||||||||
Other – 18.8% | |||||||||||
Nuveen Municipal Opportunity Fund, Inc. | |||||||||||
Series 2010, AMT, | |||||||||||
LIQ FAC: Citibank N.A. 0.110% 12/01/40 (09/03/15) (a)(b)(c) | 85,000,000 | 85,000,000 | |||||||||
Nuveen Premium Income Municipal Fund 4, Inc. | |||||||||||
Series 2010, AMT, | |||||||||||
LIQ FAC: JPMorgan Chase Bank 0.100% 03/01/40 (09/03/15) (a)(b)(c) | 77,200,000 | 77,200,000 | |||||||||
Nuveen Quality Income Municipal Fund, Inc. | |||||||||||
Series 2010, | |||||||||||
LIQ FAC: JPMorgan Chase Bank 0.100% 12/01/40 (09/03/15) (a)(b)(c) | 34,600,000 | 34,600,000 | |||||||||
Other Total | 196,800,000 | ||||||||||
Total Closed-End Investment Companies (cost of $196,800,000) | 196,800,000 |
See Accompanying Notes to Financial Statements.
12
BofA Municipal Reserves
August 31, 2015
Total Short-Term Obligation – 3.0% | |||||||||||
Par ($) | Value ($) | ||||||||||
Variable Rate Demand Notes – 3.0% | |||||||||||
FHLMC Multi-Family VRD Certificates | |||||||||||
3.625% 08/15/51 | 31,000,000 | 31,038,228 | |||||||||
Variable Rate Demand Notes Total | 31,038,228 | ||||||||||
Total Short-Term Obligation (cost of $31,038,228) | 31,038,228 | ||||||||||
Total Investments – 100.8% (cost of $1,055,082,317) (f) | 1,055,082,317 | ||||||||||
Other Assets & Liabilities, Net – (0.8)% | (8,465,317 | ) | |||||||||
Net Assets – 100.0% | 1,046,617,000 |
Notes to Investment Portfolio:
Portfolio holdings are subject to change periodically and may not be representative of current holdings.
(a) Parenthetical date represents the effective maturity date for the security which may represent the demand date for puttable or callable securities or the prerefunded date for certain securities where applicable.
(b) Variable rate obligations have long dated final maturities, however, their effective maturity is within 397 days in accordance with a demand feature. These securities are secured by a letter of credit or other credit support agreements from banks. These securities are puttable upon not more than one, seven or thirty business days' notice. Put bonds and notes have a demand feature that matures within one year. The interest rate is changed periodically and the interest rate reflects the rate at August 31, 2015.
(c) Security exempt from registration pursuant to Rule 144A under the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At August 31, 2015, these securities, which are not illiquid, amounted to $345,695,000 or 33.0% 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 August 31, 2015.
(e) Security purchased on a delayed delivery basis and, as such, payment for and delivery of the security has not yet taken place. Generally, no interest will accrue to the Fund until the security is delivered.
(f) Cost for federal income tax purposes is $1,055,082,317.
The following table summarizes the inputs used, as of August 31, 2015, 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 | $ | — | $ | 827,244,089 | $ | — | $ | 827,244,089 | |||||||||||
Total Closed-End Investment Companies | — | 196,800,000 | — | 196,800,000 | |||||||||||||||
Total Short-Term Obligation | — | 31,038,228 | — | 31,038,228 | |||||||||||||||
Total Investments | $ | — | $ | 1,055,082,317 | $ | — | $ | 1,055,082,317 |
The Fund's assets are assigned to the Level 2 input category which represents short-term obligations which are valued using amortized cost, an income approach which converts future cash flows to a present value based upon the discount or premium at purchase.
For the year ended August 31, 2015, all of the securities held in the Portfolio were Level 2 and there were no transfers to report.
For more information on valuation inputs, please refer to the Security Valuation section in the accompanying Notes to Financial Statements.
At August 31, 2015, the asset allocation of the Fund is as follows:
Asset Allocation | % of Net Assets | ||||||
Municipal Bonds | 79.0 | ||||||
Closed-End Investment Companies | 18.8 | ||||||
97.8 | |||||||
Short-Term Obligation | 3.0 | ||||||
Other Assets & Liabilities, Net | (0.8 | ) | |||||
100.0 |
Acronym | Name | ||||||
AMT | Alternative Minimum Tax | ||||||
DPCE | Direct Pay Credit Enhancement | ||||||
FHLB | Federal Home Loan Bank | ||||||
FHLMC | Federal Home Loan Mortgage Corp. | ||||||
FNMA | Federal National Mortgage Association | ||||||
GNMA | Government National Mortgage Association | ||||||
GTY AGMT | Guaranty Agreement | ||||||
LIQ FAC | Liquidity Facility | ||||||
LOC | Letter of Credit | ||||||
MERLOTs | Municipal Exempt Receipts – Liquidity Optional Tender Series | ||||||
RIB | Residual Interest Bond | ||||||
SPA | Stand-by Purchase Agreement |
See Accompanying Notes to Financial Statements.
13
Statement of Assets and Liabilities – BofA Municipal Reserves
August 31, 2015
($) | |||||||||||
Assets | Investments, at amortized cost approximating value | 1,055,082,317 | |||||||||
Cash | 11,072,431 | ||||||||||
Receivable for: | |||||||||||
Fund shares sold | 1,000 | ||||||||||
Interest | 938,190 | ||||||||||
Expense reimbursement due from investment advisor | 28,345 | ||||||||||
Trustees' deferred compensation plan | 11,142 | ||||||||||
Prepaid expenses | 12,052 | ||||||||||
Total Assets | 1,067,145,477 | ||||||||||
Liabilities | Payable for: | ||||||||||
Investments purchased | 13,500,000 | ||||||||||
Investments purchased on a delayed delivery basis | 6,793,424 | ||||||||||
Investment advisory fee | 66,496 | ||||||||||
Administration fee | 23,791 | ||||||||||
Pricing and bookkeeping fees | 13,471 | ||||||||||
Transfer agent fee | 2,184 | ||||||||||
Trustees' fees | 3,152 | ||||||||||
Audit fee | 48,327 | ||||||||||
Custody fee | 5,335 | ||||||||||
Chief Compliance Officer expenses | 1,498 | ||||||||||
Trustees' deferred compensation plan | 11,142 | ||||||||||
Other liabilities | 59,657 | ||||||||||
Total Liabilities | 20,528,477 | ||||||||||
Net Assets | 1,046,617,000 | ||||||||||
Net Assets Consist of | Paid-in capital | 1,046,787,553 | |||||||||
Undistributed net investment income | 65,702 | ||||||||||
Accumulated net realized loss | (236,255 | ) | |||||||||
Net Assets | 1,046,617,000 |
See Accompanying Notes to Financial Statements.
14
Statement of Assets and Liabilities (continued) – BofA Municipal Reserves
August 31, 2015
Adviser Class Shares | Net assets | $ | 10,747,371 | ||||||||
Shares outstanding | 10,745,071 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Capital Class Shares | Net assets | $ | 370,475,434 | ||||||||
Shares outstanding | 370,400,810 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Daily Class Shares | Net assets | $ | 27,926,832 | ||||||||
Shares outstanding | 27,921,166 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Institutional Capital Shares | Net assets | $ | 16,557,105 | ||||||||
Shares outstanding | 16,553,744 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Institutional Class Shares | Net assets | $ | 16,914,171 | ||||||||
Shares outstanding | 16,910,540 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Investor Class Shares | Net assets | $ | 146,998 | ||||||||
Shares outstanding | 146,968 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Liquidity Class Shares | Net assets | $ | 76,938 | ||||||||
Shares outstanding | 76,923 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Trust Class Shares | Net assets | $ | 603,772,151 | ||||||||
Shares outstanding | 603,650,016 | ||||||||||
Net asset value per share | $ | 1.00 |
See Accompanying Notes to Financial Statements.
15
Statement of Operations – BofA Municipal Reserves
For the Year Ended August 31, 2015
($) | |||||||||||
Investment Income | Interest | 1,343,193 | |||||||||
Expenses | Investment advisory fee | 1,532,001 | |||||||||
Administration fee | 881,334 | ||||||||||
Distribution fee: | |||||||||||
Daily Class Shares | 103,514 | ||||||||||
Investor Class Shares | 147 | ||||||||||
Service fee: | |||||||||||
Adviser Class Shares | 54,633 | ||||||||||
Daily Class Shares | 73,938 | ||||||||||
Investor Class Shares | 369 | ||||||||||
Liquidity Class Shares | 192 | ||||||||||
Shareholder administration fee: | |||||||||||
Institutional Class Shares | 5,513 | ||||||||||
Trust Class Shares | 571,320 | ||||||||||
Transfer agent fee | 34,494 | ||||||||||
Pricing and bookkeeping fees | 148,506 | ||||||||||
Trustees' fees | 35,443 | ||||||||||
Custody fee | 17,786 | ||||||||||
Chief Compliance Officer expenses | 8,928 | ||||||||||
Other expenses | 362,120 | ||||||||||
Total Expenses | 3,830,238 | ||||||||||
Fees waived or expenses reimbursed by investment advisor and/or administrator | (1,678,145 | ) | |||||||||
Fees waived by distributor: | |||||||||||
Adviser Class Shares | (54,581 | ) | |||||||||
Daily Class Shares | (177,348 | ) | |||||||||
Institutional Class Shares | (5,378 | ) | |||||||||
Investor Class Shares | (514 | ) | |||||||||
Liquidity Class Shares | (192 | ) | |||||||||
Trust Class Shares | (570,896 | ) | |||||||||
Net Expenses | 1,343,184 | ||||||||||
Net Investment Income | 9 | ||||||||||
Net realized gain on investments | 36,342 | ||||||||||
Net Increase Resulting from Operations | 36,351 |
See Accompanying Notes to Financial Statements.
16
Statement of Changes in Net Assets – BofA Municipal Reserves
Year Ended August 31, | |||||||||||||||
Increase (Decrease) in Net Assets | 2015 ($) | 2014 ($) | |||||||||||||
Operations | Net investment income | 9 | — | ||||||||||||
Net realized gain on investments | 36,342 | 29,268 | |||||||||||||
Net increase resulting from operations | 36,351 | 29,268 | |||||||||||||
Distributions to Shareholders | From net investment income: | ||||||||||||||
Adviser Class Shares | (2,621 | ) | — | ||||||||||||
Capital Class Shares | (34,633 | ) | — | ||||||||||||
Daily Class Shares | (2,903 | ) | — | ||||||||||||
Institutional Capital Shares | (1,635 | ) | — | ||||||||||||
Institutional Class Shares | (515 | ) | — | ||||||||||||
Investor Class | (13 | ) | — | ||||||||||||
Liquidity Class Shares | (7 | ) | — | ||||||||||||
Trust Class Shares | (46,120 | ) | — | ||||||||||||
Total distributions to shareholders | (88,447 | ) | — | ||||||||||||
Net Capital Stock Transactions | 56,856,700 | (411,986,076 | ) | ||||||||||||
Total increase (decrease) in net assets | 56,804,604 | (411,956,808 | ) | ||||||||||||
Net Assets | Beginning of period | 989,812,396 | 1,401,769,204 | ||||||||||||
End of period | 1,046,617,000 | 989,812,396 | |||||||||||||
Undistributed net investment income at end of period | 65,702 | 88,460 |
See Accompanying Notes to Financial Statements.
17
Statement of Changes in Net Assets (continued) – BofA Municipal Reserves
Capital Stock Activity | |||||||||||||||||||
Year Ended August 31, | |||||||||||||||||||
2015 | 2014 | ||||||||||||||||||
Shares | Dollars ($) | Shares | Dollars ($) | ||||||||||||||||
Adviser Class Shares | |||||||||||||||||||
Subscriptions | 83,000,444 | 83,000,444 | 299,107,499 | 299,107,499 | |||||||||||||||
Distributions reinvested | 384 | 384 | — | — | |||||||||||||||
Redemptions | (109,960,744 | ) | (109,960,744 | ) | (288,914,688 | ) | (288,914,688 | ) | |||||||||||
Net increase (decrease) | (26,959,916 | ) | (26,959,916 | ) | 10,192,811 | 10,192,811 | |||||||||||||
Capital Class Shares | |||||||||||||||||||
Subscriptions | 776,312,027 | 776,312,027 | 827,315,416 | 827,315,416 | |||||||||||||||
Distributions reinvested | 4,473 | 4,473 | — | — | |||||||||||||||
Redemptions | (774,314,042 | ) | (774,314,042 | ) | (1,129,796,747 | ) | (1,129,796,747 | ) | |||||||||||
Net increase (decrease) | 2,002,458 | 2,002,458 | (302,481,331 | ) | (302,481,331 | ) | |||||||||||||
Daily Class Shares | |||||||||||||||||||
Subscriptions | 14,824,179 | 14,824,179 | 207,626 | 207,626 | |||||||||||||||
Distributions reinvested | 1 | 1 | — | — | |||||||||||||||
Redemptions | (6,189,931 | ) | (6,189,931 | ) | (6,677,278 | ) | (6,677,278 | ) | |||||||||||
Net increase (decrease) | 8,634,249 | 8,634,249 | (6,469,652 | ) | (6,469,652 | ) | |||||||||||||
Institutional Capital Shares | |||||||||||||||||||
Subscriptions | 2,082,070 | 2,082,070 | 2,455,970 | 2,455,970 | |||||||||||||||
Distributions reinvested | 1,077 | 1,077 | — | — | |||||||||||||||
Redemptions | (4,230,019 | ) | (4,230,019 | ) | (15,439,333 | ) | (15,439,333 | ) | |||||||||||
Net decrease | (2,146,872 | ) | (2,146,872 | ) | (12,983,363 | ) | (12,983,363 | ) | |||||||||||
Institutional Class Shares | |||||||||||||||||||
Subscriptions | 48,633,414 | 48,633,414 | 30,210,000 | 30,210,000 | |||||||||||||||
Distributions reinvested | 400 | 400 | — | — | |||||||||||||||
Redemptions | (45,758,339 | ) | (45,758,339 | ) | (38,263,755 | ) | (38,263,755 | ) | |||||||||||
Net increase (decrease) | 2,875,475 | 2,875,475 | (8,053,755 | ) | (8,053,755 | ) | |||||||||||||
Investor Class Shares | |||||||||||||||||||
Distributions reinvested | 13 | 13 | — | — | |||||||||||||||
Redemptions | (5,999 | ) | (5,999 | ) | (92,757 | ) | (92,757 | ) | |||||||||||
Net decrease | (5,986 | ) | (5,986 | ) | (92,757 | ) | (92,757 | ) | |||||||||||
Liquidity Class Shares | |||||||||||||||||||
Subscriptions | — | — | 10,000 | 10,000 | |||||||||||||||
Distributions reinvested | 7 | 7 | — | — | |||||||||||||||
Redemptions | — | — | (5,495,003 | ) | (5,495,003 | ) | |||||||||||||
Net increase (decrease) | 7 | 7 | (5,485,003 | ) | (5,485,003 | ) | |||||||||||||
Trust Class Shares | |||||||||||||||||||
Subscriptions | 696,797,111 | 696,797,111 | 879,849,557 | 879,849,557 | |||||||||||||||
Redemptions | (624,339,826 | ) | (624,339,826 | ) | (966,462,583 | ) | (966,462,583 | ) | |||||||||||
Net increase (decrease) | 72,457,285 | 72,457,285 | (86,613,026 | ) | (86,613,026 | ) |
See Accompanying Notes to Financial Statements.
18
Financial Highlights – BofA Municipal Reserves
Selected data for a share outstanding throughout each period is as follows:
Year Ended August 31, | |||||||||||||||||||||||
Adviser Class Shares | 2015 | 2014 | 2013 | 2012 | 2011 | ||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||
Net investment income | — | (a) | — | — | — | (a) | — | (a) | |||||||||||||||
Net realized gain (loss) on investments | — | (a) | — | (a) | — | (a) | — | — | |||||||||||||||
Total from investment operations | — | (a) | — | (a) | — | (a) | — | (a) | — | (a) | |||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||
From net investment income | — | (a) | — | — | (a) | — | (a) | — | |||||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Total return (b)(c) | 0.01 | % | 0.00 | % | 0.04 | %(d) | 0.00 | %(e) | 0.00 | % | |||||||||||||
Ratios to Average Net Assets/Supplemental Data: | |||||||||||||||||||||||
Gross expenses | 0.55 | % | 0.54 | % | 0.53 | % | 0.52 | % | 0.52 | % | |||||||||||||
Net expenses | 0.13 | % | 0.16 | % | 0.22 | %(f) | 0.29 | %(f) | 0.34 | %(f) | |||||||||||||
Waiver/Reimbursement | 0.42 | % | 0.38 | % | 0.31 | % | 0.23 | % | 0.18 | % | |||||||||||||
Net investment income | — | %(e) | — | — | (f) | — | %(e)(f) | — | %(e)(f) | ||||||||||||||
Net assets, end of period (000s) | $ | 10,747 | $ | 37,715 | $ | 27,518 | $ | 50,243 | $ | 168,505 |
Past performance is no guarantee of future results.
(a) Rounds to less than $0.001 per share.
(b) Total return at net asset value assuming all distributions reinvested.
(c) 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.
(d) 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.
(e) Rounds to less than 0.01%.
(f) 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:
Year Ended August 31, | |||||||||||||||||||||||
Capital Class Shares | 2015 | 2014 | 2013 | 2012 | 2011 | ||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||
Net investment income | — | (a) | — | — | (a) | 0.001 | 0.001 | ||||||||||||||||
Net realized gain (loss) on investments | — | (a) | — | (a) | — | (a) | — | — | |||||||||||||||
Total from investment operations | — | (a) | — | (a) | — | (a) | 0.001 | 0.001 | |||||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||
From net investment income | — | (a) | — | — | (a) | (0.001 | ) | (0.001 | ) | ||||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Total return (b)(c) | 0.01 | % | 0.00 | % | 0.07 | %(d) | 0.09 | % | 0.14 | % | |||||||||||||
Ratios to Average Net Assets/Supplemental Data: | |||||||||||||||||||||||
Gross expenses | 0.30 | % | 0.29 | % | 0.28 | % | 0.27 | % | 0.27 | % | |||||||||||||
Net expenses | 0.13 | % | 0.16 | % | 0.20 | %(e) | 0.20 | %(e) | 0.20 | %(e) | |||||||||||||
Waiver/Reimbursement | 0.17 | % | 0.13 | % | 0.08 | % | 0.07 | % | 0.07 | % | |||||||||||||
Net investment income | — | %(f) | — | 0.04 | %(e) | 0.09 | %(e) | 0.14 | %(e) | ||||||||||||||
Net assets, end of period (000s) | $ | 370,475 | $ | 368,501 | $ | 670,991 | $ | 1,814,346 | $ | 2,825,365 |
Past performance is no guarantee of future results.
(a) Rounds to less than $0.001 per share.
(b) Total return at net asset value assuming all distributions reinvested.
(c) 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.
(d) 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.
(e) The benefits derived from expense reductions had an impact of less than 0.01%.
(f) Rounds to 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:
Year Ended August 31, | |||||||||||||||||||||||
Daily Class Shares | 2015 | 2014 | 2013 | 2012 | 2011 | ||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||
Net investment income | — | (a) | — | — | — | (a) | — | (a) | |||||||||||||||
Net realized gain (loss) on investments | — | (a) | — | (a) | — | (a) | — | — | |||||||||||||||
Total from investment operations | — | (a) | — | (a) | — | (a) | — | (a) | — | (a) | |||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||
From net investment income | — | (a) | — | — | (a) | — | (a) | — | (a) | ||||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Total return (b)(c) | 0.01 | % | 0.00 | % | 0.04 | %(d) | 0.00 | %(e) | 0.00 | %(e) | |||||||||||||
Ratios to Average Net Assets/Supplemental Data: | |||||||||||||||||||||||
Gross expenses | 0.90 | % | 0.89 | % | 0.88 | % | 0.87 | % | 0.87 | % | |||||||||||||
Net expenses | 0.13 | % | 0.16 | % | 0.23 | %(f) | 0.29 | %(f) | 0.35 | %(f) | |||||||||||||
Waiver/Reimbursement | 0.77 | % | 0.73 | % | 0.65 | % | 0.58 | % | 0.52 | % | |||||||||||||
Net investment income | — | %(e) | — | — | (f) | — | %(e)(f) | — | %(e)(f) | ||||||||||||||
Net assets, end of period (000s) | $ | 27,927 | $ | 19,292 | $ | 25,761 | $ | 40,160 | $ | 88,455 |
Past performance is no guarantee of future results.
(a) Rounds to less than $0.001 per share.
(b) Total return at net asset value assuming all distributions reinvested.
(c) 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.
(d) 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.
(e) Rounds to less than 0.01%.
(f) The benefits derived from expense reductions had an impact of less than 0.01%.
See Accompanying Notes to Financial Statements.
21
Financial Highlights – BofA Municipal Reserves
Selected data for a share outstanding throughout each period is as follows:
Year Ended August 31, | |||||||||||||||||||||||
Institutional Capital Shares | 2015 | 2014 | 2013 | 2012(a) | 2011 | ||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||
Net investment income | — | (b) | — | — | (b) | 0.001 | 0.001 | ||||||||||||||||
Net realized gain (loss) on investments | — | (b) | — | (b) | — | (b) | — | — | |||||||||||||||
Total from investment operations | — | (b) | — | (b) | — | (b) | 0.001 | 0.001 | |||||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||
From net investment income | — | (b) | — | — | (b) | (0.001 | ) | (0.001 | ) | ||||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Total return (c)(d) | 0.01 | % | 0.00 | % | 0.07 | %(e) | 0.09 | % | 0.14 | % | |||||||||||||
Ratios to Average Net Assets/Supplemental Data: | |||||||||||||||||||||||
Gross expenses | 0.30 | % | 0.29 | % | 0.28 | % | 0.27 | % | 0.27 | % | |||||||||||||
Net expenses | 0.13 | % | 0.16 | % | 0.19 | %(f)(g) | 0.20 | %(g) | 0.20 | %(g) | |||||||||||||
Waiver/Reimbursement | 0.17 | % | 0.13 | % | 0.09 | % | 0.07 | % | 0.07 | % | |||||||||||||
Net investment income | — | %(h) | — | 0.03 | %(g) | 0.09 | %(g) | 0.14 | %(g) | ||||||||||||||
Net assets, end of period (000s) | $ | 16,557 | $ | 18,705 | $ | 31,689 | $ | 29,978 | $ | 21,696 |
Past performance is no guarantee of future results.
(a) On October 1, 2011, Class Z shares were converted to Institutional Capital shares.
(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) 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.
(f) 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.
(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.
22
Financial Highlights – BofA Municipal Reserves
Selected data for a share outstanding throughout each period is as follows:
Year Ended August 31, | |||||||||||||||||||||||
Institutional Class Shares | 2015 | 2014 | 2013 | 2012 | 2011 | ||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||
Net investment income | — | (a) | — | — | (a) | 0.001 | 0.001 | ||||||||||||||||
Net realized gain (loss) on investments | — | (a) | — | (a) | — | (a) | — | — | |||||||||||||||
Total from investment operations | — | (a) | — | (a) | — | (a) | 0.001 | 0.001 | |||||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||
From net investment income | — | (a) | — | — | (a) | (0.001 | ) | (0.001 | ) | ||||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Total return (b)(c) | 0.01 | % | 0.00 | % | 0.05 | %(d) | 0.05 | % | 0.10 | % | |||||||||||||
Ratios to Average Net Assets/Supplemental Data: | |||||||||||||||||||||||
Gross expenses | 0.34 | % | 0.33 | % | 0.32 | % | 0.31 | % | 0.31 | % | |||||||||||||
Net expenses | 0.14 | % | 0.16 | % | 0.22 | %(e) | 0.24 | %(e) | 0.24 | %(e) | |||||||||||||
Waiver/Reimbursement | 0.20 | % | 0.17 | % | 0.10 | % | 0.07 | % | 0.07 | % | |||||||||||||
Net investment income | — | %(f) | — | 0.02 | %(e) | 0.05 | %(e) | 0.10 | %(e) | ||||||||||||||
Net assets, end of period (000s) | $ | 16,914 | $ | 14,039 | $ | 22,092 | $ | 89,248 | $ | 159,867 |
Past performance is no guarantee of future results.
(a) Rounds to less than $0.001 per share.
(b) Total return at net asset value assuming all distributions reinvested.
(c) 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.
(d) 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.
(e) The benefits derived from expense reductions had an impact of less than 0.01%.
(f) Rounds to less than 0.01%.
See Accompanying Notes to Financial Statements.
23
Financial Highlights – BofA Municipal Reserves
Selected data for a share outstanding throughout each period is as follows:
Year Ended August 31, | |||||||||||||||||||||||
Investor Class Shares | 2015 | 2014 | 2013 | 2012 | 2011 | ||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||
Net investment income | — | — | — | — | — | ||||||||||||||||||
Net realized gain (loss) on investments | — | (a) | — | (a) | — | (a) | — | — | |||||||||||||||
Total from investment operations | — | (a) | — | (a) | — | (a) | — | — | |||||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||
From net investment income | — | (a) | — | — | (a) | — | — | ||||||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Total return (b)(c) | 0.01 | % | 0.00 | % | 0.04 | %(d) | 0.00 | % | 0.00 | % | |||||||||||||
Ratios to Average Net Assets/Supplemental Data: | |||||||||||||||||||||||
Gross expenses | 0.65 | % | 0.64 | % | 0.63 | % | 0.62 | % | 0.62 | % | |||||||||||||
Net expenses | 0.13 | % | 0.16 | % | 0.23 | %(e) | 0.29 | %(e) | 0.34 | %(e) | |||||||||||||
Waiver/Reimbursement | 0.52 | % | 0.48 | % | 0.40 | % | 0.33 | % | 0.28 | % | |||||||||||||
Net investment income | — | — | — | (e) | — | (e) | — | (e) | |||||||||||||||
Net assets, end of period (000s) | $ | 147 | $ | 153 | $ | 246 | $ | 240 | $ | 218 |
Past performance is no guarantee of future results.
(a) Rounds to less than $0.001 per share.
(b) Total return at net asset value assuming all distributions reinvested.
(c) 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.
(d) 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.
(e) The benefits derived from expense reductions had an impact of less than 0.01%.
See Accompanying Notes to Financial Statements.
24
Financial Highlights – BofA Municipal Reserves
Selected data for a share outstanding throughout each period is as follows:
Year Ended August 31, | |||||||||||||||||||||||
Liquidity Class Shares | 2015 | 2014 | 2013 | 2012 | 2011 | ||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||
Net investment income | — | — | — | — | (a) | — | (a) | ||||||||||||||||
Net realized gain (loss) on investments | — | (a) | — | (a) | — | (a) | — | — | |||||||||||||||
Total from investment operations | — | (a) | — | (a) | — | (a) | — | (a) | — | (a) | |||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||
From net investment income | — | (a) | — | — | (a) | — | (a) | — | (a) | ||||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Total return (b)(c) | 0.01 | % | 0.00 | % | 0.04 | %(d) | 0.00 | %(e) | 0.01 | % | |||||||||||||
Ratios to Average Net Assets/Supplemental Data: | |||||||||||||||||||||||
Gross expenses | 0.55 | % | 0.54 | % | 0.53 | % | 0.52 | % | 0.52 | % | |||||||||||||
Net expenses | 0.13 | % | 0.18 | % | 0.23 | %(f) | 0.29 | %(f) | 0.33 | %(f) | |||||||||||||
Waiver/Reimbursement | 0.42 | % | 0.36 | % | 0.30 | % | 0.23 | % | 0.19 | % | |||||||||||||
Net investment income | — | — | — | (f) | — | %(e)(f) | 0.01 | %(f) | |||||||||||||||
Net assets, end of period (000s) | $ | 77 | $ | 77 | $ | 5,563 | $ | 7,104 | $ | 8,184 |
Past performance is no guarantee of future results.
(a) Rounds to less than $0.001 per share.
(b) Total return at net asset value assuming all distributions reinvested.
(c) 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.
(d) 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.
(e) Rounds to less than 0.01%.
(f) The benefits derived from expense reductions had an impact of less than 0.01%.
See Accompanying Notes to Financial Statements.
25
Financial Highlights – BofA Municipal Reserves
Selected data for a share outstanding throughout each period is as follows:
Year Ended August 31, | |||||||||||||||||||||||
Trust Class Shares | 2015 | 2014 | 2013 | 2012 | 2011 | ||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||
Net investment income | — | (a) | — | — | — | (a) | — | (a) | |||||||||||||||
Net realized gain (loss) on investments | — | (a) | — | (a) | — | (a) | — | — | |||||||||||||||
Total from investment operations | — | (a) | — | (a) | — | (a) | — | (a) | — | (a) | |||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||
From net investment income | — | (a) | — | — | (a) | — | (a) | — | (a) | ||||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Total return (b)(c) | 0.01 | % | 0.00 | % | 0.04 | %(d) | 0.01 | % | 0.05 | % | |||||||||||||
Ratios to Average Net Assets/Supplemental Data: | |||||||||||||||||||||||
Gross expenses | 0.40 | % | 0.39 | % | 0.38 | % | 0.37 | % | 0.37 | % | |||||||||||||
Net expenses | 0.13 | % | 0.16 | % | 0.22 | %(e) | 0.28 | %(e) | 0.29 | %(e) | |||||||||||||
Waiver/Reimbursement | 0.27 | % | 0.23 | % | 0.16 | % | 0.09 | % | 0.08 | % | |||||||||||||
Net investment income | — | %(f) | — | — | (e) | 0.01 | %(e) | 0.05 | %(e) | ||||||||||||||
Net assets, end of period (000s) | $ | 603,772 | $ | 531,331 | $ | 617,909 | $ | 531,446 | $ | 551,600 |
Past performance is no guarantee of future results.
(a) Rounds to less than $0.001 per share.
(b) Total return at net asset value assuming all distributions reinvested.
(c) 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.
(d) 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.
(e) The benefits derived from expense reductions had an impact of less than 0.01%.
(f) Rounds to less than 0.01%.
See Accompanying Notes to Financial Statements.
26
Notes to Financial Statements – BofA Municipal Reserves
August 31, 2015
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.
The Fund is an investment company and accordingly follows the investment company accounting and reporting guidance of the Financial Accounting Standards Board (FASB) Accounting Standard Codification Topic 946 Financial Services—Investment Companies.
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 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). These investments may trade in markets that are not considered to be active, but whose values are supported by observable inputs such as U.S. government obligations and agency securities, investment-grade corporate bonds and state, municipal and provincial obligations. For money market funds operating under Rule 2a-7 of the 1940 Act, securities are valued at amortized cost which approximates market value and are considered to be valued using Level 2 inputs.
• 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.
27
BofA Municipal Reserves, August 31, 2015
Unobservable inputs may include management's own assumptions about the factors market participants would use in pricing an investment.
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
Security Transactions
Security transactions are accounted for on the trade date. Cost is determined and gains (losses) are based upon the specific identification method for both financial statement and federal income tax purposes.
Income Recognition
Interest income is recorded on the accrual basis. Premium and discount are amortized and accreted, respectively, on all debt securities, unless otherwise noted.
Expenses
General expenses of the Trust are allocated to the 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. Expenses directly attributable to a specific class of shares are charged to that share class.
Determination of Class Net Asset Value
All income, expenses (other than class-specific expenses, which are charged to that share class, as shown on the Statement of Operations) and realized 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 based on the following methodologies: income and expenses are allocated to each class based on the settled shares method, while realized gains (losses) are allocated based on the relative net assets of each class.
Federal Income Tax Status
The Fund intends to qualify each year as a "regulated investment company" under Subchapter M of the Internal Revenue Code, as amended, and to distribute substantially all of its tax-exempt or taxable income, if any, for its tax year, and as such will not be subject to federal income taxes. In addition, the Fund intends to distribute in each calendar year
substantially all of its net investment income, capital gains and certain other amounts, if any, such that the Fund 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.
For the year ended August 31, 2015, permanent book and tax basis differences resulting primarily from disallowance of excess expenses allocable to tax-exempt income were identified and reclassified among the components of the Fund's net assets as follows:
Undistributed Net Investment Income | Accumulated Net Realized Gain (Loss) | Paid-In-Capital | |||||||||
$ | 65,693 | $ | — | $ | (65,693 | ) |
28
BofA Municipal Reserves, August 31, 2015
The tax character of distributions paid during the years ended August 31, 2015 and August 31, 2014 were as follows:
August 31, | |||||||||||
Distributions paid from | 2015 | 2014 | |||||||||
Ordinary Income* | $ | 88,447 | $ | — |
* For tax purposes, short-term capital gain distributions, if any, are considered ordinary income distributions.
As of August 31, 2015, the components of distributable earnings on a tax basis were as follows:
Undistributed Tax-Exempt Income | Undistributed Ordinary Income | Undistributed Long-Term Capital Gains | |||||||||
$ | — | $ | 65,702 | $ | — |
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, 2015, 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, 2015, the Fund had post-Effective Date capital losses as follows:
Short Term Losses | |||
$ | 9,783 |
Capital loss carry forwards of $36,342 were utilized by the Fund during the year ended August 31, 2015.
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 ("BofA Corp."), 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 | % |
For the year ended August 31, 2015, the Fund's effective investment advisory fee rate, net of fee waivers, was 0.15% of the Fund's average daily net assets.
29
BofA Municipal Reserves, August 31, 2015
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 year ended August 31, 2015, the 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.
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, 2015. There is no guarantee that this expense limitation will continue after such date.
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 (together, 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 the 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.
Distribution and Shareholder Servicing Fees
BofA Distributors, Inc. (the "Distributor"), an affiliate of the Advisor and an indirect, wholly owned subsidiary of BofA Corp., 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 sales support services. The Distributor is entitled to retain some or all fees payable under the Distribution Plan in certain circumstances, including but not limited to, instances when there is no broker of record or when certain qualification standards have not been met by the broker of record. In certain instances, payments will continue to be made pursuant to the Distribution Plan with respect to shares held in classes that are closed to new investors and shares held by specific investors who are not eligible to make additional purchases in a particular share class.
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
30
BofA Municipal Reserves, August 31, 2015
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, 2015 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 the 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, 2015, so that the Fund's ordinary operating expenses (excluding any acquired fund fees and expenses, 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 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 August 31, 2015, the amounts potentially recoverable pursuant to this arrangement are as follows:
Amount of potential recovery expiring August 31: | Total potential | Amount recovered during the year | |||||||||||||||||
2018 | 2017 | 2016 | recovery | ended 08/31/2015 | |||||||||||||||
$ | 974,277 | $ | 1,115,571 | $ | 1,634,583 | $ | 3,724,431 | $ | — |
31
BofA Municipal Reserves, August 31, 2015
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%. Pursuant to a September 25, 2015
amendment, an annual administration fee of $25,000 is also accrued and apportioned to each fund participating in the line of credit based on the average net assets of the participating funds. Prior to the September 25, 2015 amendment, an annual administration fee of $10,000 was accrued and apportioned to each participating fund under the same terms.
For the year ended August 31, 2015, 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.
32
BofA Municipal Reserves, August 31, 2015
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.
Note 8. Money Market Fund Regulatory Matters
On July 23, 2014, the Securities and Exchange Commission voted to amend Rule 2a-7, which governs money market funds (such as the Fund). The majority of these amendments take effect in 2016. The most significant change is a requirement that institutional (i.e. large volume institutions such as banks, trusts, insurance companies, etc.) prime and institutional municipal money market funds move to a floating net asset value. Retail (i.e. a money market mutual fund that has policies and procedures reasonably designed to limit all beneficial owners of the money market fund to natural persons) prime, municipal, government and treasury money market funds will continue to transact at a stable $1.00 share price. In addition, the boards of trustees of non-government money market funds may impose a temporary liquidity fee of up to 2% of the value of a redemption and/or suspend (or "gate") redemptions temporarily should a money market fund's level of weekly liquid assets fall below 30% of its total assets. At this time, the Fund's management is evaluating the implications of the reforms and their impact on the Fund, including potential effects on the Fund's operations and returns.
33
Report of Independent Registered Public Accounting Firm
To the Trustees of BofA Funds Series Trust and Shareholders of BofA Municipal Reserves
In our opinion, the accompanying statement of assets and liabilities, including the investment portfolio, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of BofA Municipal Reserves (the "Fund") (a series of BofA Funds Series Trust) at August 31, 2015, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and the financial highlights for each of the periods indicated, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as "financial statements") are the responsibility of the Fund's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at August 31, 2015 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
Boston, Massachusetts
October 21, 2015
34
Federal Income Tax Information (Unaudited) – BofA Municipal Reserves
The Fund will notify shareholders in January 2016 of amounts for use in preparing 2015 income tax returns.
35
Fund Governance
The Trustees serve terms of indefinite duration. The names, addresses and ages of the Trustees and officers of the Funds in the BofA Funds Series Trust, the year each was first elected or appointed to office, their principal business occupations during at least the last five years, the number of Funds overseen by each Trustee and other directorships they hold are shown below. Each officer listed below serves as an officer of each Fund in the BofA Funds Series Trust.
Independent Trustees
Name, Address, and Year of Birth, Position with Funds, Year First Elected or Appointed to Office | Principal Occupation(s) During Past Five Years, Number of Funds in BofA Funds Series Trust Overseen by Trustee, Other Directorships Held | ||||||
Harrison M. Bains (Born 1943) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Trustee (since 2011) | Retired. Oversees 11 Funds. Mercer Funds (9 funds); BG Medicine, Inc. (life sciences). | ||||||
Paul Glasserman (Born 1962) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Trustee (since 2011) | Jack R. Anderson Professor of Business—Columbia Business School, since 2000 (Senior Vice Dean, 2004-2008; Professor, 1995-2000); Visiting Scholar—Federal Reserve Bank of New York, from 2008 to 2012; Consultant to the U.S. Treasury, 2011-2014; Independent consultant to financial firms since 1995. Oversees 11 Funds. | ||||||
William A. Hawkins (Born 1942) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Trustee (since 2005)1 | Managing Director—Overton Partners (financial consulting), August 2010 to present. Oversees 11 Funds. Columbia Funds (127 funds). | ||||||
R. Glenn Hilliard (Born 1943) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Trustee (since 2005)1 | Chairman and Chief Executive Officer—Hilliard Group LLC (investing and consulting), from 2003 through current; Non-Executive Director & Chairman—CNO Financial Group, Inc. (formerly Conseco, Inc.) (insurance), September 2003-May 2011. Oversees 11 Funds. Columbia Funds (127 funds). | ||||||
William J. Kelly (Born 1960) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Trustee (since 2011) | Chief Executive Officer—Chartered Alternative Investment Analyst Association, January 2014 to present. Oversees 11 Funds. | ||||||
Debra Perry (Born 1951) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Trustee (since 2011) | Retired. Managing Member—Perry Consulting LLC (advisory firm), from 2008 through 2014. Oversees 11 Funds. Korn/Ferry International (recruiting); Sanford C. Bernstein Fund, Inc. (18 funds); Board Member—PartnerRE (reinsurance). |
1 Includes service as trustees of Columbia Funds Series Trust, the predecessor trust.
The Statement of Additional Information includes additional information about the Trustees of the Funds and is available, without charge, upon request by calling 888-331-0904. (Institutional Investors, please call 800-353-0828.)
36
Fund Governance (continued)
Officers
Name, Address, and Year of Birth, Position with Funds, Year First Elected or Appointed to Office | Principal Occupation(s) During Past Five Years | ||||||
Michael J. Pelzar (Born 1968) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 President (since 2010) | President, BofA Global Capital Management Group, LLC since May 2010; Managing Director and Head of Product Management of the Advisor from 2007 to 2010. | ||||||
Kenneth B. Crotty (Born 1961) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Vice President (since 2015) Assistant Treasurer (2014-2015) | Chief Operating Officer, BofA Global Capital Management Group, LLC since August 2013; President KBC Consulting 2012-2013; Global Chief Operating Officer of Mercer Investments and President of Mercer Investments US 2006-2012. | ||||||
Jeffrey R. Coleman (Born 1969) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Senior Vice President, Chief Financial Officer, Chief Accounting Officer (since 2010) and Treasurer (since 2009) | Managing Director of Fund Administration and Transfer Agency Oversight of the Advisor since May 2010; Director of Fund Administration of the Advisor since January 2006. | ||||||
Marina Belaya (Born 1967) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Secretary and Chief Legal Officer (since 2013) | Assistant General Counsel, Director, Bank of America since July 2007. | ||||||
James R. Bordewick (Born 1959) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Senior Vice President and Chief Compliance Officer (since 2010) | Chief Compliance Officer of U.S. Trust, Bank of America Private Wealth Management since 2012; Chief Compliance Officer of the Advisor and Managing Director, Bank of America since May 2010. | ||||||
Barry S. Vallan (Born 1969) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Deputy Treasurer (since 2010) and Controller (since 2006) | Director of Fund Administration of the Advisor since May 2010; Vice President—Fund Treasury of the Advisor since October 2004; Vice President—Fund Administration of the Advisor since May 2002. |
37
Fund Governance (continued)
Officers (continued)
Name, Address, and Year of Birth, Position with Funds, Year First Elected or Appointed to Office | Principal Occupation(s) During Past Five Years | ||||||
Patrick Campbell (Born 1957) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Vice President (since 2015) Assistant Treasurer (2010-2015) | Director of Transfer Agency Oversight, BofA Global Capital Management Group, LLC since May 2010. | ||||||
Rana J. Wright (Born 1978) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Assistant Secretary (since 2014) | Assistant General Counsel and Director, Bank of America, and Chief Legal Officer, BofA Global Capital Management Group, LLC, since June 2014; Partner, Reed Smith LLP, 2012 to 2014; Associate, Reed Smith LLP, 2003 to 2011. | ||||||
Nitin Mehra (Born 1977) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Vice President (since 2015) Assistant Treasurer (2013-2015) | Managing Director and Head of Strategy and Product at BofA Global Capital Management Group, LLC since May 2011; Managing Director of Strategy and Product at BofA Global Capital Management Group, LLC from 2010-2011; Director of Product Strategy and Development of the Advisor from 2008-2010. |
38
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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.
An investment in money market mutual funds is not insured or guaranteed by Bank of America, N.A. or its affiliates, or by the Federal Deposit Insurance Corporation or any other government agency. Although money market mutual funds seek to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in money market mutual funds.
BofA® 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
41
BofA Global Capital Management
100 Federal Street
Boston, MA 02110
Questions or comments regarding your account or investment in the Funds should be directed to:
Boston Financial Data Services
P.O. Box 8723
Boston, MA 02266-8723
Retail Investors: 888.331.0904
Institutional Investors: 800.353.0828
BofA Municipal Reserves
Annual Report, August 31, 2015
© 2015 Bank of America Corporation. All rights reserved.
BofA Distributors, Inc.
100 Federal Street, Boston, MA 02110
888.331.0904 (Institutional Investors: 800.353.0828) www.bofacapital.com
AR-MNR-1015
BofA Funds
Annual Report
August 31, 2015
• 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 | ||||||
Report of Independent Registered Public Accounting Firm | 22 | ||||||
Federal Income Tax Information | 23 | ||||||
Fund Governance | 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.
President's Message
To Our Valued Shareholders:
A year ago the consensus within the financial community was that the interest rate environment would soon be more hospitable to money market fund investors as a strengthening U.S. economy finally moved the Federal Reserve ("the Fed") to raise short-term interest rates. That rate hike has yet to materialize, so for liquidity investors, the most important news out of Washington has come not from the Fed, but from the U.S. Securities and Exchange Commission ("SEC"), which adopted sweeping changes to the regulations governing U.S. money market funds.
To take effect in October 2016, the amendments to Rule 2a-7 under the Investment Company Act of 1940 include two important reforms that are prompting investors to reevaluate their liquidity investment strategies:
• Institutional prime and institutional municipal money market funds must "float" their net asset values ("NAVs"), which means the value of the funds' shares would be based on the market value of their underlying securities. Only government funds and funds serving retail investors—defined as "natural persons"—would retain their stable, $1-per-share NAVs.
• The boards of trustees of non-government money market funds may impose a temporary liquidity fee of up to 2% of the value of a redemption or to suspend or "gate" redemptions temporarily should a money market fund's level of weekly liquid assets fall below 30% of its total assets.
These changes are part of a multi-year effort on the part of the SEC to make money market funds more resilient during market crises, when heavy redemption activity can exert strong downward pressure on funds' NAVs.
After extensive analysis, we have concluded that the impact of the rule changes will be less significant than many investors first believed. With regard to floating NAV funds, for example, fund managers still will go to great lengths to maintain the $1-per-share NAV after the floating NAV rule takes effect. If there is any movement around the $1 mark, that variation likely would be very limited under normal market conditions because of the preponderance of short-term, high-quality securities in money market funds. As for liquidity fees and redemption gates, these measures would be a last resort for fund managers because of the reputational damage money market fund companies would incur were they to impose these measures.
Recognizing the importance of money market fund reform to our shareholders, BofA Global Capital Management has launched a series of whitepapers analyzing the potential impact of the rule changes on clients' liquidity-management programs. These papers are available at www.bofacapital.com. Our preparations for the implementation of the reforms are proceeding, and we anticipate no problems meeting the October 2016 compliance deadline.
Shifting back to the macroeconomic environment, the Fed held the benchmark federal funds rate steady in September, but we believe the drop in the U.S. unemployment rate and steady economic growth should allow the central bank to begin increasing the federal funds rate from the current 0% to .25% rate—in the near future. This, in our view, will mark the beginning of a gradual increase in rates that over time should translate into potentially more attractive yields for money market fund investors. We are positioning the BofA Funds to capture the potential benefits of a rising-rate environment.
Given the complexity of modern financial markets and the ever-present threat of unforeseen investment challenges, the managers of the BofA Funds will continue to employ a conservative investment process designed to achieve your most important goals: principal protection, a high degree of liquidity and competitive risk-adjusted yields. We believe our conservative investment posture; our focus on the management of liquidity investments; and the resources available to us as part of one of the world's largest financial institutions position BofA Global Capital Management to help you reach your liquidity objectives.
On behalf of everyone at BofA Global Capital Management, I thank you for the opportunity to have served you over the past year. We appreciate your business, and we look forward to working with you in the months and years ahead.
Sincerely,
Michael Pelzar
President, BofA Global Capital Management
ARQ5HMRY
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:
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 $1,000. Please refer to the Fund's prospectus for additional details.
3/1/15 – 8/31/15 (Unaudited)
Account value at the beginning of the period ($) | 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 | 1,024.55 | 0.66 | 0.66 | 0.13 | ||||||||||||||||||||||||
Institutional Class Shares | 1,000.00 | 1,000.00 | 1,000.00 | 1,024.55 | 0.66 | 0.66 | 0.13 | ||||||||||||||||||||||||
Investor Class Shares | 1,000.00 | 1,000.00 | 1,000.00 | 1,024.55 | 0.66 | 0.66 | 0.13 | ||||||||||||||||||||||||
Trust Class Shares | 1,000.00 | 1,000.00 | 1,000.00 | 1,024.55 | 0.66 | 0.66 | 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
Investment Portfolio – BofA New York Tax-Exempt Reserves
August 31, 2015
Municipal Bonds – 93.4% | |||||||||||
Par ($) | Value ($) | ||||||||||
New York – 93.4% | |||||||||||
NY Amherst Development Corp. | |||||||||||
Asbury Pointe, Inc., | |||||||||||
Series 2011 A, | |||||||||||
LOC: M&T Bank | |||||||||||
0.040% 02/01/35 (09/03/15) (a)(b) | 3,760,000 | 3,760,000 | |||||||||
NY Arlington Central School District | |||||||||||
Series 2014 | |||||||||||
Insured: State Aid Withholding 1.000% 11/13/15 | 3,000,000 | 3,004,186 | |||||||||
NY Bedford Central School District | |||||||||||
Series 2015 | |||||||||||
Insured: State Aid Withholding 1.250% 07/15/16 | 1,704,110 | 1,712,187 | |||||||||
NY Brewster Central School District | |||||||||||
Series 2015 | |||||||||||
Insured: State Aid Withholding 1.000% 10/09/15 | 850,297 | 850,827 | |||||||||
NY City Industrial Development Agency | |||||||||||
Jewish Board of Family and Children's Services, Inc., | |||||||||||
Series 2000 LOC: TD Bank N.A. 0.010% 07/01/25 (09/02/15) (a)(b) | 9,305,000 | 9,305,000 | |||||||||
NY City Trust for Cultural Resources | |||||||||||
WNYC Radio, Inc, | |||||||||||
Series 2006, LOC: Wells Fargo Bank N.A. 0.020% 04/01/26 (09/03/15) (a)(b) | 1,200,000 | 1,200,000 | |||||||||
NY Clipper Tax-Exempt Certificate Trust | |||||||||||
New York Dormitory Authority, | |||||||||||
Series 2007, LIQ FAC: State Street Bank & Trust Co. 0.040% 11/15/26 (09/03/15) (a)(b) | 15,125,000 | 15,125,000 | |||||||||
NY County of Sullivan | |||||||||||
Series 2015, | |||||||||||
1.250% 03/04/16 | 4,250,000 | 4,270,335 | |||||||||
NY County of Tompkins | |||||||||||
Series 2014 B, | |||||||||||
1.000% 10/15/15 | 3,240,000 | 3,242,968 | |||||||||
Series 2015 | |||||||||||
1.500% 07/08/16 | 1,350,000 | 1,359,331 |
Par ($) | Value ($) | ||||||||||
NY County of Ulster | |||||||||||
Series 2014 A, | |||||||||||
1.000% 11/13/15 | 1,187,000 | 1,188,464 | |||||||||
NY County of Washington | |||||||||||
Series 2015, | |||||||||||
1.500% 06/10/16 | 7,000,000 | 7,052,754 | |||||||||
NY Dormitory Authority | |||||||||||
Catholic Health System, | |||||||||||
Series 2008, LOC: HSBC Bank USA N.A. 0.020% 07/01/34 (09/03/15) (a)(b) | 6,725,000 | 6,725,000 | |||||||||
City University of NY, | |||||||||||
Series 2008 LOC: TD Bank N.A. 0.010% 07/01/31 (09/03/15) (a)(b) | 8,600,000 | 8,600,000 | |||||||||
Northern Westchester Hospital, | |||||||||||
Series 2009, LOC: TD Bank N.A. 0.010% 11/01/34 (09/03/15) (a)(b) | 1,480,000 | 1,480,000 | |||||||||
Rockefeller University, | |||||||||||
Series 2005 A2 SPA: JPMorgan Chase Bank 0.010% 07/01/32 (09/03/15) (a)(b) | 2,200,000 | 2,200,000 | |||||||||
St John's University, | |||||||||||
Series 2008 B2 LOC: U.S. Bank N.A. 0.010% 07/01/37 (09/03/15) (a)(b) | 1,750,000 | 1,750,000 | |||||||||
NY Fayetteville-Manlius Central School District | |||||||||||
Series 2015 | |||||||||||
Insured: State Aid Withholding 1.250% 06/30/16 | 2,589,300 | 2,603,777 | |||||||||
NY Glens Falls City School District | |||||||||||
Series 2015 | |||||||||||
Insured: State Aid Withholding 1.250% 06/29/16 | 2,491,000 | 2,502,822 | |||||||||
NY Hamburg Central School District | |||||||||||
Series 2015 | |||||||||||
Insured: State Aid Withholding 2.000% 06/01/16 | 1,275,000 | 1,288,297 |
See Accompanying Notes to Financial Statements.
2
BofA New York Tax-Exempt Reserves
August 31, 2015
Municipal Bonds (continued) | |||||||||||
Par ($) | Value ($) | ||||||||||
NY Housing Development Corp. | |||||||||||
Series 2013 B-4 | |||||||||||
LIQ FAC: Wells Fargo Bank N.A. 0.020% 05/01/18 (09/03/15) (a)(b) | 8,800,000 | 8,800,000 | |||||||||
NY Housing Finance Agency | |||||||||||
160 Madison Avenue LLC, | |||||||||||
Series 2014 A LOC: PNC Bank N.A. 0.010% 11/01/46 (09/01/15) (a)(b) | 1,285,000 | 1,285,000 | |||||||||
Durst Pyramid LLC, | |||||||||||
Series 2015 A-1 LOC: Bank of NY Mellon 0.010% 05/01/49 (09/02/15) (a)(b) | 4,500,000 | 4,500,000 | |||||||||
L&M 93rd Street LLC, | |||||||||||
250 West 93rd St., Series 2005 A, AMT, LOC: Landesbank Hessen-Thüringen: 0.030% 11/01/38 (09/02/15) (a)(b) | 5,650,000 | 5,650,000 | |||||||||
L&M Prospect Plaza LLC, | |||||||||||
Series 2007 A AMT, LOC: Citibank N.A. 0.040% 11/01/39 (09/02/15) (a)(b) | 3,000,000 | 3,000,000 | |||||||||
Midtown West B LLC, | |||||||||||
505 West 37th St. Series 2009 A, LOC: Landesbank Hessen-Thüringen: 0.020% 05/01/42 (09/01/15) (a)(b) | 4,000,000 | 4,000,000 | |||||||||
West 60th Realty LLC, | |||||||||||
Series 2013 A1, LOC: M&T Bank 0.070% 05/01/46 (09/02/15) (a)(b) | 14,000,000 | 14,000,000 | |||||||||
NY Irvington Union Free School District | |||||||||||
Series 2015 | |||||||||||
Insured: State Aid Withholding 1.500% 05/26/16 | 2,100,000 | 2,116,530 | |||||||||
NY Islip Union Free School District | |||||||||||
Series 2015 | |||||||||||
Insured: State Aid Withholding 2.000% 03/01/16 | 1,150,000 | 1,159,696 |
Par ($) | Value ($) | ||||||||||
NY Lakeland Central School District | |||||||||||
Series 2015 | |||||||||||
Insured: State Aid Withholding 2.000% 08/26/16 | 2,011,892 | 2,038,621 | |||||||||
NY Liverpool Central School District | |||||||||||
Series 2014 B, | |||||||||||
Insured: State Aid Withholding 1.000% 10/02/15 | 2,600,000 | 2,601,674 | |||||||||
Series 2015 | |||||||||||
Insured: State Aid Withholding 1.250% 07/07/16 | 500,000 | 503,498 | |||||||||
NY Livingston County Industrial Development Agency | |||||||||||
Red Jacket/Nicholas, | |||||||||||
Series 2007 A, LOC: HSBC Bank USA N.A. 0.020% 07/01/19 (09/03/15) (a)(b) | 942,000 | 942,000 | |||||||||
NY Monroe County Industrial Development Agency | |||||||||||
Nazareth College of Rochester, | |||||||||||
Series 2008, LOC: JPMorgan Chase Bank 0.020% 04/01/38 (09/02/15) (a)(b) | 1,755,000 | 1,755,000 | |||||||||
NY Mortgage Agency | |||||||||||
Series 2007, AMT, | |||||||||||
SPA: JPMorgan Chase Bank 0.010% 10/01/37 (09/01/15) (a)(b) | 11,300,000 | 11,300,000 | |||||||||
NY Nassau County Industrial Development Agency | |||||||||||
Series 2007 A, AMT, | |||||||||||
LOC: M&T Bank 0.220% 10/01/40 (09/03/15) (a)(b) | 6,710,000 | 6,710,000 | |||||||||
NY Nassau Health Care Corp. | |||||||||||
Series 2009 B1, | |||||||||||
LOC: TD Bank N.A. 0.010% 08/01/29 (09/02/15) (a)(b) | 7,860,000 | 7,860,000 | |||||||||
Series 2009 C1 | |||||||||||
LOC: Wells Fargo Bank N.A. 0.020% 08/01/29 (09/03/15) (a)(b) | 8,800,000 | 8,800,000 |
See Accompanying Notes to Financial Statements.
3
BofA New York Tax-Exempt Reserves
August 31, 2015
Municipal Bonds (continued) | |||||||||||
Par ($) | Value ($) | ||||||||||
NY New York City Housing Development Corp. | |||||||||||
RBNB Wall Street Owner, | |||||||||||
Series 2005 A, LOC: Landesbank Hessen-Thüringen 0.020% 12/01/36 (09/02/15) (a)(b) | 6,545,000 | 6,545,000 | |||||||||
Target LP, | |||||||||||
Series 2006 A, AMT, LOC: Citibank N.A. 0.030% 02/01/38 (09/02/15) (a)(b) | 500,000 | 500,000 | |||||||||
NY New York City Municipal Water Finance Authority | |||||||||||
Second Generation Resolution, | |||||||||||
Series 2005 B, SPA: California State Teachers Retirement 0.010% 06/15/32 (09/01/15) (a)(b) | 12,495,000 | 12,495,000 | |||||||||
NY New York City Transitional Finance Authority Future Tax Secured Revenue | |||||||||||
Series 2002 1A, | |||||||||||
LIQ FAC: Landesbank Hessen-Thüringen 0.010% 11/01/22 (09/02/15) (a)(b) | 5,000,000 | 5,000,000 | |||||||||
Series 2012 C5 | |||||||||||
LOC: Sumitomo Mitsui Banking 0.010% 11/01/41 (09/03/15) (a)(b) | 7,420,000 | 7,420,000 | |||||||||
NY New York City | |||||||||||
Series 2013 D-3 | |||||||||||
SPA: JPMorgan Chase Bank 0.010% 08/01/38 (09/01/15) (a)(b) | 4,100,000 | 4,100,000 | |||||||||
Series 2015 F-6 | |||||||||||
SPA: JPMorgan Chase Bank 0.010% 06/01/44 (09/01/15) (a)(b) | 1,750,000 | 1,750,000 | |||||||||
Series 1993 E-2, | |||||||||||
LOC: JPMorgan Chase Bank 0.010% 08/01/21 (09/01/15) (a)(b) | 1,400,000 | 1,400,000 | |||||||||
Series 2004 H-1, | |||||||||||
LOC: Bank of NY Mellon 0.010% 03/01/34 (09/01/15) (a)(b) | 1,300,000 | 1,300,000 | |||||||||
Series 2006 I-4, | |||||||||||
LOC: California Public Employees Retirement 0.010% 04/01/36 (09/01/15) (a)(b) | 3,700,000 | 3,700,000 |
Par ($) | Value ($) | ||||||||||
Series 2006 I-6, | |||||||||||
LOC: Bank of NY Mellon 0.010% 04/01/36 (09/01/15) (a)(b) | 1,300,000 | 1,300,000 | |||||||||
Series 2012 A-3, | |||||||||||
LOC: Mizuho Corporate Bank 0.010% 10/01/40 (09/01/15) (a)(b) | 13,200,000 | 13,200,000 | |||||||||
NY Oneida County Industrial Development Agency | |||||||||||
Champion Home Builders Co., | |||||||||||
Series 1999, AMT, LOC: Wells Fargo Bank N.A. 0.100% 06/01/29 (09/03/15) (a)(b) | 6,820,000 | 6,820,000 | |||||||||
Economic Development Growth Enterprises, | |||||||||||
Series 2001, AMT LOC: Bank of NY Mellon: 0.080% 06/01/26 (09/03/15) (a)(b) | 1,945,000 | 1,945,000 | |||||||||
NY Port Authority of New York & New Jersey | |||||||||||
Series 2014 AMT, | |||||||||||
LIQ FAC: Citibank N.A. 0.060% 03/01/22 (09/03/15) (a)(b)(c) | 2,050,000 | 2,050,000 | |||||||||
NY Putnam County Industrial Development Agency | |||||||||||
United Cerebral Palsy of Putnam, | |||||||||||
Series 2005 B, LOC: TD Bank N.A. 0.020% 12/01/30 (09/03/15) (a)(b) | 1,065,000 | 1,065,000 | |||||||||
NY Saratoga County Industrial Development Agency | |||||||||||
Saratoga Hospital, | |||||||||||
Series 2007 A, LOC: HSBC Bank PLC 0.020% 12/01/32 (09/03/15) (a)(b) | 8,590,000 | 8,590,000 | |||||||||
NY Town of Amherst | |||||||||||
Series 2014 | |||||||||||
0.750% 11/12/15 | 1,000,000 | 1,001,002 | |||||||||
NY Town of North Hempstead | |||||||||||
Series 2014 D | |||||||||||
0.500% 10/02/15 | 2,000,000 | 2,000,423 | |||||||||
NY Town of Southampton | |||||||||||
Series 2015 | |||||||||||
1.000% 02/24/16 | 2,745,640 | 2,753,937 |
See Accompanying Notes to Financial Statements.
4
BofA New York Tax-Exempt Reserves
August 31, 2015
Municipal Bonds (continued) | |||||||||||
Par ($) | Value ($) | ||||||||||
NY Triborough Bridge & Tunnel Authority | |||||||||||
Series 2005 B-3 | |||||||||||
LOC: Bank of Tokyo-Mitsubishi UFJ 0.010% 01/01/32 (09/02/15) (a)(b) | 12,000,000 | 12,000,000 | |||||||||
NY White Plains City School District | |||||||||||
Series 2015 | |||||||||||
Insured: State Aid Withholding 0.490% 06/25/16 | 4,000,000 | 4,000,000 | |||||||||
New York Total | 267,178,329 | ||||||||||
Total Municipal Bonds (cost of $267,178,329) | 267,178,329 | ||||||||||
Closed-End Investment Companies – 6.5% | |||||||||||
New York – 6.5% | |||||||||||
NY Nuveen AMT-Free Municipal Income Fund, Inc. | |||||||||||
Series 2013, | |||||||||||
LIQ FAC: Citibank N.A.: 0.080% 08/01/40 (09/03/15) (a)(b)(c) | 16,800,000 | 16,800,000 | |||||||||
0.080% 12/01/40 (09/03/15) (a)(b)(c) | 2,000,000 | 2,000,000 | |||||||||
New York Total | 18,800,000 | ||||||||||
Total Closed-End Investment Companies (cost of $18,800,000) | 18,800,000 | ||||||||||
Total Investments – 99.9% (cost of $285,978,329) (d) | 285,978,329 | ||||||||||
Other Assets & Liabilities, Net – 0.1% | 158,724 | ||||||||||
Net Assets – 100.0% | 286,137,053 |
Notes to Investment Portfolio:
Portfolio holdings are subject to change periodically and may not be representative of current holdings.
(a) Variable rate obligations have long dated final maturities, however, their effective maturity is within 397 days in accordance with a demand feature. These securities are secured by a letter of credit or other credit support agreements from banks. These securities are puttable upon not more than one, seven or thirty business days' notice. Put bonds and notes have a demand feature that matures within one year. The interest rate is changed periodically and the interest rate reflects the rate at August 31, 2015.
(b) Parenthetical date represents the effective maturity date for the security which may represent the demand date for puttable or callable securities or the prerefunded date for certain securities where applicable.
(c) Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At August 31, 2015, these securities, which are not illiquid, amounted to $20,850,000 or 7.3% of net assets for the Fund.
(d) Cost for federal income tax purposes is $285,978,329.
The following table summarizes the inputs used, as of August 31, 2015, 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 | $ | — | $ | 267,178,329 | $ | — | $ | 267,178,329 | |||||||||||
Total Closed-End Investment Companies | — | 18,800,000 | — | 18,800,000 | |||||||||||||||
Total Investments | $ | — | $ | 285,978,329 | $ | — | $ | 285,978,329 |
The Fund's assets are assigned to the Level 2 input category which represents short-term obligations which are valued using amortized cost, an income approach which converts future cash flows to a present value based upon the discount or premium at purchase.
For the year ended August 31, 2015, all of the securities held in the Portfolio were Level 2 and there were no transfers to report.
For more information on valuation inputs, please refer to the Security Valuation section in the accompanying Notes to Financial Statements.
At August 31, 2015, the asset allocation of the Fund is as follows:
Asset Allocation | % of Net Assets | ||||||
Municipal Bonds | 93.4 | ||||||
Closed-End Investment Companies | 6.5 | ||||||
99.9 | |||||||
Other Assets & Liabilities, Net | 0.1 | ||||||
100.0 |
Acronym | Name | ||||||
AMT | Alternative Minimum Tax | ||||||
LIQ FAC | Liquidity Facility | ||||||
LOC | Letter of Credit | ||||||
SPA | Stand-by Purchase Agreement |
See Accompanying Notes to Financial Statements.
5
Statement of Assets and Liabilities – BofA New York Tax-Exempt Reserves
August 31, 2015
($) | |||||||||||
Assets | Investments, at amortized cost approximating value | 285,978,329 | |||||||||
Cash | 14,288 | ||||||||||
Receivable for: | |||||||||||
Interest | 223,059 | ||||||||||
Expense reimbursement due from investment advisor | 14,963 | ||||||||||
Trustees' deferred compensation plan | 148 | ||||||||||
Prepaid expenses | 2,183 | ||||||||||
Total Assets | 286,232,970 | ||||||||||
Liabilities | Payable for: | ||||||||||
Investment advisory fee | 11,616 | ||||||||||
Administration fee | 3,031 | ||||||||||
Pricing and bookkeeping fees | 7,918 | ||||||||||
Transfer agent fee | 112 | ||||||||||
Trustees' fees | 2,812 | ||||||||||
Audit fee | 35,027 | ||||||||||
Legal fee | 21,225 | ||||||||||
Custody fee | 1,319 | ||||||||||
Chief Compliance Officer expenses | 1,322 | ||||||||||
Trustees' deferred compensation plan | 148 | ||||||||||
Other liabilities | 11,387 | ||||||||||
Total Liabilities | 95,917 | ||||||||||
Net Assets | 286,137,053 | ||||||||||
Net Assets Consist of | Paid-in capital | 286,137,053 | |||||||||
Net Assets | 286,137,053 |
See Accompanying Notes to Financial Statements.
6
Statement of Assets and Liabilities (continued) – BofA New York Tax-Exempt Reserves
August 31, 2015
| |||||||||||
Capital Class Shares | Net assets | $ | 69,804,057 | ||||||||
Shares outstanding | 69,793,085 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Institutional Class Shares | Net assets | $ | 56,977 | ||||||||
Shares outstanding | 56,968 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Investor Class Shares | Net assets | $ | 4,479,361 | ||||||||
Shares outstanding | 4,478,656 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Trust Class Shares | Net assets | $ | 211,796,658 | ||||||||
Shares outstanding | 211,762,813 | ||||||||||
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 Year Ended August 31, 2015
($) | |||||||||||
Investment Income | Interest | 323,329 | |||||||||
Expenses | Investment advisory fee | 421,284 | |||||||||
Administration fee | 200,728 | ||||||||||
Distribution fee: | |||||||||||
Investor Class Shares | 7,059 | ||||||||||
Service fee: | |||||||||||
Investor Class Shares | 17,647 | ||||||||||
Shareholder administration fee: | |||||||||||
Institutional Class Shares | 23 | ||||||||||
Trust Class Shares | 211,130 | ||||||||||
Transfer agent fee | 10,146 | ||||||||||
Pricing and bookkeeping fees | 84,799 | ||||||||||
Trustees' fees | 30,782 | ||||||||||
Custody fee | 7,770 | ||||||||||
Legal fees | 98,375 | ||||||||||
Chief Compliance Officer expenses | 7,782 | ||||||||||
Other expenses | 89,491 | ||||||||||
Total Expenses | 1,187,016 | ||||||||||
Fees waived or expenses reimbursed by investment advisor and/or administrator | (627,410 | ) | |||||||||
Fees waived by distributor: | |||||||||||
Institutional Class Shares | (20 | ) | |||||||||
Investor Class Shares | (24,690 | ) | |||||||||
Trust Class Shares | (211,567 | ) | |||||||||
Net Expenses | 323,329 | ||||||||||
Net Investment Income | — | ||||||||||
Net realized gain on investments | — | ||||||||||
Net Increase Resulting from Operations | — |
See Accompanying Notes to Financial Statements.
8
Statement of Changes in Net Assets – BofA New York Tax-Exempt Reserves
Year Ended August 31, | |||||||||||||||
Increase (Decrease) in Net Assets | 2015 ($) | 2014 ($) | |||||||||||||
Operations | Net realized gain on investments | — | 23,621 | ||||||||||||
Net increase resulting from operations | — | 23,621 | |||||||||||||
Distributions to Shareholders | From net investment income: | ||||||||||||||
Capital Class Shares | (115 | ) | (5,131 | ) | |||||||||||
Institutional Class Shares | — | (a) | (4 | ) | |||||||||||
Investor Class Shares | (14 | ) | (117 | ) | |||||||||||
Trust Class Shares | (383 | ) | (15,934 | ) | |||||||||||
From net realized gains: | |||||||||||||||
Capital Class Shares | (5,312 | ) | (3,288 | ) | |||||||||||
Institutional Class Shares | (5 | ) | (3 | ) | |||||||||||
Investor Class Shares | (666 | ) | (75 | ) | |||||||||||
Trust Class Shares | (17,635 | ) | (10,211 | ) | |||||||||||
Total distributions to shareholders | (24,130 | ) | (34,763 | ) | |||||||||||
Net Capital Stock Transactions | 22,474,843 | (47,867,703 | ) | ||||||||||||
Total increase (decrease) in net assets | 22,450,713 | (47,878,845 | ) | ||||||||||||
Net Assets | Beginning of period | 263,686,340 | 311,565,185 | ||||||||||||
End of period | 286,137,053 | 263,686,340 | |||||||||||||
Undistributed net investment income at end of period | — | 512 |
(a) Rounds to less than $1.
See Accompanying Notes to Financial Statements.
9
Statement of Changes in Net Assets (continued) – BofA New York Tax-Exempt Reserves
Capital Stock Activity | |||||||||||||||||||
Year Ended August 31, | |||||||||||||||||||
2015 | 2014 | ||||||||||||||||||
Shares | Dollars ($) | Shares | Dollars ($) | ||||||||||||||||
Capital Class Shares | |||||||||||||||||||
Subscriptions | 75,331,484 | 75,331,484 | 90,289,685 | 90,289,685 | |||||||||||||||
Redemptions | (70,820,721 | ) | (70,820,721 | ) | (121,275,378 | ) | (121,275,378 | ) | |||||||||||
Net increase (decrease) | 4,510,763 | 4,510,763 | (30,985,693 | ) | (30,985,693 | ) | |||||||||||||
Institutional Class Shares | |||||||||||||||||||
Distributions reinvested | 5 | 5 | 7 | 7 | |||||||||||||||
Redemptions | — | — | (420,027 | ) | (420,027 | ) | |||||||||||||
Net increase (decrease) | 5 | 5 | (420,020 | ) | (420,020 | ) | |||||||||||||
Investor Class Shares | |||||||||||||||||||
Subscriptions | 18,333,710 | 18,333,710 | 4,989,311 | 4,989,311 | |||||||||||||||
Distributions reinvested | 14 | 14 | 21 | 21 | |||||||||||||||
Redemptions | (14,887,880 | ) | (14,887,880 | ) | (5,403,658 | ) | (5,403,658 | ) | |||||||||||
Net increase (decrease) | 3,445,844 | 3,445,844 | (414,326 | ) | (414,326 | ) | |||||||||||||
Trust Class Shares | |||||||||||||||||||
Subscriptions | 354,399,751 | 354,399,751 | 320,008,603 | 320,008,603 | |||||||||||||||
Distributions reinvested | 67 | 67 | 151 | 151 | |||||||||||||||
Redemptions | (339,881,587 | ) | (339,881,587 | ) | (336,056,418 | ) | (336,056,418 | ) | |||||||||||
Net increase (decrease) | 14,518,231 | 14,518,231 | (16,047,664 | ) | (16,047,664 | ) |
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:
Year Ended August 31, | |||||||||||||||||||||||
Capital Class Shares | 2015 | 2014 | 2013 | 2012 (a) | 2011 | ||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||
Net investment income | — | — | — | (b) | 0.001 | 0.001 | |||||||||||||||||
Net realized gain (loss) on investments | — | — | (b) | — | (b) | — | (b) | — | |||||||||||||||
Total from investment operations | — | — | (b) | — | (b) | 0.001 | 0.001 | ||||||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||
From net investment income | — | (b) | — | (b) | — | (b) | (0.001 | ) | (0.001 | ) | |||||||||||||
From net realized gains | — | (b) | — | (b) | — | — | (b) | — | |||||||||||||||
Total distributions to shareholders | — | (b) | — | (b) | — | (b) | (0.001 | ) | (0.001 | ) | |||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Total return (c)(d) | 0.01 | % | 0.01 | % | 0.03 | % | 0.12 | % | 0.14 | % | |||||||||||||
Ratios to Average Net Assets/Supplemental Data: | |||||||||||||||||||||||
Gross expenses | 0.34 | % | 0.34 | % | 0.33 | % | 0.33 | % | 0.35 | % | |||||||||||||
Net expenses | 0.12 | % | 0.15 | % | 0.18 | %(e) | 0.20 | %(e) | 0.20 | %(e) | |||||||||||||
Waiver/Reimbursement | 0.22 | % | 0.19 | % | 0.15 | % | 0.13 | % | 0.15 | % | |||||||||||||
Net investment income | — | — | 0.02 | %(e) | 0.06 | %(e) | 0.14 | %(e) | |||||||||||||||
Net assets, end of period (000s) | $ | 69,804 | $ | 65,300 | $ | 96,293 | $ | 101,154 | $ | 85,820 |
Past performance is no guarantee of future results.
(a) On October 1, 2011, G-Trust shares and Retail A shares were converted into Capital Class shares.
(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) 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:
Year Ended August 31, | |||||||||||||||||||||||
Institutional Class Shares | 2015 | 2014 | 2013 | 2012 | 2011 | ||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||
Net investment income | — | — | — | (a) | 0.001 | 0.001 | |||||||||||||||||
Net realized gain (loss) on investments | — | — | (a) | — | (a) | — | (a) | — | |||||||||||||||
Total from investment operations | — | — | (a) | — | (a) | 0.001 | 0.001 | ||||||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||
From net investment income | — | (a) | — | (a) | — | (a) | (0.001 | ) | (0.001 | ) | |||||||||||||
From net realized gains | — | (a) | — | (a) | — | — | (a) | — | |||||||||||||||
Total distributions to shareholders | — | (a) | — | (a) | — | (a) | (0.001 | ) | (0.001 | ) | |||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Total return( b)(c) | 0.01 | % | 0.01 | % | 0.02 | % | 0.08 | % | 0.10 | % | |||||||||||||
Ratios to Average Net Assets/Supplemental Data: | |||||||||||||||||||||||
Gross expenses | 0.38 | % | 0.38 | % | 0.38 | % | 0.37 | % | 0.39 | % | |||||||||||||
Net expenses | 0.12 | % | 0.14 | %(d) | 0.20 | %(e) | 0.24 | %(e) | 0.24 | %(e) | |||||||||||||
Waiver/Reimbursement | 0.26 | % | 0.24 | % | 0.18 | % | 0.13 | % | 0.15 | % | |||||||||||||
Net investment income | — | — | 0.01 | %(e) | 0.03 | %(e) | 0.09 | %(e) | |||||||||||||||
Net assets, end of period (000s) | $ | 57 | $ | 57 | $ | 477 | $ | 467 | $ | 881 |
Past performance is no guarantee of future results.
(a) Rounds to less than $0.001 per share.
(b) Total return at net asset value assuming all distributions reinvested.
(c) 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.
(d) 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.
(e) The benefits derived from expense reductions had an impact of less than 0.01%.
See Accompanying Notes to Financial Statements.
12
Financial Highlights – BofA New York Tax-Exempt Reserves
Selected data for a share outstanding throughout each period is as follows:
Year Ended August 31, | |||||||||||||||||||||||
Investor Class Shares | 2015 | 2014 | 2013 | 2012 (a) | 2011 | ||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||
Net investment income | — | — | — | — | — | ||||||||||||||||||
Net realized gain (loss) on investments | — | — | (b) | — | (b) | — | (b) | — | |||||||||||||||
Total from investment operations | — | — | (b) | — | (b) | — | (b) | — | |||||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||
From net investment income | — | (b) | — | (b) | — | (b) | — | (b) | — | ||||||||||||||
From net realized gains | — | (b) | — | (b) | — | — | (b) | — | |||||||||||||||
Total distributions to shareholders | — | (b) | — | (b) | — | (b) | — | (b) | — | ||||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Total return (c)(d) | 0.01 | % | 0.01 | % | 0.01 | % | 0.05 | % | 0.00 | % | |||||||||||||
Ratios to Average Net Assets/Supplemental Data: | |||||||||||||||||||||||
Gross expenses | 0.69 | % | 0.69 | % | 0.69 | % | 0.68 | % | 0.80 | % | |||||||||||||
Net expenses | 0.12 | % | 0.15 | % | 0.21 | %(e) | 0.26 | %(e) | 0.31 | %(e) | |||||||||||||
Waiver/Reimbursement | 0.57 | % | 0.54 | % | 0.48 | % | 0.42 | % | 0.49 | % | |||||||||||||
Net investment income | — | — | — | (e) | — | (e) | — | (e) | |||||||||||||||
Net assets, end of period (000s) | $ | 4,479 | $ | 1,033 | $ | 1,448 | $ | 1,663 | $ | 365 |
Past performance is no guarantee of future results.
(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) 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) The benefits derived from expense reductions had an impact of less than 0.01%.
See Accompanying Notes to Financial Statements.
13
Financial Highlights – BofA New York Tax-Exempt Reserves
Selected data for a share outstanding throughout each period is as follows:
Year Ended August 31, | |||||||||||||||||||||||
Trust Class Shares | 2015 | 2014 | 2013 | 2012 | 2011 | ||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||
Net investment income | — | — | — | 0.001 | — | (a) | |||||||||||||||||
Net realized gain (loss) on investments | — | — | (a) | — | (a) | — | (a) | — | |||||||||||||||
Total from investment operations | — | — | (a) | — | (a) | 0.001 | — | (a) | |||||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||
From net investment income | — | (a) | — | (a) | — | (a) | (0.001 | ) | — | (a) | |||||||||||||
From net realized gains | — | (a) | — | (a) | — | — | (a) | — | |||||||||||||||
Total distributions to shareholders | — | (a) | — | (a) | — | (a) | (0.001 | ) | — | (a) | |||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Total return (b)(c) | 0.01 | % | 0.01 | % | 0.01 | % | 0.05 | % | 0.05 | % | |||||||||||||
Ratios to Average Net Assets/Supplemental Data: | |||||||||||||||||||||||
Gross expenses | 0.44 | % | 0.44 | % | 0.44 | % | 0.43 | % | 0.45 | % | |||||||||||||
Net expenses | 0.12 | % | 0.15 | % | 0.21 | %(d) | 0.26 | %(d) | 0.29 | %(d) | |||||||||||||
Waiver/Reimbursement | 0.32 | % | 0.29 | % | 0.23 | % | 0.17 | % | 0.16 | % | |||||||||||||
Net investment income | — | — | — | (d) | — | %(d)(e) | 0.05 | %(d) | |||||||||||||||
Net assets, end of period (000s) | $ | 211,797 | $ | 197,297 | $ | 213,347 | $ | 259,254 | $ | 294,169 |
Past performance is no guarantee of future results.
(a) Rounds to less than $0.001 per share.
(b) Total return at net asset value assuming all distributions reinvested.
(c) 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.
(d) The benefits derived from expense reductions had an impact of less than 0.01%.
(e) Rounds to less than 0.01%.
See Accompanying Notes to Financial Statements.
14
Notes to Financial Statements – BofA New York Tax-Exempt Reserves
August 31, 2015
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.
The Fund is an investment company and accordingly follows the investment company accounting and reporting guidance of the Financial Accounting Standards Board (FASB) Accounting Standard Codification Topic 946 Financial Services—Investment Companies.
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 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). These investments may trade in markets that are not considered to be active, but whose values are supported by observable inputs such as U.S. government obligations and agency securities, investment-grade corporate bonds and state, municipal and provincial obligations. For money market funds operating under Rule 2a-7 of the
15
BofA New York Tax-Exempt Reserves, August 31, 2015
1940 Act, securities are valued at amortized cost which approximates market value and are considered to be valued using Level 2 inputs.
• Level 3 – Prices determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable or less reliable, unobservable inputs may be used. Unobservable inputs may include management's own assumptions about the factors market participants would use in pricing an investment.
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
Security Transactions
Security transactions are accounted for on the trade date. Cost is determined and gains (losses) are based upon the specific identification method for both financial statement and federal income tax purposes.
Income Recognition
Interest income is recorded on the accrual basis. Premium and discount are amortized and accreted, respectively, on all debt securities, unless otherwise noted.
Expenses
General expenses of the Trust are allocated to the 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. Expenses directly attributable to a specific class of shares are charged to that share class.
Determination of Class Net Asset Value
All income, expenses (other than class-specific expenses, which are charged to that share class, as shown on the Statement of Operations) and realized 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 based on the following methodologies: income and expenses are allocated to each class based on the settled shares method, while realized gains (losses) are allocated based on the relative net assets of each class.
Federal Income Tax Status
The Fund intends to qualify each year as a "regulated investment company" under Subchapter M of the Internal Revenue Code, as amended, and to distribute substantially all of its tax-exempt or taxable income, if any, for its tax year, and as such will not be subject to federal income taxes. In addition, the Fund intends to distribute in each calendar year substantially all of its net investment income, capital gains and certain other amounts, if any, such that the Fund 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.
16
BofA New York Tax-Exempt Reserves, August 31, 2015
The tax character of distributions paid during the years ended August 31, 2015 and August 31, 2014 were as follows:
August 31, | |||||||||||
Distributions paid from | 2015 | 2014 | |||||||||
Tax-Exempt Income | $ | 512 | $ | 21,186 | |||||||
Ordinary Income* | $ | 23,618 | $ | 3 | |||||||
Long-Term Capital Gains | $ | — | $ | 13,574 |
* 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
BofA Advisors, LLC (the "Advisor"), an indirect, wholly owned subsidiary of Bank of America Corporation ("BofA Corp."), 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 | % |
For the year ended August 31, 2015, 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.
17
BofA New York Tax-Exempt Reserves, August 31, 2015
For the year ended August 31, 2015, the 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.
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, 2015. There is no guarantee that this expense limitation will continue after such date.
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 (together, 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 the 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.
Distribution and Shareholder Servicing Fees
BofA Distributors, Inc. (the "Distributor"), an affiliate of the Advisor and an indirect, wholly owned subsidiary of BofA Corp., 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 sales support services. The Distributor is entitled to retain some or all fees payable under the Distribution Plan in certain circumstances, including but not limited to, instances when there is no broker of record or when certain qualification standards have not been met by the broker of record. In certain instances, payments will continue to be made pursuant to the Distribution Plan with respect to shares held in classes that are closed to new investors and shares held by specific investors who are not eligible to make additional purchases in a particular share class.
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 the Fund. A substantial portion of the expenses incurred pursuant to
18
BofA New York Tax-Exempt Reserves, August 31, 2015
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, 2015, so that the
Fund's ordinary operating expenses (excluding any acquired fund fees and expenses, 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 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 August 31, 2015, the amounts potentially recoverable pursuant to this arrangement are as follows:
Amount of potential recovery expiring August 31: | Total potential | Amount recovered during the year | |||||||||||||||||
2018 | 2017 | 2016 | recovery | ended 08/31/2015 | |||||||||||||||
$ | 389,031 | $ | 405,813 | $ | 460,655 | $ | 1,255,499 | $ | — |
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%. Pursuant to a September 25, 2015 amendment, an annual administration fee of $25,000 is also accrued and apportioned to each fund participating in the line of credit based on the average net assets of the participating funds. Prior to the September 25, 2015 amendment, an annual administration fee of $10,000 was accrued and apportioned to each participating fund under the same terms.
19
BofA New York Tax-Exempt Reserves, August 31, 2015
For the year ended August 31, 2015, 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.
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.
Note 8. Money Market Fund Regulatory Matters
On July 23, 2014, the Securities and Exchange Commission voted to amend Rule 2a-7, which governs money market funds (such as the Fund). The majority of these amendments take effect in 2016. The most significant change is a requirement that institutional (i.e. large volume institutions such as banks, trusts, insurance companies, etc.) prime and institutional municipal money market funds move to a floating net asset value. Retail (i.e. a money market mutual fund that has policies and procedures reasonably designed to
20
BofA New York Tax-Exempt Reserves, August 31, 2015
limit all beneficial owners of the money market fund to natural persons) prime, municipal, government and treasury money market funds will continue to transact at a stable $1.00 share price. In addition, the boards of trustees of non-government money market funds may impose a temporary liquidity fee of up to 2% of the value of a redemption and/or suspend (or "gate") redemptions temporarily should a money market fund's level of weekly liquid assets fall below 30% of its total assets. At this time, the Fund's management is evaluating the implications of the reforms and their impact on the Fund, including potential effects on the Fund's operations and returns.
21
Report of Independent Registered Public Accounting Firm
To the Trustees of BofA Funds Series Trust and Shareholders of BofA New York Tax-Exempt Reserves
In our opinion, the accompanying statement of assets and liabilities, including the investment portfolio, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of BofA New York Tax-Exempt Reserves (the "Fund") (a series of BofA Funds Series Trust) at August 31, 2015, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and the financial highlights for each of the periods indicated, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as "financial statements") are the responsibility of the Fund's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at August 31, 2015 by correspondence with the custodian, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
Boston, Massachusetts
October 21, 2015
22
Federal Income Tax Information (Unaudited) – BofA New York Tax-Exempt Reserves
For the fiscal year ended August 31, 2015, 2.12% of the distributions from net investment income of the Fund qualifies as exempt interest dividends for federal income tax purposes. A portion of the income may be subject to federal alternative minimum tax.
The Fund will notify shareholders in January 2016 of amounts for use in preparing 2015 income tax returns.
23
Fund Governance
The Trustees serve terms of indefinite duration. The names, addresses and ages of the Trustees and officers of the Funds in the BofA Funds Series Trust, the year each was first elected or appointed to office, their principal business occupations during at least the last five years, the number of Funds overseen by each Trustee and other directorships they hold are shown below. Each officer listed below serves as an officer of each Fund in the BofA Funds Series Trust.
Independent Trustees
Name, Address, and Year of Birth, Position with Funds, Year First Elected or Appointed to Office | Principal Occupation(s) During Past Five Years, Number of Funds in BofA Funds Series Trust Overseen by Trustee, Other Directorships Held | ||||||
Harrison M. Bains (Born 1943) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Trustee (since 2011) | Retired. Oversees 11 Funds. Mercer Funds (9 funds); BG Medicine, Inc. (life sciences). | ||||||
Paul Glasserman (Born 1962) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Trustee (since 2011) | Jack R. Anderson Professor of Business—Columbia Business School, since 2000 (Senior Vice Dean, 2004-2008; Professor, 1995-2000); Visiting Scholar—Federal Reserve Bank of New York, from 2008 to 2012; Consultant to the U.S. Treasury, 2011-2014; Independent consultant to financial firms since 1995. Oversees 11 Funds. | ||||||
William A. Hawkins (Born 1942) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Trustee (since 2005)1 | Managing Director—Overton Partners (financial consulting), August 2010 to present. Oversees 11 Funds. Columbia Funds (127 funds). | ||||||
R. Glenn Hilliard (Born 1943) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Trustee (since 2005)1 | Chairman and Chief Executive Officer—Hilliard Group LLC (investing and consulting), from 2003 through current; Non-Executive Director & Chairman—CNO Financial Group, Inc. (formerly Conseco, Inc.) (insurance), September 2003-May 2011. Oversees 11 Funds. Columbia Funds (127 funds). | ||||||
William J. Kelly (Born 1960) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Trustee (since 2011) | Chief Executive Officer—Chartered Alternative Investment Analyst Association, January 2014 to present. Oversees 11 Funds. | ||||||
Debra Perry (Born 1951) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Trustee (since 2011) | Retired. Managing Member—Perry Consulting LLC (advisory firm), from 2008 through 2014. Oversees 11 Funds. Korn/Ferry International (recruiting); Sanford C. Bernstein Fund, Inc. (18 funds); Board Member—PartnerRE (reinsurance). |
1 Includes service as trustees of Columbia Funds Series Trust, the predecessor trust.
The Statement of Additional Information includes additional information about the Trustees of the Funds and is available, without charge, upon request by calling 888-331-0904. (Institutional Investors, please call 800-353-0828.)
24
Fund Governance (continued)
Officers
Name, Address, and Year of Birth, Position with Funds, Year First Elected or Appointed to Office | Principal Occupation(s) During Past Five Years | ||||||
Michael J. Pelzar (Born 1968) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 President (since 2010) | President, BofA Global Capital Management Group, LLC since May 2010; Managing Director and Head of Product Management of the Advisor from 2007 to 2010. | ||||||
Kenneth B. Crotty (Born 1961) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Vice President (since 2015) Assistant Treasurer (2014-2015) | Chief Operating Officer, BofA Global Capital Management Group, LLC since August 2013; President KBC Consulting 2012-2013; Global Chief Operating Officer of Mercer Investments and President of Mercer Investments US 2006-2012. | ||||||
Jeffrey R. Coleman (Born 1969) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Senior Vice President, Chief Financial Officer, Chief Accounting Officer (since 2010) and Treasurer (since 2009) | Managing Director of Fund Administration and Transfer Agency Oversight of the Advisor since May 2010; Director of Fund Administration of the Advisor since January 2006. | ||||||
Marina Belaya (Born 1967) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Secretary and Chief Legal Officer (since 2013) | Assistant General Counsel, Director, Bank of America since July 2007. | ||||||
James R. Bordewick (Born 1959) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Senior Vice President and Chief Compliance Officer (since 2010) | Chief Compliance Officer of U.S. Trust, Bank of America Private Wealth Management since 2012; Chief Compliance Officer of the Advisor and Managing Director, Bank of America since May 2010. | ||||||
Barry S. Vallan (Born 1969) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Deputy Treasurer (since 2010) and Controller (since 2006) | Director of Fund Administration of the Advisor since May 2010; Vice President—Fund Treasury of the Advisor since October 2004; Vice President—Fund Administration of the Advisor since May 2002. |
25
Fund Governance (continued)
Officers (continued)
Name, Address, and Year of Birth, Position with Funds, Year First Elected or Appointed to Office | Principal Occupation(s) During Past Five Years | ||||||
Patrick Campbell (Born 1957) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Vice President (since 2015) Assistant Treasurer (2010-2015) | Director of Transfer Agency Oversight, BofA Global Capital Management Group, LLC since May 2010. | ||||||
Rana J. Wright (Born 1978) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Assistant Secretary (since 2014) | Assistant General Counsel and Director, Bank of America, and Chief Legal Officer, BofA Global Capital Management Group, LLC, since June 2014; Partner, Reed Smith LLP, 2012 to 2014; Associate, Reed Smith LLP, 2003 to 2011. | ||||||
Nitin Mehra (Born 1977) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Vice President (since 2015) Assistant Treasurer (2013-2015) | Managing Director and Head of Strategy and Product at BofA Global Capital Management Group, LLC since May 2011; Managing Director of Strategy and Product at BofA Global Capital Management Group, LLC from 2010-2011; Director of Product Strategy and Development of the Advisor from 2008-2010. |
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 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.
An investment in money market mutual funds is not insured or guaranteed by Bank of America, N.A. or its affiliates, or by the Federal Deposit Insurance Corporation or any other government agency. Although money market mutual funds seek to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in money market mutual funds.
BofA® 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
BofA Global Capital Management
100 Federal Street
Boston, MA 02110
Questions or comments regarding your account or investment in the Funds should be directed to:
Boston Financial Data Services
P.O. Box 8723
Boston, MA 02266-8723
Retail Investors: 888.331.0904
Institutional Investors: 800.353.0828
BofA New York Tax-Exempt Reserves
Annual Report, August 31, 2015
© 2015 Bank of America Corporation. All rights reserved.
BofA Distributors, Inc.
100 Federal Street, Boston, MA 02110
888.331.0904 (Institutional Investors: 800.353.0828) www.bofacapital.com
AR-NYTE-1015
BofA Funds
Annual Report
August 31, 2015
• 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 | ||||||
Report of Independent Registered Public Accounting Firm | 42 | ||||||
Federal Income Tax Information | 43 | ||||||
Fund Governance | 44 | ||||||
Important Information About This Report | 49 |
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.
President's Message
To Our Valued Shareholders:
A year ago the consensus within the financial community was that the interest rate environment would soon be more hospitable to money market fund investors as a strengthening U.S. economy finally moved the Federal Reserve ("the Fed") to raise short-term interest rates. That rate hike has yet to materialize, so for liquidity investors, the most important news out of Washington has come not from the Fed, but from the U.S. Securities and Exchange Commission ("SEC"), which adopted sweeping changes to the regulations governing U.S. money market funds.
To take effect in October 2016, the amendments to Rule 2a-7 under the Investment Company Act of 1940 include two important reforms that are prompting investors to reevaluate their liquidity investment strategies:
• Institutional prime and institutional municipal money market funds must "float" their net asset values ("NAVs"), which means the value of the funds' shares would be based on the market value of their underlying securities. Only government funds and funds serving retail investors—defined as "natural persons"—would retain their stable, $1-per-share NAVs.
• The boards of trustees of non-government money market funds may impose a temporary liquidity fee of up to 2% of the value of a redemption or to suspend or "gate" redemptions temporarily should a money market fund's level of weekly liquid assets fall below 30% of its total assets.
These changes are part of a multi-year effort on the part of the SEC to make money market funds more resilient during market crises, when heavy redemption activity can exert strong downward pressure on funds' NAVs.
After extensive analysis, we have concluded that the impact of the rule changes will be less significant than many investors first believed. With regard to floating NAV funds, for example, fund managers still will go to great lengths to maintain the $1-per-share NAV after the floating NAV rule takes effect. If there is any movement around the $1 mark, that variation likely would be very limited under normal market conditions because of the preponderance of short-term, high-quality securities in money market funds. As for liquidity fees and redemption gates, these measures would be a last resort for fund managers because of the reputational damage money market fund companies would incur were they to impose these measures.
Recognizing the importance of money market fund reform to our shareholders, BofA Global Capital Management has launched a series of whitepapers analyzing the potential impact of the rule changes on clients' liquidity-management programs. These papers are available at www.bofacapital.com. Our preparations for the implementation of the reforms are proceeding, and we anticipate no problems meeting the October 2016 compliance deadline.
Shifting back to the macroeconomic environment, the Fed held the benchmark federal funds rate steady in September, but we believe the drop in the U.S. unemployment rate and steady economic growth should allow the central bank to begin increasing the federal funds rate from the current 0% to .25% rate—in the near future. This, in our view, will mark the beginning of a gradual increase in rates that over time should translate into potentially more attractive yields for money market fund investors. We are positioning the BofA Funds to capture the potential benefits of a rising-rate environment.
Given the complexity of modern financial markets and the ever-present threat of unforeseen investment challenges, the managers of the BofA Funds will continue to employ a conservative investment process designed to achieve your most important goals: principal protection, a high degree of liquidity and competitive risk-adjusted yields. We believe our conservative investment posture; our focus on the management of liquidity investments; and the resources available to us as part of one of the world's largest financial institutions position BofA Global Capital Management to help you reach your liquidity objectives.
On behalf of everyone at BofA Global Capital Management, I thank you for the opportunity to have served you over the past year. We appreciate your business, and we look forward to working with you in the months and years ahead.
Sincerely,
Michael Pelzar
President, BofA Global Capital Management
ARQ5HMRY
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:
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 $1,000. Please refer to the Fund's prospectus for additional details.
3/1/15 – 8/31/15 (Unaudited)
Account value at the beginning of the period ($) | 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 | 1,024.75 | 0.45 | 0.46 | 0.09 | ||||||||||||||||||||||||
Capital Class Shares | 1,000.00 | 1,000.00 | 1,000.00 | 1,024.75 | 0.45 | 0.46 | 0.09 | ||||||||||||||||||||||||
Daily Class Shares | 1,000.00 | 1,000.00 | 1,000.00 | 1,024.75 | 0.45 | 0.46 | 0.09 | ||||||||||||||||||||||||
Institutional Capital Shares | 1,000.00 | 1,000.00 | 1,000.00 | 1,024.75 | 0.45 | 0.46 | 0.09 | ||||||||||||||||||||||||
Institutional Class Shares | 1,000.00 | 1,000.00 | 1,000.00 | 1,024.75 | 0.45 | 0.46 | 0.09 | ||||||||||||||||||||||||
Investor Class Shares | 1,000.00 | 1,000.00 | 1,000.00 | 1,024.70 | 0.50 | 0.51 | 0.10 | ||||||||||||||||||||||||
Liquidity Class Shares | 1,000.00 | 1,000.00 | 1,000.00 | 1,024.75 | 0.45 | 0.46 | 0.09 | ||||||||||||||||||||||||
Trust Class Shares | 1,000.00 | 1,000.00 | 1,000.00 | 1,024.75 | 0.45 | 0.46 | 0.09 |
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
August 31, 2015
Municipal Bonds – 97.8% | |||||||||||
Par ($) | Value ($) | ||||||||||
Alabama – 0.8% | |||||||||||
AL Tuscaloosa County Industrial Development Authority | |||||||||||
Hunt Refining Company, Series 2011 A LOC: Sumitomo Mitsui Banking 0.020% 06/01/28 (09/02/15) (a)(b) | 30,000,000 | 30,000,000 | |||||||||
Alabama Total | 30,000,000 | ||||||||||
Alaska – 1.4% | |||||||||||
AK Anchorage | |||||||||||
Series 2015 0.500% 09/17/15 | 53,500,000 | 53,509,966 | |||||||||
Alaska Total | 53,509,966 | ||||||||||
Arizona – 0.7% | |||||||||||
AZ Eclipse Funding Trust | |||||||||||
Series 2007 LOC: U.S. Bank N.A. LIQ FAC: U.S. Bank N.A. 0.030% 12/22/16 (09/03/15) (a)(b)(c) | 21,025,000 | 21,025,000 | |||||||||
AZ Phoenix Industrial Development Authority | |||||||||||
Pilgrim Rest Foundation, Inc., Series 2005 A, LOC: JPMorgan Chase Bank 0.060% 10/01/30 (09/03/15) (a)(b) | 5,180,000 | 5,180,000 | |||||||||
AZ Tempe Industrial Development Authority | |||||||||||
Centers for Habilitation, Series 2001, LOC: Wells Fargo Bank N.A. 0.170% 12/01/21 (09/03/15) (a)(b) | 1,185,000 | 1,185,000 | |||||||||
Arizona Total | 27,390,000 | ||||||||||
Arkansas – 0.2% | |||||||||||
AR Fort Smith | |||||||||||
Mitsubishi Power System of America, Series 2010, LOC: Bank Tokyo-Mitsubishi UFJ 0.070% 10/01/40 (09/03/15) (a)(b) | 5,930,000 | 5,930,000 | |||||||||
Arkansas Total | 5,930,000 |
Par ($) | Value ($) | ||||||||||
California – 4.1% | |||||||||||
CA Antelope Valley-East Kern Water Agency | |||||||||||
Series 2008 A-2, LOC: Wells Fargo Bank N.A. 0.010% 06/01/37 (09/03/15) (a)(b) | 16,500,000 | 16,500,000 | |||||||||
CA County of Riverside | |||||||||||
Series 2015 2.000% 06/30/16 | 4,000,000 | 4,056,449 | |||||||||
CA Golden Empire Schools Financing Authority | |||||||||||
Kern High School District Series 2015 0.220% 05/01/16 (09/03/15) (b)(d) | 27,950,000 | 27,950,420 | |||||||||
CA Irvine Ranch Water District | |||||||||||
Series 2011 A-1, 0.050% 10/01/37 (09/03/15) (b)(d) | 12,300,000 | 12,300,000 | |||||||||
CA Los Angeles Department of Water & Power | |||||||||||
Series 2001 B-3 SPA: Royal Bank of Canada 0.010% 07/01/35 (09/03/15) (a)(b) | 10,000,000 | 10,000,000 | |||||||||
CA Pollution Control Financing Authority | |||||||||||
Pacific Gas & Electric Co.: Series 1996 E, LOC: JPMorgan Chase Bank 0.010% 11/01/26 (09/01/15) (a)(b) | 2,300,000 | 2,300,000 | |||||||||
Series 1996, LOC: JPMorgan Chase Bank 0.010% 11/01/26 (09/01/15) (a)(b) | 3,400,000 | 3,400,000 | |||||||||
CA RBC Municipal Products, Inc. Trust | |||||||||||
Kaiser Permanente, Series 2011 E-21, LOC: Royal Bank of Canada 0.020% 10/01/15 (09/03/15) (a)(b)(c) | 12,400,000 | 12,400,000 | |||||||||
CA Sequoia Union High School District | |||||||||||
Series 2015 1.000% 06/30/16 | 7,960,000 | 8,005,985 |
See Accompanying Notes to Financial Statements.
2
BofA Tax-Exempt Reserves
August 31, 2015
Municipal Bonds (continued) | |||||||||||
Par ($) | Value ($) | ||||||||||
CA Statewide Communities Development Authority | |||||||||||
0.140% 10/06/15 | 20,000,000 | 20,000,000 | |||||||||
Kaiser Permanente: Series 9B-4 0.140% 10/07/15 | 28,000,000 | 28,000,000 | |||||||||
Series K 0.230% 01/06/16 | 5,000,000 | 5,000,000 | |||||||||
Painted Turtle Gang Foundation, Series 2003, LOC: Wells Fargo Bank N.A. 0.010% 04/01/33 (09/03/15) (a)(b) | 2,400,000 | 2,400,000 | |||||||||
CA State | |||||||||||
Kindergarten, Series 2004 A3, LOC: State Street Bank & Trust Co., 0.010% 05/01/34 (09/01/15) (a)(b) | 1,800,000 | 1,800,000 | |||||||||
California Total | 154,112,854 | ||||||||||
Colorado – 2.8% | |||||||||||
CO Educational & Cultural Facilities Authority | |||||||||||
Flying J Ranch LLC, National Jewish Federation Board, Series 2006 C2, LOC: U.S. Bank N.A. 0.010% 03/01/36 (09/01/15) (a)(b) | 2,700,000 | 2,700,000 | |||||||||
CO Jefferson County | |||||||||||
Rocky Mountain Butterfly Consortium, Series 1998, LOC: Wells Fargo Bank N.A. 0.120% 06/01/28 (09/03/15) (a)(b) | 1,205,000 | 1,205,000 | |||||||||
CO RBC Municipal Products, Inc. Trust | |||||||||||
Series 2015 E-55, LOC: Royal Bank of Canada LIQ FAC: Royal Bank of Canada 0.110% 04/01/19 (09/03/15) (a)(b)(c) | 26,225,000 | 26,225,000 | |||||||||
CO RIB Floater Trust | |||||||||||
Series 2015 LOC: Barclays Bank PLC 0.170% 08/01/18 (09/03/15) (a)(b)(c) | 26,000,000 | 26,000,000 |
Par ($) | Value ($) | ||||||||||
CO Tender Option Bond Trust Receipts/Certificates | |||||||||||
Series 2012 LIQ FAC: State Street Bank & Trust Co., 0.020% 11/15/30 (09/03/15) (a)(b)(c) | 9,810,000 | 9,810,000 | |||||||||
CO University of Hospital Authority | |||||||||||
Series 2011 A LOC: Wells Fargo Bank N.A. 0.020% 11/15/41 (09/02/15) (a)(b) | 38,700,000 | 38,700,000 | |||||||||
Colorado Total | 104,640,000 | ||||||||||
Connecticut – 1.5% | |||||||||||
CT Enfield | |||||||||||
Series 2015 B 2.000% 08/10/16 | 5,000,000 | 5,075,350 | |||||||||
CT Fairfield | |||||||||||
Series 2015 2.000% 07/14/16 | 20,020,000 | 20,313,715 | |||||||||
CT Health & Educational Facilities Authority | |||||||||||
The Hotchkiss School, Series 2000 A, SPA: U.S. Bank N.A. 0.010% 07/01/30 (09/03/15) (a)(b) | 1,300,000 | 1,300,000 | |||||||||
The Taft School, Series 2000 E, LOC: Wells Fargo Bank N.A. 0.040% 07/01/30 (09/02/15) (a)(b) | 2,700,000 | 2,700,000 | |||||||||
Wesleyan University, Series 2010, LIQ FAC: Citibank N.A. 0.020% 01/01/18 (09/03/15) (a)(b)(c) | 2,300,000 | 2,300,000 | |||||||||
Westover School, Series 2007 B, LOC: TD Bank N.A. 0.010% 07/01/30 (09/03/15) (a)(b) | 1,485,000 | 1,485,000 | |||||||||
Yale University, Series 2001 V-2, 0.010% 07/01/36 (09/01/15) (b)(d) | 1,610,000 | 1,610,000 |
See Accompanying Notes to Financial Statements.
3
BofA Tax-Exempt Reserves
August 31, 2015
Municipal Bonds (continued) | |||||||||||
Par ($) | Value ($) | ||||||||||
CT Housing Finance Authority | |||||||||||
Series 2009 A-1, SPA: JPMorgan Chase Bank 0.010% 05/15/39 (09/01/15) (a)(b) | 5,800,000 | 5,800,000 | |||||||||
CT Manchester | |||||||||||
Series 2015 1.250% 02/23/16 | 4,700,000 | 4,721,643 | |||||||||
CT Oxford | |||||||||||
Series 2015 1.250% 07/21/16 | 5,000,000 | 5,038,809 | |||||||||
CT Special Tax Revenue | |||||||||||
Series 2013, LIQ FAC: Citibank N.A. 0.020% 01/01/21 (09/03/15) (a)(b)(c) | 6,500,000 | 6,500,000 | |||||||||
Connecticut Total | 56,844,517 | ||||||||||
Delaware – 0.8% | |||||||||||
DE BB&T Municipal Trust | |||||||||||
Series 2008-1007, LOC: Branch Banking & Trust 0.120% 04/10/22 (09/03/15) (a)(b)(c) | 12,730,000 | 12,730,000 | |||||||||
Series 2008-1033, LOC: Branch Banking & Trust 0.120% 06/01/24 (09/03/15) (a)(b) | 3,530,000 | 3,530,000 | |||||||||
DE New Castle County | |||||||||||
CHF-Delaware LLC, University Courtyard Apartments, Series 2005, LOC: PNC Bank N.A. 0.020% 08/01/31 (09/03/15) (a)(b) | 15,090,000 | 15,090,000 | |||||||||
Delaware Total | 31,350,000 | ||||||||||
District of Columbia – 1.2% | |||||||||||
DC District of Columbia | |||||||||||
American University, Series 2006 B LOC: Royal Bank of Canada 0.020% 10/01/36 (09/03/15) (a)(b) | 9,000,000 | 9,000,000 |
Par ($) | Value ($) | ||||||||||
Medstar Health, Inc., Series 1998 A LOC: TD Bank N.A. 0.010% 08/15/38 (09/02/15) (a)(b) | 5,275,000 | 5,275,000 | |||||||||
DC Washington Metropolitan Airports Authority | |||||||||||
Series 2010 C-2, LOC:Barclays Bank PLC 0.020% 10/01/39 (09/03/15) (a)(b) | 20,890,000 | 20,890,000 | |||||||||
DC Water & Sewer Authority | |||||||||||
Series B GTY AGMT: Landesbank Hessen-Thüringen 0.050% 10/02/15 | 9,700,000 | 9,700,000 | |||||||||
District of Columbia Total | 44,865,000 | ||||||||||
Florida – 9.4% | |||||||||||
FL Broward County Health Facilities Authority | |||||||||||
Henderson Mental Health Center, Series 2004, LOC: Northern Trust Company 0.050% 07/01/29 (09/02/15) (a)(b) | 3,800,000 | 3,800,000 | |||||||||
FL County of Polk | |||||||||||
Series 2005 Pre-refunded 02/01/15 Escrowed in U.S. Treasuries 5.000% 12/01/33 | 2,000,000 | 2,023,166 | |||||||||
FL Eclipse Funding Trust | |||||||||||
Miami-Dade County School Board, Series 2007, LOC: U.S. Bank N.A. 0.030% 05/01/32 (09/03/15) (a)(b)(c) | 4,420,000 | 4,420,000 | |||||||||
Volusia County School Board Series 2007, LOC: U.S. Bank N.A. 0.120% 08/01/32 (11/25/15) (a)(b)(c) | 20,395,000 | 20,395,000 | |||||||||
FL Gainesville Utilities System Revenue | |||||||||||
Series 2012 B LOC: Sumitomo Mitsui Banking 0.010% 10/01/42 (09/02/15) (a)(b) | 18,500,000 | 18,500,000 |
See Accompanying Notes to Financial Statements.
4
BofA Tax-Exempt Reserves
August 31, 2015
Municipal Bonds (continued) | |||||||||||
Par ($) | Value ($) | ||||||||||
FL Highlands County Health Facilities Authority | |||||||||||
Adventist Health: Series 2012 I-2 0.010% 11/15/32 (09/03/15) (b)(d) | 28,600,000 | 28,600,000 | |||||||||
Series 2012 I-3 0.020% 11/15/33 (09/03/15) (b)(d) | 23,500,000 | 23,500,000 | |||||||||
FL Hillsborough County School Board | |||||||||||
Master Lease, Series 2008 C, LOC: Wells Fargo Bank N.A. 0.010% 07/01/30 (09/01/15) (a)(b) | 6,100,000 | 6,100,000 | |||||||||
FL Jacksonville Economic Development Commission | |||||||||||
North Florida Shipyards, Inc., Series 2010, LOC: Branch Banking & Trust 0.020% 09/01/20 (09/03/15) (a)(b) | 2,505,000 | 2,505,000 | |||||||||
FL JEA Electric System Revenue | |||||||||||
Series 2010 E 4.000% 10/01/15 | 3,065,000 | 3,074,326 | |||||||||
FL Lakeland | |||||||||||
Florida Southern College, Series 2012 B, LOC: TD Bank N.A. 0.020% 09/01/24 (09/03/15) (a)(b) | 8,040,000 | 8,040,000 | |||||||||
FL Miami-Dade County Educational Facilities Authority | |||||||||||
University of Miami, Series 2008-2710, GTY AGMT: Wells Fargo Co., LIQ FAC: Wells Fargo Co. 0.040% 04/01/38 (09/03/15) (a)(b)(c) | 14,820,000 | 14,820,000 | |||||||||
FL Miami-Dade County Industrial Development Authority | |||||||||||
Dave & Mary Alper Jewish Community, Series 2002, LOC: Northern Trust Company 0.050% 04/01/32 (09/02/15) (a)(b) | 5,695,000 | 5,695,000 | |||||||||
FL Miami-Dade County | |||||||||||
Series 2003 B LOC: TD Bank N.A. 0.020% 04/01/43 (09/02/15) (a)(b) | 8,200,000 | 8,200,000 |
Par ($) | Value ($) | ||||||||||
FL Palm Beach County | |||||||||||
Pine Crest Prep School, Series 2012 B, LOC: TD Bank N.A. 0.020% 06/01/38 (09/03/15) (a)(b) | 27,775,000 | 27,775,000 | |||||||||
Zoological Society of Palm Beach, Series 2001, LOC: Northern Trust Company 0.050% 05/01/31 (09/03/15) (a)(b) | 7,450,000 | 7,450,000 | |||||||||
FL RBC Municipal Products, Inc. Trust | |||||||||||
Series 2015 E-56 LOC: Royal Bank of Canada LIQ FAC: Royal Bank of Canada 0.110% 01/09/17 (09/03/15) (a)(b)(c) | 9,500,000 | 9,500,000 | |||||||||
Series 2015 E-62 LOC: Royal Bank of Canada LIQ FAC: Royal Bank of Canada 0.110% 12/01/17 (09/03/15) (a)(b)(c) | 39,500,000 | 39,500,000 | |||||||||
Series 2015 E-64 LOC: Royal Bank of Canada LIQ FAC: Royal Bank of Canada 0.110% 01/09/17 (09/03/15) (a)(b)(c) | 42,265,000 | 42,265,000 | |||||||||
Series 2015 E-65 LOC: Royal Bank of Canada LIQ FAC: Royal Bank of Canada 0.110% 01/09/17 (09/03/15) (a)(b)(c) | 4,995,000 | 4,995,000 | |||||||||
FL RIB Floater Trust | |||||||||||
Series 2015 LOC: Barclays Bank PLC 0.150% 05/01/18 (09/03/15) (a)(b)(c) | 49,250,000 | 49,250,000 | |||||||||
FL Sunshine State Governmental Financing Commission | |||||||||||
0.120% 10/09/15 | 19,125,000 | 19,125,000 | |||||||||
Florida Total | 349,532,492 | ||||||||||
Georgia – 2.8% | |||||||||||
GA BB&T Municipal Trust | |||||||||||
Series 2008-1014, LOC: Branch Banking & Trust 0.120% 09/01/23 (09/03/15) (a)(b)(c) | 14,585,000 | 14,585,000 |
See Accompanying Notes to Financial Statements.
5
BofA Tax-Exempt Reserves
August 31, 2015
Municipal Bonds (continued) | |||||||||||
Par ($) | Value ($) | ||||||||||
GA Clipper Tax-Exempt Certificate Trust | |||||||||||
Georgia State, Series 2007, Pre-refunded in U.S. Treasuries, LIQ FAC: State Street Bank & Trust Co. 0.020% 03/01/18 (09/03/15) (a)(b) | 9,995,000 | 9,995,000 | |||||||||
GA Main Street Natural Gas, Inc. | |||||||||||
Series 2010 A1 GTY AGMT: Royal Bank of Canada SPA: Royal Bank of Canada 0.080% 08/01/40 (09/03/15) (a)(b) | 39,000,000 | 39,000,000 | |||||||||
Series 2010 A2 GTY AGMT: Royal Bank of Canada SPA: Royal Bank of Canada 0.080% 08/01/40 (09/03/15) (a)(b) | 38,790,000 | 38,790,000 | |||||||||
GA Municipal Electric Authority | |||||||||||
Series 2008 B, LOC: Bank of Tokyo-Mitsubishi UFJ 0.010% 01/01/48 (09/02/15) (a)(b) | 4,200,000 | 4,200,000 | |||||||||
Georgia Total | 106,570,000 | ||||||||||
Illinois – 2.5% | |||||||||||
IL Chicago Heights | |||||||||||
Chicago Heights Fitness, Series 2002 A, LOC: JPMorgan Chase Bank 0.110% 03/01/17 (09/03/15) (a)(b) | 425,000 | 425,000 | |||||||||
IL Development Finance Authority | |||||||||||
American Academy of Dermatology, Series 2001, LOC: JPMorgan Chase Bank 0.060% 04/01/21 (09/03/15) (a)(b) | 3,000,000 | 3,000,000 | |||||||||
IL Finance Authority | |||||||||||
Chicago Historical Society, Series 2006 LOC: Northern Trust Company 0.020% 01/01/36 (09/03/15) (a)(b) | 32,400,000 | 32,400,000 |
Par ($) | Value ($) | ||||||||||
Elmhurst College: Series 2003, LOC: BMO Harris N.A. 0.030% 03/01/33 (09/03/15) (a)(b) | 9,450,000 | 9,450,000 | |||||||||
Series 2007, LOC: BMO Harris N.A. 0.020% 02/01/42 (09/03/15) (a)(b) | 12,500,000 | 12,500,000 | |||||||||
Lake Forest Academy, Series 2000, LOC: Northern Trust Company 0.030% 12/01/24 (09/02/15) (a)(b) | 6,000,000 | 6,000,000 | |||||||||
Lake Forest Open Lands, Series 1999, LOC: Northern Trust Company 0.050% 08/01/33 (09/02/15) (a)(b) | 9,000,000 | 9,000,000 | |||||||||
Marwen Foundation, Inc., Series 2008 LOC: Northern Trust Company 0.050% 05/01/43 (09/03/15) (a)(b) | 5,080,000 | 5,080,000 | |||||||||
Steppenwolf Theatre Co., Series 2013, LOC: Northern Trust Company 0.020% 03/01/43 (09/03/15) (a)(b) | 5,675,000 | 5,675,000 | |||||||||
IL Housing Development Authority Multi-Family | |||||||||||
Brookhaven Apartments Associates LP, Series 2008, Credit Support: FHLMC, SPA: FHLMC 0.150% 08/01/38 (09/03/15) (a)(b) | 7,145,000 | 7,145,000 | |||||||||
IL JPMorgan Chase Putters/Drivers Trust | |||||||||||
Series 2012 LOC: JPMorgan Chase Bank 0.170% 03/01/19 (09/03/15) (a)(b)(c) | 2,120,000 | 2,120,000 | |||||||||
Illinois Total | 92,795,000 |
See Accompanying Notes to Financial Statements.
6
BofA Tax-Exempt Reserves
August 31, 2015
Municipal Bonds (continued) | |||||||||||
Par ($) | Value ($) | ||||||||||
Indiana – 3.9% | |||||||||||
IN Crawfordsville Industrial Development Authority | |||||||||||
Acuity Brands, National Services Industries, Inc., Series 1991, LOC: Wells Fargo Bank N.A. 0.120% 06/01/21 (09/03/15) (a)(b) | 4,000,000 | 4,000,000 | |||||||||
IN Development Finance Authority | |||||||||||
Goodwill Industries, Series 2005, LOC: PNC Bank N.A. 0.050% 01/01/27 (09/03/15) (a)(b) | 5,425,000 | 5,425,000 | |||||||||
Rehabilitation Center, Inc., Series 2002, LOC: Wells Fargo Bank N.A. 0.170% 07/01/17 (09/03/15) (a)(b) | 400,000 | 400,000 | |||||||||
IN Finance Authority | |||||||||||
ArcelorMittal, Ispat Inland, Inc., Series 2005, LOC: Rabobank Nederland: 0.010% 06/01/35 (09/02/15) (a)(b) | 25,480,000 | 25,480,000 | |||||||||
Depauw University, Series 2008 A, LOC: Northern Trust Company 0.020% 07/01/36 (09/03/15) (a)(b) | 36,510,000 | 36,510,000 | |||||||||
Goodwill Industries, Series 2006, LOC: JPMorgan Chase Bank 0.060% 12/01/36 (09/03/15) (a)(b) | 7,200,000 | 7,200,000 | |||||||||
Lutheran Child & Family Services, Series 2005, LOC: PNC Bank N.A. 0.050% 11/01/27 (09/03/15) (a)(b) | 3,920,000 | 3,920,000 | |||||||||
IN Health Facility Finance Authority | |||||||||||
Anthony Wayne Rehabilitation Center, Series 2001, LOC: Wells Fargo Bank N.A. 0.120% 02/01/31 (09/03/15) (a)(b) | 2,200,000 | 2,200,000 |
Par ($) | Value ($) | ||||||||||
Community Hospital of Lagrange, Series 2007, LOC: PNC Bank N.A. 0.020% 11/01/32 (09/03/15) (a)(b) | 20,380,000 | 20,380,000 | |||||||||
Community Hospitals Project, Series 2000 B, LOC: Wells Fargo Bank N.A. 0.020% 07/01/28 (09/03/15) (a)(b) | 10,900,000 | 10,900,000 | |||||||||
IN Lawrenceburg | |||||||||||
Indiana Michigan Power Co., Series 2008 H, LOC: Bank of Nova Scotia 0.020% 11/01/21 (09/03/15) (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., LIQ FAC: Wells Fargo Bank N.A. 0.070% 06/01/29 (09/03/15) (a)(b) | 6,405,000 | 6,405,000 | |||||||||
IN Rockport | |||||||||||
AEP Generating Co., Series 1995 B, LOC: Bank of Tokyo-Mitsubishi UFJ 0.010% 07/01/25 (09/02/15) (a)(b) | 6,000,000 | 6,000,000 | |||||||||
IN St. Joseph County | |||||||||||
South Bend Medical Foundation, Inc., Series 2000, LOC: PNC Bank N.A. 0.050% 08/01/20 (09/03/15) (a)(b) | 7,570,000 | 7,570,000 | |||||||||
Indiana Total | 144,390,000 | ||||||||||
Iowa – 0.2% | |||||||||||
IA Higher Education Loan Authority | |||||||||||
Des Moines University Osteopath: Series 2003, LOC: BMO Harris N.A. 0.010% 10/01/33 (09/01/15) (a)(b) | 4,635,000 | 4,635,000 |
See Accompanying Notes to Financial Statements.
7
BofA Tax-Exempt Reserves
August 31, 2015
Municipal Bonds (continued) | |||||||||||
Par ($) | Value ($) | ||||||||||
Series 2004, LOC: BMO Harris N.A. 0.010% 10/01/24 (09/01/15) (a)(b) | 4,105,000 | 4,105,000 | |||||||||
Iowa Total | 8,740,000 | ||||||||||
Kansas – 0.6% | |||||||||||
KS Burlington | |||||||||||
Kansas City Power & Light, Series 2007 A LOC: JPMorgan Chase Bank 0.010% 09/01/35 (09/02/15) (a)(b) | 19,050,000 | 19,050,000 | |||||||||
KS Department of Transportation | |||||||||||
Series 2004 C4 SPA: Wells Fargo Bank N.A. 0.020% 09/01/24 (09/02/15) (a)(b) | 4,300,000 | 4,300,000 | |||||||||
Kansas Total | 23,350,000 | ||||||||||
Kentucky – 0.4% | |||||||||||
KY Morehead League of Cities Funding Trust | |||||||||||
Series 2004 A, LOC: U.S. Bank N.A. 0.030% 06/01/34 (09/04/15) (a)(b) | 8,945,500 | 8,945,500 | |||||||||
KY Rural Water Finance Corp. | |||||||||||
Series 2015 D1 1.250% 07/01/16 | 5,900,000 | 5,940,037 | |||||||||
Kentucky Total | 14,885,537 | ||||||||||
Maine – 0.3% | |||||||||||
ME Eclipse Funding Trust | |||||||||||
Maine Health & Higher Educational Facility Authority, Series 2007, LOC: U.S. Bank N.A. 0.030% 07/01/37 (09/03/15) (a)(b)(c) | 9,785,000 | 9,785,000 | |||||||||
Maine Total | 9,785,000 |
Par ($) | Value ($) | ||||||||||
Maryland – 2.3% | |||||||||||
MD Baltimore County Economic Development Authority | |||||||||||
Torah Institute of Baltimore, Series 2004, LOC: Branch Banking & Trust 0.020% 07/01/24 (09/03/15) (a)(b) | 2,180,000 | 2,180,000 | |||||||||
MD Bel Air Economic Development Authority | |||||||||||
Harford Day School, Inc., Series 2007, LOC: Branch Banking & Trust 0.020% 10/01/33 (09/03/15) (a)(b) | 3,730,000 | 3,730,000 | |||||||||
MD Community Development Administration | |||||||||||
Series 2007 J SPA: TD Bank N.A. 0.020% 09/01/31 (09/03/15) (a)(b) | 22,800,000 | 22,800,000 | |||||||||
MD Health & Higher Educational Facilities Authority | |||||||||||
Peninsula Regional Medical Center, Series 1985 B, LOC: TD Bank N.A. 0.010% 04/01/35 (09/02/15) (a)(b) | 15,600,000 | 15,600,000 | |||||||||
University of Maryland Medical Systems, Series 2007 A, LOC: Wells Fargo Bank N.A. 0.010% 07/01/34 (09/03/15) (a)(b) | 11,015,000 | 11,015,000 | |||||||||
MD Montgomery County Housing Opportunities Commission | |||||||||||
Series 2011 A, LOC: TD Bank N.A. 0.020% 01/01/49 (09/03/15) (a)(b) | 7,540,000 | 7,540,000 | |||||||||
MD Prince George's County | |||||||||||
Series 2007-2128, GTY AGMT: Wells Fargo Bank N.A., LIQ FAC: Wells Fargo Bank N.A. 0.020% 07/01/34 (09/03/15) (a)(b)(c) | 13,710,000 | 13,710,000 |
See Accompanying Notes to Financial Statements.
8
BofA Tax-Exempt Reserves
August 31, 2015
Municipal Bonds (continued) | |||||||||||
Par ($) | Value ($) | ||||||||||
MD Tender Option Bond Trust Receipts/Certificates | |||||||||||
Montgomery County, MD Trinity Health Corp. Series 2015 LIQ FAC: JPMorgan Chase Bank 0.030% 12/01/22 (09/03/15) (a)(b)(c) | 7,985,000 | 7,985,000 | |||||||||
Maryland Total | 84,560,000 | ||||||||||
Massachusetts – 1.8% | |||||||||||
MA Clipper Tax-Exempt Certificate Trust | |||||||||||
MA Bay Transportation Authority Series 2007 LIQ FAC: State Street Bank & Trust Co.: 0.050% 11/01/26 (09/03/15) (a)(b) | 2,275,000 | 2,275,000 | |||||||||
0.050% 07/01/27 (09/03/15) (a)(b) | 10,450,000 | 10,450,000 | |||||||||
MA Development Finance Agency | |||||||||||
Partners Healthcare System, Series 2011 K-4 5.000% 07/01/35 (01/14/16) (b)(d) | 1,155,000 | 1,176,874 | |||||||||
MA Health & Educational Facilities Authority | |||||||||||
Baystate Medical Center, Inc., Series 2009 J-2, LOC: JPMorgan Chase Bank 0.010% 07/01/44 (09/01/15) (a)(b) | 1,100,000 | 1,100,000 | |||||||||
Partners Healthcare Systems, Series 1997 P2, SPA: JPMorgan Chase Bank 0.010% 07/01/27 (09/02/15) (a)(b) | 11,500,000 | 11,500,000 | |||||||||
Partners Healthcare, Series 1997 P-1, SPA: JPMorgan Chase Bank 0.010% 07/01/27 (09/02/15) (a)(b) | 19,500,000 | 19,500,000 | |||||||||
MA Natick | |||||||||||
Series 2015 1.250% 04/29/16 | 2,262,500 | 2,276,610 | |||||||||
MA Newburyport | |||||||||||
Series 2015 0.850% 10/23/15 | 1,000,000 | 1,001,036 |
Par ($) | Value ($) | ||||||||||
MA RBC Municipal Products, Inc. Trust | |||||||||||
Series 2012 E-38, LOC: Royal Bank of Canada 0.030% 01/01/16 (09/03/15) (a)(b)(c) | 2,000,000 | 2,000,000 | |||||||||
MA University of Massachusetts Building Authority | |||||||||||
Series 2011 1, SPA: Wells Fargo Bank N.A. 0.020% 11/01/34 (09/02/15) (a)(b) | 4,720,000 | 4,720,000 | |||||||||
MA Worcester | |||||||||||
Series 2014 A 1.000% 12/18/15 | 9,625,000 | 9,648,334 | |||||||||
Massachusetts Total | 65,647,854 | ||||||||||
Michigan – 2.2% | |||||||||||
MI JPMorgan Chase Putters/Drivers Trust | |||||||||||
Series 2015 LIQ FAC: JPMorgan Securities 0.030% 09/01/17 (09/01/15) (a)(b)(c) | 7,225,000 | 7,225,000 | |||||||||
MI RIB Floater Trust | |||||||||||
Series 2015 LOC: Barclays Bank PLC 0.170% 07/01/18 (09/03/15) (a)(b)(c) | 31,000,000 | 31,000,000 | |||||||||
MI Royal Oak School District | |||||||||||
Series 2005 Pre-refunded 01/01/15 Escrowed in U.S. Treasuries 5.000% 05/01/19 | 2,000,000 | 2,015,853 | |||||||||
MI Tender Option Bond Trust Receipts/Certificates | |||||||||||
Series 2015 LIQ FAC: JPMorgan Chase Bank 0.100% 04/15/23 (09/03/15) (a)(b)(c) | 2,835,000 | 2,835,000 | |||||||||
MI Trunk Line Revenue | |||||||||||
Series 2005 B Pre-refunded 09/01/15 Escrowed in U.S. Treasuries 4.000% 09/01/17 | 23,055,000 | 23,055,000 | |||||||||
MI University of Michigan | |||||||||||
Series 2012 A, 0.010% 04/01/36 (09/03/15) (b)(d) | 14,250,000 | 14,250,000 |
See Accompanying Notes to Financial Statements.
9
BofA Tax-Exempt Reserves
August 31, 2015
Municipal Bonds (continued) | |||||||||||
Par ($) | Value ($) | ||||||||||
Series 2012 D-1 0.010% 12/01/24 (09/01/15) (b)(d) | 3,550,000 | 3,550,000 | |||||||||
Michigan Total | 83,930,853 | ||||||||||
Minnesota – 0.4% | |||||||||||
MN Higher Education Facilities Authority | |||||||||||
St. Catheriane University, Series 2002 N2, LOC: U.S. Bank N.A. 0.020% 10/01/32 (09/03/15) (a)(b) | 10,800,000 | 10,800,000 | |||||||||
MN Rosemount-Apple Valley-Eagan Independent School District No.196 | |||||||||||
Series 2012, DPCE: Minnesota School District Credit Enhancement Program 3.000% 02/01/16 | 1,770,000 | 1,789,940 | |||||||||
MN State Colleges & Universities | |||||||||||
Series 2005 A Pre-refunded 00/01/15 Escrowed in U.S. Treasuries 5.000% 10/01/29 | 1,000,000 | 1,003,880 | |||||||||
Minnesota Total | 13,593,820 | ||||||||||
Mississippi – 0.2% | |||||||||||
MS Business Finance Corp. | |||||||||||
Chevron U.S.A., Inc.: Series 2010 B, GTY AGMT: Chevron Corp. 0.010% 12/01/30 (09/02/15) (a)(b) | 1,000,000 | 1,000,000 | |||||||||
Series 2010 F, GTY AGMT: Chevron Corp. 0.010% 12/01/30 (09/02/15) (a)(b) | 2,725,000 | 2,725,000 | |||||||||
Series 2011 B, GTY AGMT: Chevron Corp. 0.010% 11/01/35 (09/01/15) (a)(b) | 4,270,000 | 4,270,000 | |||||||||
Mississippi Total | 7,995,000 |
Par ($) | Value ($) | ||||||||||
Missouri – 2.3% | |||||||||||
MO Development Finance Board | |||||||||||
The Nelson Gallery Foundation, Series 2004 A, SPA: Northern Trust Co. 0.010% 12/01/33 (09/01/15) (a)(b) | 12,420,000 | 12,420,000 | |||||||||
MO Eclipse Funding Trust | |||||||||||
Series 2006 LOC: U.S. Bank N.A. LIQ FAC: U.S. Bank N.A. 0.030% 04/28/16 (09/03/15) (a)(b)(c) | 11,900,000 | 11,900,000 | |||||||||
MO Health & Educational Facilities Authority | |||||||||||
0.060% 10/07/15 | 16,000,000 | 16,000,000 | |||||||||
0.100% 09/09/15 | 8,200,000 | 8,200,000 | |||||||||
Ascension Health, Series 2008 C-5, 0.010% 11/15/26 (09/02/15) (b)(d) | 10,500,000 | 10,500,000 | |||||||||
BJC Healthcare Obligated Group, Series 2008 D 0.010% 05/15/38 (09/03/15) (b)(d) | 3,700,000 | 3,700,000 | |||||||||
SSM Health Care Corp., Series 2014 G 0.010% 06/01/44 (09/02/15) (b)(d) | 3,400,000 | 3,400,000 | |||||||||
MO Kansas City | |||||||||||
H. Roe Battle Convention Center, Series 2008 E, LOC: Sumitomo Mitsui Banking 0.020% 04/15/34 (09/02/15) (a)(b) | 16,225,000 | 16,225,000 | |||||||||
MO Nodaway Industrial Development Authority | |||||||||||
Northwest Foundation, Inc., Series 2002, LOC: U.S. Bank N.A. 0.030% 11/01/32 (09/03/15) (a)(b) | 2,475,000 | 2,475,000 | |||||||||
Missouri Total | 84,820,000 |
See Accompanying Notes to Financial Statements.
10
BofA Tax-Exempt Reserves
August 31, 2015
Municipal Bonds (continued) | |||||||||||
Par ($) | Value ($) | ||||||||||
Nebraska – 1.4% | |||||||||||
NE Madison County Hospital Authority No. 1 | |||||||||||
Faith Regional Health Services, Series 2008 B, LOC: U.S. Bank N.A. 0.020% 07/01/33 (09/03/15) (a)(b) | 13,925,000 | 13,925,000 | |||||||||
NE Omaha Public Power District | |||||||||||
Series A: 0.100% 09/03/15 | 8,300,000 | 8,300,000 | |||||||||
0.100% 10/02/15 | 13,130,000 | 13,130,000 | |||||||||
0.120% 10/01/15 | 11,800,000 | 11,800,000 | |||||||||
0.130% 10/08/15 | 3,500,000 | 3,500,000 | |||||||||
Nebraska Total | 50,655,000 | ||||||||||
Nevada – 1.5% | |||||||||||
NV Reno | |||||||||||
ReTrac-Reno Transportation Rail Access Corridor, Series 2008, LOC: Bank of NY Mellon 0.020% 06/01/42 (09/01/15) (a)(b) | 55,850,000 | 55,850,000 | |||||||||
Nevada Total | 55,850,000 | ||||||||||
New Jersey – 7.7% | |||||||||||
NJ Borough of Beachwood | |||||||||||
Series 2015 1.000% 03/09/16 | 6,470,000 | 6,489,380 | |||||||||
NJ County of Essex | |||||||||||
Series 2014 0.750% 09/22/15 | 45,245,000 | 45,260,322 | |||||||||
NJ RBC Municipal Products, Inc. Trust | |||||||||||
Series 2015 E-61 LOC: Royal Bank of Canada LIQ FAC: Royal Bank of Canada 0.110% 06/28/16 (09/03/15) (a)(b)(c) | 130,000,000 | 130,000,000 | |||||||||
NJ RIB Floater Trust | |||||||||||
NJ Healthcare Financing Authority Series 2013, LOC: Barclays Bank PLC 0.150% 07/03/17 (09/03/15) (a)(b)(c) | 89,050,000 | 89,050,000 | |||||||||
NJ Township of East Brunswick | |||||||||||
Series 2015 1.500% 01/14/16 | 5,140,000 | 5,162,338 |
Par ($) | Value ($) | ||||||||||
NJ Township of Readington | |||||||||||
Series 2015 1.000% 02/04/16 | 13,738,940 | 13,777,104 | |||||||||
New Jersey Total | 289,739,144 | ||||||||||
New York – 12.0% | |||||||||||
NY Ballston Spa Central School District | |||||||||||
Series 2014 Insured: State Aid Withholding 1.000% 09/25/15 | 16,411,000 | 16,419,287 | |||||||||
NY BB&T Municipal Trust | |||||||||||
Series 2010-1039, LOC: Branch Banking & Trust 0.120% 06/01/25 (09/03/15) (a)(b)(c) | 28,980,000 | 28,980,000 | |||||||||
NY Bedford Central School District | |||||||||||
Series 2015 Insured: State Aid Withholding 1.000% 07/15/16 | 14,200,000 | 14,249,610 | |||||||||
NY Brewster Central School District | |||||||||||
Series 2015 Insured: State Aid Withholding 1.000% 07/15/16 | 10,174,614 | 10,224,698 | |||||||||
NY City Water & Sewer System | |||||||||||
Series 2005 A SPA: State Street Bank & Trust Co., 0.010% 06/15/32 (09/01/15) (a)(b) | 15,805,000 | 15,805,000 | |||||||||
Series 2011 SPA: Landesbank Hessen-Thüringen 0.020% 06/15/44 (09/01/15) (a)(b) | 10,000,000 | 10,000,000 | |||||||||
NY County of Saratoga | |||||||||||
Saratoga Hospital Obligated Group, Series 2014 LOC: HSBC Bank USA N.A. 0.020% 12/01/40 (09/03/15) (a)(b) | 3,125,000 | 3,125,000 | |||||||||
NY Dormitory Authority | |||||||||||
City University of NY, Series 2008 LOC: TD Bank N.A. 0.010% 07/01/31 (09/03/15) (a)(b) | 4,500,000 | 4,500,000 |
See Accompanying Notes to Financial Statements.
11
BofA Tax-Exempt Reserves
August 31, 2015
Municipal Bonds (continued) | |||||||||||
Par ($) | Value ($) | ||||||||||
Northern Westchester Hospital, Series 2009, LOC: TD Bank N.A. 0.010% 11/01/34 (09/03/15) (a)(b) | 4,700,000 | 4,700,000 | |||||||||
NY Franklin County Civic Development Corp. | |||||||||||
Alice Hyde Medical Center, Series 2013 A, LOC: HSBC Bank USA N.A. 0.020% 10/01/38 (09/03/15) (a)(b) | 4,265,000 | 4,265,000 | |||||||||
NY Grand Island | |||||||||||
Series 2014 1.000% 10/14/15 | 6,320,000 | 6,325,718 | |||||||||
NY Greece Central School District | |||||||||||
Series 2015 Insured: State Aid Withholding 1.250% 06/24/16 | 5,950,000 | 5,989,410 | |||||||||
NY Housing Development Corp. | |||||||||||
Series 2013 B-4 LIQ FAC: Wells Fargo Bank N.A. 0.020% 05/01/18 (09/03/15) (a)(b) | 5,300,000 | 5,300,000 | |||||||||
NY Housing Finance Agency | |||||||||||
Durst Pyramid LLC, Series 2015 A-1 LOC: Bank of NY Mellon 0.010% 05/01/49 (09/02/15) (a)(b) | 1,400,000 | 1,400,000 | |||||||||
Midtown West B LLC, 505 West 37th St.: Series 2009 A, LOC: Landesbank Hessen-Thüringen 0.020% 05/01/42 (09/01/15) (a)(b) | 28,900,000 | 28,900,000 | |||||||||
Series 2009 B, LOC: Landesbank Hessen-Thüringen 0.020% 05/01/42 (09/01/15) (a)(b) | 36,600,000 | 36,600,000 | |||||||||
West 60th Realty LLC, Series 2013 A1, LOC: M&T Bank 0.070% 05/01/46 (09/02/15) (a)(b) | 1,400,000 | 1,400,000 | |||||||||
NY Liverpool Central School District | |||||||||||
Series 2014 B, Insured: State Aid Withholding 1.000% 10/02/15 | 7,720,000 | 7,724,970 |
Par ($) | Value ($) | ||||||||||
Series 2015 Insured: State Aid Withholding 1.250% 07/07/16 | 6,000,000 | 6,041,977 | |||||||||
NY Longwood Central School District Suffolk County | |||||||||||
Series 2015 Insured: State Aid Withholding 2.000% 06/17/16 | 12,475,000 | 12,636,461 | |||||||||
NY New York City Municipal Water Finance Authority | |||||||||||
Second Generation Resolution, Series 2005 B, SPA: California State Teachers Retirement 0.010% 06/15/32 (09/01/15) (a)(b) | 2,500,000 | 2,500,000 | |||||||||
Series 2008 BB-1, SPA: Landesbank Hessen-Thüringen 0.010% 06/15/39 (09/01/15) (a)(b) | 11,000,000 | 11,000,000 | |||||||||
Series 2008 BB-2, SPA: Landesbank Hessen-Thüringen 0.010% 06/15/39 (09/01/15) (a)(b) | 20,020,000 | 20,020,000 | |||||||||
Series 2011 A-1, SPA: Mizuho Corporate Bank 0.010% 06/15/44 (09/01/15) (a)(b) | 34,195,000 | 34,195,000 | |||||||||
NY New York City Transitional Finance Authority Future Tax Secured Revenue | |||||||||||
NYC Recovery, Series 2002 1D, SPA: Landesbank Hessen-Thüringen 0.010% 11/01/22 (09/01/15) (a)(b) | 7,805,000 | 7,805,000 | |||||||||
NY New York City | |||||||||||
Series 2013 D-3 SPA: JPMorgan Chase Bank 0.010% 08/01/38 (09/01/15) (a)(b) | 34,310,000 | 34,310,000 | |||||||||
Series 2015 F-6 SPA: JPMorgan Chase Bank 0.010% 06/01/44 (09/01/15) (a)(b) | 7,750,000 | 7,750,000 | |||||||||
Series 2004 H-4, LOC: Bank of NY Mellon 0.010% 03/01/34 (09/01/15) (a)(b) | 11,900,000 | 11,900,000 |
See Accompanying Notes to Financial Statements.
12
BofA Tax-Exempt Reserves
August 31, 2015
Municipal Bonds (continued) | |||||||||||
Par ($) | Value ($) | ||||||||||
Series 2006 I-4, LOC: California Public Employees Retirement 0.010% 04/01/36 (09/01/15) (a)(b) | 10,600,000 | 10,600,000 | |||||||||
Series 2011 A-3, LIQ FAC: Landesbank Hessen-Thüringen 0.010% 08/01/35 (09/01/15) (a)(b) | 3,130,000 | 3,130,000 | |||||||||
Series 2011 D-3 LOC: California Public Employees Retirement 0.010% 10/01/39 (09/01/15) (a)(b) | 2,900,000 | 2,900,000 | |||||||||
Series 2012 A-3, LOC: Mizuho Corporate Bank 0.010% 10/01/40 (09/01/15) (a)(b) | 2,700,000 | 2,700,000 | |||||||||
NY Putnam County Industrial Development Agency | |||||||||||
United Cerebral Palsy of Putnam, Series 2005 B, LOC: TD Bank N.A. 0.020% 12/01/30 (09/03/15) (a)(b) | 2,135,000 | 2,135,000 | |||||||||
NY Town of Amherst | |||||||||||
Series 2014 0.750% 11/12/15 | 29,387,882 | 29,417,331 | |||||||||
NY Town of Cheektowaga | |||||||||||
Series 2015 1.000% 07/14/16 | 8,200,000 | 8,238,172 | |||||||||
NY Town of North Hempstead | |||||||||||
Series 2014 D 0.500% 10/02/15 | 7,500,000 | 7,501,586 | |||||||||
NY Triborough Bridge & Tunnel Authority | |||||||||||
Series 2005 B-3 LOC: Bank of Tokyo-Mitsubishi UFJ 0.010% 01/01/32 (09/02/15) (a)(b) | 1,000,000 | 1,000,000 | |||||||||
NY Village of Kings Point | |||||||||||
Series 2015 2.000% 07/29/16 | 5,880,000 | 5,955,252 | |||||||||
NY White Plains City School District | |||||||||||
Series 2015 Insured: State Aid Withholding 0.490% 06/25/16 | 20,179,637 | 20,179,637 | |||||||||
New York Total | 447,824,109 |
Par ($) | Value ($) | ||||||||||
North Carolina – 3.6% | |||||||||||
NC BB&T Municipal Trust | |||||||||||
Series 2008-1023, LOC: Branch Banking & Trust LIQ FAC: Branch Banking & Trust 0.120% 05/01/24 (09/03/15) (a)(b)(c) | 3,130,000 | 3,130,000 | |||||||||
NC Capital Facilities Finance Agency | |||||||||||
Barton College, Series 2004, LOC: Branch Banking & Trust 0.020% 07/01/19 (09/03/15) (a)(b) | 2,900,000 | 2,900,000 | |||||||||
Duke University Series A: 0.100% 09/03/15 | 7,500,000 | 7,500,000 | |||||||||
0.120% 09/24/15 | 14,124,000 | 14,124,000 | |||||||||
High Point University: Series 2007, LOC: Branch Banking & Trust 0.020% 12/01/29 (09/03/15) (a)(b) | 5,000,000 | 5,000,000 | |||||||||
Series 2008, LOC: Branch Banking & Trust 0.020% 05/01/30 (09/03/15) (a)(b) | 3,360,000 | 3,360,000 | |||||||||
Meredith College, Series 2008 B, LOC: Wells Fargo Bank N.A. 0.020% 06/01/38 (09/03/15) (a)(b) | 2,970,000 | 2,970,000 | |||||||||
NC Charlotte-Mecklenburg Hospital Authority | |||||||||||
Series 2007 E, LOC: TD Bank N.A. 0.010% 01/15/44 (09/03/15) (a)(b) | 7,600,000 | 7,600,000 | |||||||||
Series 2007, LOC: Wells Fargo Bank N.A. 0.010% 01/15/45 (09/01/15) (a)(b) | 7,485,000 | 7,485,000 | |||||||||
NC Forsyth County | |||||||||||
Series 2004 A, SPA: Wells Fargo Bank N.A. 0.020% 03/01/25 (09/03/15) (a)(b) | 8,935,000 | 8,935,000 | |||||||||
Series 2004 B, SPA: Wells Fargo Bank N.A. 0.020% 03/01/25 (09/03/15) (a)(b) | 10,000,000 | 10,000,000 |
See Accompanying Notes to Financial Statements.
13
BofA Tax-Exempt Reserves
August 31, 2015
Municipal Bonds (continued) | |||||||||||
Par ($) | Value ($) | ||||||||||
NC Mecklenburg County | |||||||||||
Series 2013 A 0.438% 02/01/28 (09/03/15) (b)(d) | 12,000,000 | 12,000,440 | |||||||||
NC Medical Care Commission | |||||||||||
Caromont Health Obligated Group, Series 2003 B LOC: Wells Fargo Bank N.A. 0.020% 08/15/34 (09/02/15) (a)(b) | 15,860,000 | 15,860,000 | |||||||||
Deerfield Episcopal Retirement, Series 2008 B, LOC: Branch Banking & Trust 0.020% 11/01/38 (09/03/15) (a)(b) | 5,000,000 | 5,000,000 | |||||||||
J. Arthur Dosher Memorial Hospital, Series 1998 J, LOC: Branch Banking & Trust 0.040% 05/01/18 (09/03/15) (a)(b) | 1,135,000 | 1,135,000 | |||||||||
Southeastern Regional Medical Center, Series 2005, LOC: Branch Banking & Trust 0.020% 06/01/37 (09/03/15) (a)(b) | 9,110,000 | 9,110,000 | |||||||||
NC Wake County Industrial Facilities & Pollution Control Financing Authority | |||||||||||
Habitat for Humanity of Wake County, Series 2007, LOC: Branch Banking & Trust 0.020% 11/01/32 (09/03/15) (a)(b) | 3,700,000 | 3,700,000 | |||||||||
NC Wake County | |||||||||||
Series 2003 C, SPA: Wells Fargo Bank N.A. 0.020% 04/01/19 (09/03/15) (a)(b) | 14,700,000 | 14,700,000 | |||||||||
North Carolina Total | 134,509,440 | ||||||||||
North Dakota – 0.7% | |||||||||||
ND Housing Finance Agency | |||||||||||
Meadowlark Heights Apts Series 2015 0.400% 09/01/16 | 7,000,000 | 7,000,000 |
Par ($) | Value ($) | ||||||||||
ND RBC Municipal Products, Inc. Trust | |||||||||||
Series 2015 LOC: Royal Bank of Canada 0.110% 01/04/21 (09/03/15) (a)(b)(c) | 17,695,000 | 17,695,000 | |||||||||
North Dakota Total | 24,695,000 | ||||||||||
Ohio – 3.6% | |||||||||||
OH Air Quality Development Authority | |||||||||||
Aep Generation Resources, Series 2014 A LOC: Mizuho Bank Ltd. 0.020% 12/01/38 (09/03/15) (a)(b) | 24,900,000 | 24,900,000 | |||||||||
OH County of Franklin | |||||||||||
Ohio Health Obligation Group, Series 2011 C 0.060% 11/15/33 (09/03/15) (b)(d) | 7,350,000 | 7,350,000 | |||||||||
OH Cuyahoga County | |||||||||||
A.M. Mcgregor Home, Series 2014 LOC: Northern Trust Company 0.040% 05/01/49 (09/03/15) (a)(b) | 19,745,000 | 19,745,000 | |||||||||
OH Geauga County | |||||||||||
Sisters of Notre Dame, Series 2001, LOC: PNC Bank N.A. 0.050% 08/01/16 (09/03/15) (a)(b) | 800,000 | 800,000 | |||||||||
OH Hamilton County | |||||||||||
Elizabeth Gamble Deacones, Series 2002 A LOC: Northern Trust Company 0.030% 06/01/27 (09/03/15) (a)(b) | 12,700,000 | 12,700,000 | |||||||||
OH Middletown City | |||||||||||
Atrium Medical Center Obligated Group, Series 2008 B LOC: PNC Bank N.A. 0.020% 11/15/39 (09/02/15) (a)(b) | 19,450,000 | 19,450,000 |
See Accompanying Notes to Financial Statements.
14
BofA Tax-Exempt Reserves
August 31, 2015
Municipal Bonds (continued) | |||||||||||
Par ($) | Value ($) | ||||||||||
OH Salem Civic Facility | |||||||||||
Salem Community Center, Inc., Series 2001, LOC: PNC Bank N.A. 0.050% 06/01/27 (09/03/15) (a)(b) | 6,135,000 | 6,135,000 | |||||||||
OH Stark County Port Authority | |||||||||||
Community Action Agency, Series 2001, LOC: JPMorgan Chase Bank 0.080% 12/01/22 (09/03/15) (a)(b) | 2,500,000 | 2,500,000 | |||||||||
OH State University | |||||||||||
0.110% 10/06/15 | 16,400,000 | 16,400,000 | |||||||||
Series 2014 B-1 0.010% 12/01/39 (09/02/15) (b)(d) | 13,000,000 | 13,000,000 | |||||||||
OH State | |||||||||||
Series 2014 1.000% 12/15/15 | 8,650,000 | 8,667,612 | |||||||||
OH Tender Option Bond Trust Receipts/Certificates | |||||||||||
Series 2015 LIQ FAC: Toronto-Dominion Bank 0.030% 05/15/23 (09/03/15) (a)(b)(c) | 2,000,000 | 2,000,000 | |||||||||
Ohio Total | 133,647,612 | ||||||||||
Oregon – 0.5% | |||||||||||
OR State | |||||||||||
Series 2008 SPA: Bank of Tokyo-Mitsubishi UFJ 0.010% 12/01/45 (09/02/15) (a)(b) | 17,665,000 | 17,665,000 | |||||||||
Oregon Total | 17,665,000 | ||||||||||
Pennsylvania – 6.8% | |||||||||||
PA Allegheny County Hospital Development Authority | |||||||||||
Jefferson Regional Medical Center, Series 2006 A, LOC: PNC Bank N.A. 0.020% 05/01/26 (09/03/15) (a)(b) | 22,000,000 | 22,000,000 |
Par ($) | Value ($) | ||||||||||
PA Allegheny County | |||||||||||
Series 2000 LOC: PNC Bank N.A. 0.020% 05/01/27 (09/03/15) (a)(b) | 25,000,000 | 25,000,000 | |||||||||
PA Bucks County Industrial Development Authority | |||||||||||
Grand View Hospital, Series 2008 A, LOC: TD Bank N.A. 0.010% 07/01/34 (09/03/15) (a)(b) | 6,270,000 | 6,270,000 | |||||||||
PA Cumberland County Municipal Authority | |||||||||||
Diakon Lutheran Social, Series 2014 LOC: M&T Bank 0.020% 01/01/39 (09/03/15) (a)(b) | 4,920,000 | 4,920,000 | |||||||||
PA Emmaus General Authority | |||||||||||
Series 1989 B-28, LOC: U.S. Bank N.A. 0.010% 03/01/24 (09/02/15) (a)(b) | 2,000,000 | 2,000,000 | |||||||||
Series 1989 B-29, LOC: U.S. Bank N.A. 0.010% 03/01/24 (09/02/15) (a)(b) | 7,300,000 | 7,300,000 | |||||||||
Series 1989 E-22, LOC: U.S. Bank N.A. 0.010% 03/01/24 (09/02/15) (a)(b) | 7,800,000 | 7,800,000 | |||||||||
Series 1989 F-27, LOC: U.S. Bank N.A. 0.010% 03/01/24 (09/02/15) (a)(b) | 2,300,000 | 2,300,000 | |||||||||
Series 2003 E-20, LOC: U.S. Bank N.A. 0.010% 03/01/24 (09/02/15) (a)(b) | 5,100,000 | 5,100,000 | |||||||||
PA Haverford Township School District | |||||||||||
Series 2009, LOC: TD Bank N.A. 0.020% 03/01/30 (09/03/15) (a)(b) | 4,060,000 | 4,060,000 |
See Accompanying Notes to Financial Statements.
15
BofA Tax-Exempt Reserves
August 31, 2015
Municipal Bonds (continued) | |||||||||||
Par ($) | Value ($) | ||||||||||
PA Higher Educational Facilities Authority | |||||||||||
Drexel University, Series 2000 LOC: JPMorgan Chase Bank 0.010% 11/01/25 (09/03/15) (a)(b) | 15,135,000 | 15,135,000 | |||||||||
Mount Aloysius College, Series 2003 L3, LOC: PNC Bank N.A. 0.030% 05/01/28 (09/03/15) (a)(b) | 4,600,000 | 4,600,000 | |||||||||
PA Philadelphia Authority for Industrial Development | |||||||||||
NewCourtland Elder Services, Series 2007, LOC: PNC Bank N.A. 0.020% 03/01/26 (09/03/15) (a)(b) | 7,090,000 | 7,090,000 | |||||||||
Series 2007 B2 LOC: TD Bank N.A. 0.010% 10/01/30 (09/03/15) (a)(b) | 30,645,000 | 30,645,000 | |||||||||
PA Philadelphia School District | |||||||||||
Series 2009 C, LOC:TD Bank N.A. 0.010% 06/01/26 (09/03/15) (a)(b) | 30,000,000 | 30,000,000 | |||||||||
PA Public School Building Authority | |||||||||||
Park School Project: Series 2009 A, LOC: PNC Bank N.A. 0.020% 08/01/30 (09/03/15) (a)(b) | 9,725,000 | 9,725,000 | |||||||||
Series 2009 B, LOC: PNC Bank N.A. 0.020% 05/15/20 (09/03/15) (a)(b) | 8,510,000 | 8,510,000 | |||||||||
PA RBC Municipal Products, Inc. Trust | |||||||||||
Series 2015 E-53 LOC: Royal Bank of Canada LIQ FAC: Royal Bank of Canada 0.110% 12/01/18 (09/03/15) (a)(b)(c) | 60,300,000 | 60,300,000 | |||||||||
PA Ridley School District | |||||||||||
Series 2009, LOC: TD Bank N.A. 0.020% 11/01/29 (09/03/15) (a)(b) | 3,225,000 | 3,225,000 | |||||||||
Pennsylvania Total | 255,980,000 |
Par ($) | Value ($) | ||||||||||
Rhode Island – 0.4% | |||||||||||
RI Health & Educational Building Corp. | |||||||||||
Brown University, Higher Education Facilities Series 2003 B LIQ FAC: Northern Trust Company 0.010% 09/01/43 (09/03/15) (a)(b) | 14,105,000 | 14,105,000 | |||||||||
Rhode Island Total | 14,105,000 | ||||||||||
South Carolina – 0.4% | |||||||||||
SC Charleston Educational Excellence Finance Corp. | |||||||||||
Series 2005 Pre-refunded 02/01/15 Escrowed in U.S. Treasuries 5.250% 12/01/29 | 2,000,000 | 2,024,948 | |||||||||
SC Spartanburg County School District No.2 | |||||||||||
South Carolina School District Credit Enhancement Program Series 2015 2.000% 04/01/16 | 10,000,000 | 10,097,779 | |||||||||
SC Spartanburg County School District No.5 | |||||||||||
South Carolina School District Credit Enhancement Program Series 2015 2.000% 03/01/16 | 3,260,000 | 3,287,473 | |||||||||
South Carolina Total | 15,410,200 | ||||||||||
South Dakota – 0.5% | |||||||||||
SD Health & Educational Facilities Authority | |||||||||||
Series 2001 C, LOC: U.S. Bank N.A. 0.020% 11/01/19 (09/04/15) (a)(b) | 7,885,000 | 7,885,000 | |||||||||
SD Sioux Falls | |||||||||||
Series 2007-1886, GTY AGMT: Wells Fargo Bank N.A., LIQ FAC: Wells Fargo Bank N.A. 0.040% 11/15/33 (09/03/15) (a)(b) | 12,350,000 | 12,350,000 | |||||||||
South Dakota Total | 20,235,000 |
See Accompanying Notes to Financial Statements.
16
BofA Tax-Exempt Reserves
August 31, 2015
Municipal Bonds (continued) | |||||||||||
Par ($) | Value ($) | ||||||||||
Tennessee – 0.5% | |||||||||||
TN Blount County Public Building Authority | |||||||||||
Series 2009 E-7-A, LOC: Branch Banking & Trust 0.020% 06/01/39 (09/02/15) (a)(b) | 5,000,000 | 5,000,000 | |||||||||
Series 2009 E-8-A, LOC: Branch Banking & Trust 0.020% 06/01/37 (09/02/15) (a)(b) | 365,000 | 365,000 | |||||||||
TN Hawkins County Industrial Development Board | |||||||||||
Leggett & Platt, Inc., Series 1988 B, LOC: Wells Fargo Bank N.A. 0.220% 10/01/27 (09/02/15) (a)(b) | 1,750,000 | 1,750,000 | |||||||||
TN Tender Option Bond Trust Receipts/Certificates | |||||||||||
Series 2013 LIQ FAC: State Street Bank & Trust Co., 0.020% 07/01/27 (09/03/15) (a)(b)(c) | 7,500,000 | 7,500,000 | |||||||||
Series 2014 LIQ FAC: JPMorgan Chase Bank 0.030% 05/11/20 (09/03/15) (a)(b)(c) | 2,500,000 | 2,500,000 | |||||||||
Tennessee Total | 17,115,000 | ||||||||||
Texas – 9.1% | |||||||||||
TX Bexar County Housing Finance Corp. | |||||||||||
Multi-Family Housing, Perrin Park Apartments, Series 1996, LOC: Northern Trust Company 0.040% 06/01/28 (09/03/15) (a)(b) | 10,375,000 | 10,375,000 | |||||||||
TX City of Houston | |||||||||||
Series 2005 A 5.000% 03/01/16 | 1,010,000 | 1,010,000 | |||||||||
TX Dallas Performing Arts Cultural Facilities Corp. | |||||||||||
Dallas Center of Performing Arts Cultural Facilities Corp., Series 2008 LOC: JPMorgan Chase Bank 0.010% 09/01/41 (09/03/15) (a)(b) | 18,320,000 | 18,320,000 |
Par ($) | Value ($) | ||||||||||
TX Gregg County Housing Finance Corp. | |||||||||||
Bailey Properties LLC, Series 2004 A, Guarantor: FNMA, LIQ FAC: FNMA: 0.020% 02/15/23 (09/03/15) (a)(b) | 4,235,000 | 4,235,000 | |||||||||
Summer Green LLC, Series 2004 A, Guarantor: FNMA, LIQ FAC: FNMA: 0.020% 02/15/23 (09/03/15) (a)(b) | 2,180,000 | 2,180,000 | |||||||||
TX Gulf Coast Industrial Development Authority | |||||||||||
Exxon Mobil Corp., Series 2012, 0.010% 11/01/41 (09/01/15) (b)(d) | 14,205,000 | 14,205,000 | |||||||||
TX Lower Neches Valley Authority Industrial Development Corp. | |||||||||||
Exxon Capital Ventures, Inc., ExxonMobil Project, Series 2012, GTY AGMT: Exxon Mobile Corp., 0.010% 05/01/46 (09/01/15) (a)(b) | 37,110,000 | 37,110,000 | |||||||||
TX Mesquite Independent School District | |||||||||||
Series 2000, LIQ FAC: JPMorgan Chase Bank 0.100% 08/15/25 (11/19/15) (a)(b) | 9,865,000 | 9,865,000 | |||||||||
TX Midlothian Industrial Development Corp. | |||||||||||
Holcim US, Inc., Series 2009 LOC: UBS AG 0.010% 08/01/34 (09/02/15) (a)(b) | 6,700,000 | 6,700,000 | |||||||||
TX North Tollway Authority | |||||||||||
Series 2009 D LOC: Royal Bank of Canada 0.020% 01/01/49 (09/02/15) (a)(b) | 33,000,000 | 33,000,000 | |||||||||
TX Plano Independent School District | |||||||||||
Texas Permanent School Fund: Series 2006 4.250% 02/15/16 | 1,185,000 | 1,206,189 | |||||||||
Series 2015 2.000% 02/15/16 | 2,525,000 | 2,545,060 |
See Accompanying Notes to Financial Statements.
17
BofA Tax-Exempt Reserves
August 31, 2015
Municipal Bonds (continued) | |||||||||||
Par ($) | Value ($) | ||||||||||
TX RIB Floater Trust | |||||||||||
Series 2015 LOC: Barclays Bank PLC 0.170% 07/01/18 (09/03/15) (a)(b)(c) | 9,500,000 | 9,500,000 | |||||||||
TX Round Rock Independent School District | |||||||||||
Series 2007, Guarantor: Texas Permanent School Fund LIQ FAC: Wells Fargo Bank N.A. 0.040% 08/01/32 (09/03/15) (a)(b) | 10,795,000 | 10,795,000 | |||||||||
TX State | |||||||||||
Series 2011 B SPA: Landesbank Hessen-Thüringen 0.020% 12/01/41 (09/02/15) (a)(b) | 6,865,000 | 6,865,000 | |||||||||
Series 2011 C SPA: Landesbank Hessen-Thüringen 0.030% 06/01/42 (09/02/15) (a)(b) | 32,115,000 | 32,115,000 | |||||||||
Series 2013 B SPA: Bank of New York Mellon 0.010% 12/01/43 (09/02/15) (a)(b) | 17,160,000 | 17,160,000 | |||||||||
Series 2015 A SPA: Landesbank Hessen-Thüringen 0.030% 06/01/45 (09/02/15) (a)(b) | 40,000,000 | 40,000,000 | |||||||||
TX University of Texas | |||||||||||
Financing System, Series 2008 B, LIQ FAC: University of Texas Investment Management Co. 0.010% 08/01/25 (09/03/15) (a)(b) | 30,000,000 | 30,000,000 | |||||||||
Series 2008 A 0.010% 07/01/38 (09/03/15) (b)(d) | 42,390,000 | 42,390,000 | |||||||||
Series 2008 B LIQ FAC: University of Texas Investment Management Co. 0.010% 08/01/39 (09/03/15) (a)(b) | 10,900,000 | 10,900,000 | |||||||||
Texas Total | 340,476,249 |
Par ($) | Value ($) | ||||||||||
Utah – 1.2% | |||||||||||
UT County of Utah | |||||||||||
IHC Health Services, Inc., Series 2002 B SPA: U.S. Bank N.A. 0.010% 05/15/35 (09/03/15) (a)(b) | 15,400,000 | 15,400,000 | |||||||||
UT Davis County School District | |||||||||||
Utah School Bond Guaranty Program Series 2015 A 2.000% 06/01/16 | 3,445,000 | 3,486,563 | |||||||||
UT Eclipse Funding Trust | |||||||||||
Series 2006 LOC: U.S. Bank N.A. 0.030% 04/28/16 (09/03/15) (a)(b)(c) | 23,450,000 | 23,450,000 | |||||||||
UT Housing Corp. | |||||||||||
Multi-Family Housing, Miller Timbergate Apartments LLC, Series 2009 A, LIQ FAC: FHLMC, GTY AGMT: FNMA 0.070% 04/01/42 (09/03/15) (a)(b) | 3,125,000 | 3,125,000 | |||||||||
UT Nebo School District | |||||||||||
Utah School Bond Guaranty Program Series 2015 5.000% 07/01/16 (e) | 1,025,000 | 1,064,749 | |||||||||
Utah Total | 46,526,312 | ||||||||||
Vermont – 0.1% | |||||||||||
VT Educational & Health Buildings Financing Agency | |||||||||||
Norwich University, Series 2008, LOC: TD Bank N.A. 0.010% 09/01/38 (09/02/15) (a)(b) | 3,000,000 | 3,000,000 | |||||||||
Vermont Total | 3,000,000 |
See Accompanying Notes to Financial Statements.
18
BofA Tax-Exempt Reserves
August 31, 2015
Municipal Bonds (continued) | |||||||||||
Par ($) | Value ($) | ||||||||||
Virginia – 1.0% | |||||||||||
VA Chesapeake Redevelopment & Housing Authority | |||||||||||
Great Bridge Apartments LLC, Series 2008 A, DPCE: FNMA, LIQ FAC: FNMA 0.040% 01/15/41 (09/03/15) (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 0.040% 10/01/25 (09/02/15) (a)(b) | 2,500,000 | 2,500,000 | |||||||||
Series 1988 D, LOC: Northern Trust Company 0.040% 10/01/25 (09/02/15) (a)(b) | 2,800,000 | 2,800,000 | |||||||||
VA Loudoun County Industrial Development Authority | |||||||||||
Jack Kent Cooke Foundation, Series 2004, LOC: Northern Trust Company 0.050% 06/01/34 (09/02/15) (a)(b) | 12,500,000 | 12,500,000 | |||||||||
Virginia Total | 36,425,000 | ||||||||||
Washington – 0.8% | |||||||||||
WA Health Care Facilities Authority | |||||||||||
Multicare Health Systems, Series 2007 D, LOC: Barclays Bank PLC 0.010% 08/15/41 (09/01/15) (a)(b) | 7,280,000 | 7,280,000 | |||||||||
WA Housing Finance Commission | |||||||||||
Artspace Everett LP, Series 2008 B, Credit Support: FHLMC, LIQ FAC: FHLMC: 0.030% 12/01/41 (09/02/15) (a)(b) | 3,200,000 | 3,200,000 | |||||||||
Pioneer Human Services, Series 2009 D, LOC: U.S. Bank N.A. 0.040% 07/01/29 (09/02/15) (a)(b) | 3,855,000 | 3,855,000 |
Par ($) | Value ($) | ||||||||||
Single Family Housing, Series 2009, DPCE: GNMA/FNMA/FHLMC, LIQ FAC: State Street Bank & Trust Co.: 0.020% 06/01/39 (09/03/15) (a)(b) | 6,000,000 | 6,000,000 | |||||||||
The Evergreen School, Series 2002, LOC: Wells Fargo Bank N.A. 0.120% 07/01/28 (09/03/15) (a)(b) | 1,435,000 | 1,435,000 | |||||||||
WA King County School District No 414 Lake Washington | |||||||||||
Washington State School District Credit Enhancement Program Series 2015 2.000% 12/01/15 | 3,075,000 | 3,088,639 | |||||||||
WA Seattle Housing Authority | |||||||||||
Bayview Manor Homes, Series 1994 B, LOC: U.S. Bank N.A. 0.030% 05/01/19 (09/03/15) (a)(b) | 1,300,000 | 1,300,000 | |||||||||
WA Tender Option Bond Trust Receipts/Certificates | |||||||||||
Energy Northwest WA Electric/Columbia Generating System Series 2015 LIQ FAC: JPMorgan Chase Bank 0.030% 01/01/23 (09/03/15) (a)(b)(c) | 2,750,000 | 2,750,000 | |||||||||
Washington Total | 28,908,639 | ||||||||||
West Virginia – 0.5% | |||||||||||
WV Economic Development Authority | |||||||||||
Appalachian Power Co., Series 2009 B, LOC: Sumitomo Mitsui Banking 0.020% 12/01/42 (09/03/15) (a)(b) | 17,900,000 | 17,900,000 | |||||||||
West Virginia Total | 17,900,000 | ||||||||||
Wisconsin – 1.2% | |||||||||||
WI Health & Educational Facilities Authority | |||||||||||
Bay Area Medical Center, Inc., Series 2008, LOC: BMO Harris N.A. 0.010% 02/01/38 (09/01/15) (a)(b) | 1,400,000 | 1,400,000 |
See Accompanying Notes to Financial Statements.
19
BofA Tax-Exempt Reserves
August 31, 2015
Municipal Bonds (continued) | |||||||||||
Par ($) | Value ($) | ||||||||||
WI Public Finance Authority | |||||||||||
Glenridge on Palmer Ranch, Series 2011 B, LOC: Bank of Scotland 0.030% 06/01/41 (09/01/15) (a)(b) | 25,805,000 | 25,805,000 | |||||||||
WI RIB Floater Trust | |||||||||||
Series 2015 LOC: Barclays Bank PLC 0.150% 05/01/18 (09/03/15) (a)(b)(c) | 18,940,000 | 18,940,000 | |||||||||
Wisconsin Total | 46,145,000 | ||||||||||
Wyoming – 1.5% | |||||||||||
WY Lincoln Country Wyoming Pollution Control | |||||||||||
Series 1991, LOC: Bank of Nova Scotia 0.020% 01/01/16 (09/02/15) (a)(b) | 8,985,000 | 8,985,000 | |||||||||
WY Uinta County | |||||||||||
Exxon Mobil Corp., Series 1993, 0.010% 08/15/20 (09/01/15) (b)(d) | 48,740,000 | 48,740,000 | |||||||||
Wyoming Total | 57,725,000 | ||||||||||
Total Municipal Bonds (cost of $3,653,774,598) | 3,653,774,598 | ||||||||||
Closed-End Investment Companies – 1.2% | |||||||||||
California – 0.3% | |||||||||||
CA Nuveen AMT-Free Municipal Income Fund, Inc. | |||||||||||
Series 2010 4, LIQ FAC: Citibank N.A. 0.080% 12/01/40 (09/03/15) (a)(b)(c) | 10,000,000 | 10,000,000 | |||||||||
California Total | 10,000,000 | ||||||||||
New York – 0.8% | |||||||||||
NY Nuveen AMT-Free Municipal Income Fund, Inc. | |||||||||||
Series 2013, LIQ FAC: Citibank N.A.: 0.080% 08/01/40 (09/03/15) (a)(b)(c) | 15,000,000 | 15,000,000 | |||||||||
0.080% 12/01/40 (09/03/15) (a)(b)(c) | 15,000,000 | 15,000,000 | |||||||||
New York Total | 30,000,000 |
Par ($) | Value ($) | ||||||||||
Other – 0.1% | |||||||||||
Nuveen AMT-Free Municipal Income Fund | |||||||||||
Series 2013 2-1309, LIQ FAC: Citibank N.A. 0.100% 12/01/40 (09/03/15) (a)(b)(c) | 3,250,000 | 3,250,000 | |||||||||
Other Total | 3,250,000 | ||||||||||
Total Closed-End Investment Companies (cost of $43,250,000) | 43,250,000 | ||||||||||
Total Investments – 99.0% (cost of $3,697,024,598) (f) | 3,697,024,598 | ||||||||||
Other Assets & Liabilities, Net – 1.0% | 38,762,596 | ||||||||||
Net Assets – 100.0% | 3,735,787,194 |
Notes to Investment Portfolio:
Portfolio holdings are subject to change periodically and may not be representative of current holdings.
(a) Variable rate obligations have long dated final maturities, however, their effective maturity is within 397 days in accordance with a demand feature. These securities are secured by a letter of credit or other credit support agreements from banks. These securities are puttable upon not more than one, seven or thirty business days' notice. Put bonds and notes have a demand feature that matures within one year. The interest rate is changed periodically and the interest rate reflects the rate at August 31, 2015.
(b) Parenthetical date represents the effective maturity date for the security which may represent the demand date for puttable or callable securities or the prerefunded date for certain securities where applicable.
(c) Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At August 31, 2015, these securities, which are not illiquid, amounted to $844,325,000 or 22.6% of net assets for the Fund.
(d) Variable rate obligations have long dated final maturities, however, their effective maturity is within 397 days in accordance with a demand feature. These securities are puttable upon not more than one, seven or thirty business days' notice. Put bonds and notes have a demand feature that matures within one year. The interest rate is changed periodically and the interest rate reflects the rate at August 31, 2015.
(e) Security purchased on a delayed delivery basis and, as such, payment for and delivery of the security has not yet taken place. Generally, no interest will accrue to the Fund until the security is delivered.
(f) Cost for federal income tax purposes is $3,697,024,598.
The following table summarizes the inputs used, as of August 31, 2015, 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 | $ | — | $ | 3,653,774,598 | $ | — | $ | 3,653,774,598 | |||||||||||
Total Closed-End Investment Companies | — | 43,250,000 | — | 43,250,000 | |||||||||||||||
Total Investments | $ | — | $ | 3,697,024,598 | $ | — | $ | 3,697,024,598 |
See Accompanying Notes to Financial Statements.
20
BofA Tax-Exempt Reserves
August 31, 2015
The Fund's assets are assigned to the Level 2 input category which represents short-term obligations which are valued using amortized cost, an income approach which converts future cash flows to a present value based upon the discount or premium at purchase.
For the year ended August 31, 2015, all of the securities held in the Portfolio were Level 2 and there were no transfers to report.
For more information on valuation inputs, please refer to the Security Valuation section in the accompanying Notes to Financial Statements.
At August 31, 2015, the asset allocation of the Fund is as follows:
Asset Allocation | % of Net Assets | ||||||
Municipal Bonds | 97.8 | ||||||
Closed-End Investment Companies | 1.2 | ||||||
99.0 | |||||||
Other Assets & Liabilities, Net | 1.0 | ||||||
100.0 |
Acronym | Name | ||||||
AMT | Alternative Minimum Tax | ||||||
DPCE | Direct Pay Credit Enhancement | ||||||
DRIVERs | Derivative Inverse Tax-Exempt Receipts | ||||||
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 | ||||||
PUTTERs | Puttable Tax Exempt Receipts | ||||||
RIB | Residual Interest Bond | ||||||
SPA | Stand-by Purchase Agreement |
See Accompanying Notes to Financial Statements.
21
Statement of Assets and Liabilities – BofA Tax-Exempt Reserves
August 31, 2015
($) | |||||||||||
Assets | Investments, at amortized cost approximating value | 3,697,024,598 | |||||||||
Cash | 38,930,016 | ||||||||||
Receivable for: | |||||||||||
Fund shares sold | 75 | ||||||||||
Interest | 2,339,646 | ||||||||||
Expense reimbursement due from investment advisor | 11,228 | ||||||||||
Trustees' deferred compensation plan | 8,699 | ||||||||||
Prepaid expenses | 30,427 | ||||||||||
Total Assets | 3,738,344,689 | ||||||||||
Liabilities | Payable for: | ||||||||||
Investments purchased on a delayed delivery basis | 1,064,750 | ||||||||||
Investments purchased | 1,120,223 | ||||||||||
Fund shares repurchased | 6,293 | ||||||||||
Investment advisory fee | 91,975 | ||||||||||
Administration fee | 116,774 | ||||||||||
Pricing and bookkeeping fees | 17,166 | ||||||||||
Transfer agent fee | 3,671 | ||||||||||
Trustees' fees | 4,528 | ||||||||||
Audit fee | 60,627 | ||||||||||
Custody fee | 6,867 | ||||||||||
Chief Compliance Officer expenses | 2,208 | ||||||||||
Trustees' deferred compensation plan | 8,699 | ||||||||||
Other liabilities | 53,714 | ||||||||||
Total Liabilities | 2,557,495 | ||||||||||
Net Assets | 3,735,787,194 | ||||||||||
Net Assets Consist of | Paid-in capital | 3,735,674,968 | |||||||||
Accumulated net realized gain | 112,226 | ||||||||||
Net Assets | 3,735,787,194 |
See Accompanying Notes to Financial Statements.
22
Statement of Assets and Liabilities (continued) – BofA Tax-Exempt Reserves
August 31, 2015
Adviser Class Shares | Net assets | $ | 2,278,344 | ||||||||
Shares outstanding | 2,278,212 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Capital Class Shares | Net assets | $ | 948,693,913 | ||||||||
Shares outstanding | 948,660,817 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Daily Class Shares | Net assets | $ | 8,038,756 | ||||||||
Shares outstanding | 8,038,495 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Institutional Capital Shares | Net assets | $ | 99,160 | ||||||||
Shares outstanding | 99,157 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Institutional Class Shares | Net assets | $ | 22,901,249 | ||||||||
Shares outstanding | 22,900,465 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Investor Class Shares | Net assets | $ | 7,224,801 | ||||||||
Shares outstanding | 7,224,554 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Liquidity Class Shares | Net assets | $ | 10,001 | ||||||||
Shares outstanding | 10,000 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Trust Class Shares | Net assets | $ | 2,746,540,970 | ||||||||
Shares outstanding | 2,746,448,327 | ||||||||||
Net asset value per share | $ | 1.00 |
See Accompanying Notes to Financial Statements.
23
Statement of Operations – BofA Tax-Exempt Reserves
For the Year Ended August 31, 2015
($) | |||||||||||
Investment Income | Interest | 3,121,559 | |||||||||
Expenses | Investment advisory fee | 5,700,185 | |||||||||
Administration fee | 3,660,124 | ||||||||||
Distribution fee: | |||||||||||
Daily Class Shares | 19,902 | ||||||||||
Investor Class Shares | 6,261 | ||||||||||
Service fee: | |||||||||||
Adviser Class Shares | 16,376 | ||||||||||
Daily Class Shares | 14,216 | ||||||||||
Investor Class Shares | 15,653 | ||||||||||
Liquidity Class Shares | 25 | ||||||||||
Shareholder administration fee: | |||||||||||
Institutional Class Shares | 9,169 | ||||||||||
Trust Class Shares | 2,776,648 | ||||||||||
Transfer agent fee | 69,568 | ||||||||||
Pricing and bookkeeping fees | 167,473 | ||||||||||
Trustees' fees | 52,874 | ||||||||||
Custody fee | 48,225 | ||||||||||
Chief Compliance Officer expenses | 13,334 | ||||||||||
Other expenses | 453,523 | ||||||||||
Total Expenses | 13,023,556 | ||||||||||
Fees waived or expenses reimbursed by investment advisor and/or administrator | (7,044,547 | ) | |||||||||
Fees waived by distributor: | |||||||||||
Adviser Class Shares | (16,354 | ) | |||||||||
Daily Class Shares | (34,110 | ) | |||||||||
Institutional Class Shares | (9,119 | ) | |||||||||
Investor Class Shares | (21,869 | ) | |||||||||
Liquidity Class Shares | (23 | ) | |||||||||
Trust Class Shares | (2,775,975 | ) | |||||||||
Net Expenses | 3,121,559 | ||||||||||
Net Investment Income | — | ||||||||||
Net realized gain on investments | 112,252 | ||||||||||
Net Increase Resulting from Operations | 112,252 |
See Accompanying Notes to Financial Statements.
24
Statement of Changes in Net Assets – BofA Tax-Exempt Reserves
Year Ended August 31, | |||||||||||||||
Increase (Decrease) in Net Assets | 2015 ($) | 2014 ($) | |||||||||||||
Operations | Net realized gain on investments | 112,252 | 171,115 | ||||||||||||
Net increase resulting from operations | 112,252 | 171,115 | |||||||||||||
Distributions to Shareholders | From net investment income: | ||||||||||||||
Adviser Class Shares | (5 | ) | (41 | ) | |||||||||||
Capital Class Shares | (651 | ) | (8,499 | ) | |||||||||||
Daily Class Shares | (3 | ) | (32 | ) | |||||||||||
Institutional Capital Shares | — | (a) | — | (a) | |||||||||||
Institutional Class Shares | (14 | ) | (173 | ) | |||||||||||
Investor Class Shares | (2 | ) | (31 | ) | |||||||||||
Liquidity Class Shares | — | (a) | — | (a) | |||||||||||
Trust Class Shares | (1,735 | ) | (20,932 | ) | |||||||||||
From net realized gains: | |||||||||||||||
Adviser Class Shares | (46 | ) | — | ||||||||||||
Capital Class Shares | (6,640 | ) | — | ||||||||||||
Daily Class Shares | (31 | ) | — | ||||||||||||
Institutional Capital Shares | (1 | ) | — | ||||||||||||
Institutional Class Shares | (143 | ) | — | ||||||||||||
Investor Class Shares | (25 | ) | — | ||||||||||||
Liquidity Class Shares | — | (a) | — | ||||||||||||
Trust Class Shares | (17,693 | ) | — | ||||||||||||
Total distributions to shareholders | (26,989 | ) | (29,708 | ) | |||||||||||
Net Capital Stock Transactions | (345,777,771 | ) | 2,481,242 | ||||||||||||
Total increase (decrease) in net assets | (345,692,508 | ) | 2,622,649 | ||||||||||||
Net Assets | Beginning of period | 4,081,479,702 | 4,078,857,053 | ||||||||||||
End of period | 3,735,787,194 | 4,081,479,702 | |||||||||||||
Undistributed net investment income at end of period | — | 2,394 |
(a) Rounds to less than $1.
See Accompanying Notes to Financial Statements.
25
Statement of Changes in Net Assets (continued) – BofA Tax-Exempt Reserves
Capital Stock Activity | |||||||||||||||||||
Year Ended August 31, | |||||||||||||||||||
2015 | 2014 | ||||||||||||||||||
Shares | Dollars ($) | Shares | Dollars ($) | ||||||||||||||||
Adviser Class Shares | |||||||||||||||||||
Subscriptions | 26,198,245 | 26,198,245 | 40,264,804 | 40,264,804 | |||||||||||||||
Distributions reinvested | 3 | 3 | 11 | 11 | |||||||||||||||
Redemptions | (29,503,679 | ) | (29,503,679 | ) | (41,352,049 | ) | (41,352,049 | ) | |||||||||||
Net decrease | (3,305,431 | ) | (3,305,431 | ) | (1,087,234 | ) | (1,087,234 | ) | |||||||||||
Capital Class Shares | |||||||||||||||||||
Subscriptions | 1,216,956,860 | 1,216,956,860 | 1,435,883,783 | 1,435,883,783 | |||||||||||||||
Distributions reinvested | 521 | 521 | 565 | 565 | |||||||||||||||
Redemptions | (1,489,482,034 | ) | (1,489,482,034 | ) | (1,531,939,028 | ) | (1,531,939,028 | ) | |||||||||||
Net decrease | (272,524,653 | ) | (272,524,653 | ) | (96,054,680 | ) | (96,054,680 | ) | |||||||||||
Daily Class Shares | |||||||||||||||||||
Subscriptions | 21,172,793 | 21,172,793 | 14,730,689 | 14,730,689 | |||||||||||||||
Redemptions | (18,070,982 | ) | (18,070,982 | ) | (13,744,334 | ) | (13,744,334 | ) | |||||||||||
Net increase | 3,101,811 | 3,101,811 | 986,355 | 986,355 | |||||||||||||||
Institutional Capital Shares | |||||||||||||||||||
Subscriptions | — | — | 250,000 | 250,000 | |||||||||||||||
Redemptions | (3,187 | ) | (3,187 | ) | (194,565 | ) | (194,565 | ) | |||||||||||
Net increase (decrease) | (3,187 | ) | (3,187 | ) | 55,435 | 55,435 | |||||||||||||
Institutional Class Shares | |||||||||||||||||||
Subscriptions | 2,000,025 | 2,000,025 | 22,857 | 22,857 | |||||||||||||||
Distributions reinvested | 132 | 132 | 146 | 146 | |||||||||||||||
Redemptions | (2,023,287 | ) | (2,023,287 | ) | (1,579,541 | ) | (1,579,541 | ) | |||||||||||
Net decrease | (23,130 | ) | (23,130 | ) | (1,556,538 | ) | (1,556,538 | ) | |||||||||||
Investor Class Shares | |||||||||||||||||||
Subscriptions | 37,220,530 | 37,220,530 | 20,833,631 | 20,833,631 | |||||||||||||||
Distributions reinvested | 9 | 9 | 12 | 12 | |||||||||||||||
Redemptions | (35,570,897 | ) | (35,570,897 | ) | (21,892,338 | ) | (21,892,338 | ) | |||||||||||
Net increase (decrease) | 1,649,642 | 1,649,642 | (1,058,695 | ) | (1,058,695 | ) | |||||||||||||
Liquidity Class Shares | |||||||||||||||||||
Subscriptions | — | — | — | — | |||||||||||||||
Redemptions | — | — | — | — | |||||||||||||||
Net increase (decrease) | — | — | — | — | |||||||||||||||
Trust Class Shares | |||||||||||||||||||
Subscriptions | 2,645,287,033 | 2,645,287,033 | 2,877,937,612 | 2,877,937,612 | |||||||||||||||
Distributions reinvested | 10 | 10 | 30 | 30 | |||||||||||||||
Redemptions | (2,719,959,866 | ) | (2,719,959,866 | ) | (2,776,741,043 | ) | (2,776,741,043 | ) | |||||||||||
Net increase (decrease) | (74,672,823 | ) | (74,672,823 | ) | 101,196,599 | 101,196,599 |
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:
Year Ended August 31, | |||||||||||||||||||||||
Adviser Class Shares | 2015 | 2014 | 2013 | 2012 | 2011 | ||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||
Net investment income | — | — | — | (a) | — | — | (a) | ||||||||||||||||
Net realized gain (loss) on investments | — | (a) | — | (a) | — | (a) | — | (a) | — | (a) | |||||||||||||
Total from investment operations | — | (a) | — | (a) | — | (a) | — | (a) | — | (a) | |||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||
From net investment income | — | (a) | — | (a) | — | (a) | — | (a) | — | ||||||||||||||
From net realized gains | — | (a) | — | — | — | (a) | — | (a) | |||||||||||||||
Total distributions to shareholders | — | (a) | — | (a) | — | (a) | — | (a) | — | (a) | |||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Total return (b)(c) | 0.00 | %(d) | 0.00 | %(d) | 0.00 | %(d) | 0.02 | % | 0.00 | %(d) | |||||||||||||
Ratios to Average Net Assets/Supplemental Data: | |||||||||||||||||||||||
Gross expenses | 0.52 | % | 0.52 | % | 0.51 | % | 0.51 | % | 0.52 | % | |||||||||||||
Net expenses | 0.08 | % | 0.11 | % | 0.16 | %(e) | 0.21 | %(e) | 0.31 | %(e) | |||||||||||||
Waiver/Reimbursement | 0.44 | % | 0.41 | % | 0.35 | % | 0.30 | % | 0.21 | % | |||||||||||||
Net investment income | — | — | — | %(d)(e) | — | (e) | — | %(d)(e) | |||||||||||||||
Net assets, end of period (000s) | $ | 2,278 | $ | 5,584 | $ | 6,671 | $ | 5,638 | $ | 11,797 |
Past performance is no guarantee of future results.
(a) Rounds to less than $0.001 per share.
(b) Total return at net asset value assuming all distributions reinvested.
(c) 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.
(d) Rounds to less than 0.01%.
(e) 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:
Year Ended August 31, | |||||||||||||||||||||||
Capital Class Shares | 2015 | 2014 | 2013 | 2012 (a) | 2011 | ||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||
Net investment income | — | — | — | (b) | — | (b) | 0.001 | ||||||||||||||||
Net realized gain (loss) on investments | — | (b) | — | (b) | — | (b) | — | (b) | — | (b) | |||||||||||||
Total from investment operations | — | (b) | — | (b) | — | (b) | — | (b) | 0.001 | ||||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||
From net investment income | — | (b) | — | (b) | — | (b) | — | (b) | (0.001 | ) | |||||||||||||
From net realized gains | — | (b) | — | — | — | (b) | — | (b) | |||||||||||||||
Total distributions to shareholders | — | (b) | — | (b) | — | (b) | — | (b) | (0.001 | ) | |||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Total return (c)(d) | 0.00 | %(e) | 0.00 | %(e) | 0.01 | % | 0.04 | % | 0.10 | % | |||||||||||||
Ratios to Average Net Assets/Supplemental Data: | |||||||||||||||||||||||
Gross expenses | 0.27 | % | 0.27 | % | 0.27 | % | 0.27 | % | 0.27 | % | |||||||||||||
Net expenses | 0.08 | % | 0.11 | % | 0.16 | %(f) | 0.19 | %(f) | 0.20 | %(f) | |||||||||||||
Waiver/Reimbursement | 0.19 | % | 0.16 | % | 0.11 | % | 0.08 | % | 0.07 | % | |||||||||||||
Net investment income | — | — | 0.01 | %(f) | 0.02 | %(f) | 0.10 | %(f) | |||||||||||||||
Net assets, end of period (000s) | $ | 948,694 | $ | 1,221,197 | $ | 1,317,210 | $ | 1,104,177 | $ | 1,205,520 |
Past performance is no guarantee of future results.
(a) On October 1, 2011, Retail A shares were converted into Capital Class shares.
(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) 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:
Year Ended August 31, | |||||||||||||||||||||||
Daily Class Shares | 2015 | 2014 | 2013 | 2012 | 2011 | ||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||
Net investment income | — | — | — | (a) | — | (a) | — | (a) | |||||||||||||||
Net realized gain (loss) on investments | — | (a) | — | (a) | — | (a) | — | (a) | — | (a) | |||||||||||||
Total from investment operations | — | (a) | — | (a) | — | (a) | — | (a) | — | (a) | |||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||
From net investment income | — | (a) | — | (a) | — | (a) | — | (a) | — | (a) | |||||||||||||
From net realized gains | — | (a) | — | — | — | (a) | — | (a) | |||||||||||||||
Total distributions to shareholders | — | (a) | — | (a) | — | (a) | — | (a) | — | (a) | |||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Total return (b)(c) | 0.00 | %(d) | 0.00 | %(d) | 0.00 | %(d) | 0.02 | % | 0.00 | %(d) | |||||||||||||
Ratios to Average Net Assets/Supplemental Data: | |||||||||||||||||||||||
Gross expenses | 0.87 | % | 0.87 | % | 0.87 | % | 0.87 | % | 0.87 | % | |||||||||||||
Net expenses | 0.08 | % | 0.11 | % | 0.18 | %(e) | 0.21 | %(e) | 0.30 | %(e) | |||||||||||||
Waiver/Reimbursement | 0.79 | % | 0.76 | % | 0.69 | % | 0.66 | % | 0.57 | % | |||||||||||||
Net investment income | — | — | — | %(d)(e) | — | %(d)(e) | — | %(d)(e) | |||||||||||||||
Net assets, end of period (000s) | $ | 8,039 | $ | 4,937 | $ | 3,950 | $ | 7,429 | $ | 6,093 |
Past performance is no guarantee of future results.
(a) Rounds to less than $0.001 per share.
(b) Total return at net asset value assuming all distributions reinvested.
(c) 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.
(d) Rounds to less than 0.01%.
(e) 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:
Year Ended August 31, | |||||||||||||||||||||||
Institutional Capital Shares | 2015 | 2014 | 2013 | 2012 (a) | 2011 | ||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||
Net investment income | — | — | — | (b) | — | (b) | 0.001 | ||||||||||||||||
Net realized gain (loss) on investments | — | (b) | — | (b) | — | (b) | — | (b) | — | (b) | |||||||||||||
Total from investment operations | — | (b) | — | (b) | — | (b) | — | (b) | 0.001 | ||||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||
From net investment income | — | (b) | — | (b) | — | (b) | — | (b) | (0.001 | ) | |||||||||||||
From net realized gains | — | (b) | — | — | — | (b) | — | (b) | |||||||||||||||
Total distributions to shareholders | — | (b) | — | (b) | — | (b) | — | (b) | (0.001 | ) | |||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Total return (c)(d) | 0.00 | %(e) | 0.00 | %(e) | 0.02 | % | 0.04 | % | 0.10 | % | |||||||||||||
Ratios to Average Net Assets/Supplemental Data: | |||||||||||||||||||||||
Gross expenses | 0.27 | % | 0.27 | % | 0.27 | % | 0.27 | % | 0.27 | % | |||||||||||||
Net expenses | 0.08 | % | 0.11 | % | 0.20 | %(f)(g) | 0.19 | %(g) | 0.20 | %(g) | |||||||||||||
Waiver/Reimbursement | 0.19 | % | 0.16 | % | 0.07 | % | 0.08 | % | 0.07 | % | |||||||||||||
Net investment income | — | — | 0.01 | %(g) | 0.02 | %(g) | 0.10 | %(g) | |||||||||||||||
Net assets, end of period (000s) | $ | 99 | $ | 102 | $ | 47 | $ | 360,031 | $ | 328,612 |
Past performance is no guarantee of future results.
(a) After the close of business on September 30, 2011, G-Trust shares were renamed Institutional Capital shares.
(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) 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.
(g) The benefits derived from expense reductions had an impact of less than 0.01%.
See Accompanying Notes to Financial Statements.
30
Financial Highlights – BofA Tax-Exempt Reserves
Selected data for a share outstanding throughout each period is as follows:
Year Ended August 31, | |||||||||||||||||||||||
Institutional Class Shares | 2015 | 2014 | 2013 | 2012 | 2011 | ||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||
Net investment income | — | — | — | (a) | — | (a) | 0.001 | ||||||||||||||||
Net realized gain (loss) on investments | — | (a) | — | (a) | — | (a) | — | (a) | — | (a) | |||||||||||||
Total from investment operations | — | (a) | — | (a) | — | (a) | — | (a) | 0.001 | ||||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||
From net investment income | — | (a) | — | (a) | — | (a) | — | (a) | (0.001 | ) | |||||||||||||
From net realized gains | — | (a) | — | — | — | (a) | — | (a) | |||||||||||||||
Total distributions to shareholders | — | (a) | — | (a) | — | (a) | — | (a) | (0.001 | ) | |||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Total return (b)(c) | 0.00 | %(d) | 0.00 | %(d) | 0.00 | %(d) | 0.03 | % | 0.06 | % | |||||||||||||
Ratios to Average Net Assets/Supplemental Data: | |||||||||||||||||||||||
Gross expenses | 0.31 | % | 0.31 | % | 0.30 | % | 0.31 | % | 0.31 | % | |||||||||||||
Net expenses | 0.08 | % | 0.11 | % | 0.17 | %(e) | 0.21 | %(e) | 0.23 | %(e) | |||||||||||||
Waiver/Reimbursement | 0.23 | % | 0.20 | % | 0.13 | % | 0.10 | % | 0.08 | % | |||||||||||||
Net investment income | — | — | — | %(d)(e) | — | %(d)(e) | 0.07 | %(e) | |||||||||||||||
Net assets, end of period (000s) | $ | 22,901 | $ | 22,924 | $ | 24,480 | $ | 61,654 | $ | 88,637 |
Past performance is no guarantee of future results.
(a) Rounds to less than $0.001 per share.
(b) Total return at net asset value assuming all distributions reinvested.
(c) 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.
(d) Rounds to less than 0.01%.
(e) The benefits derived from expense reductions had an impact of less than 0.01%.
See Accompanying Notes to Financial Statements.
31
Financial Highlights – BofA Tax-Exempt Reserves
Selected data for a share outstanding throughout each period is as follows:
Year Ended August 31, | |||||||||||||||||||||||
Investor Class Shares | 2015 | 2014 | 2013 | 2012 (a) | 2011 | ||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||
Net investment income | — | — | — | (b) | — | — | (b) | ||||||||||||||||
Net realized gain (loss) on investments | — | (b) | — | (b) | — | (b) | — | (b) | — | (b) | |||||||||||||
Total from investment operations | — | (b) | — | (b) | — | (b) | — | (b) | — | (b) | |||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||
From net investment income | — | (b) | — | (b) | — | (b) | — | (b) | — | (b) | |||||||||||||
From net realized gains | — | (b) | — | — | — | (b) | — | (b) | |||||||||||||||
Total distributions to shareholders | — | (b) | — | (b) | — | (b) | — | (b) | — | (b) | |||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Total return (c)(d) | 0.00 | %(e) | 0.00 | %(e) | 0.00 | %(e) | 0.02 | % | 0.00 | %(e) | |||||||||||||
Ratios to Average Net Assets/Supplemental Data: | |||||||||||||||||||||||
Gross expenses | 0.62 | % | 0.62 | % | 0.62 | % | 0.62 | % | 0.62 | % | |||||||||||||
Net expenses | 0.09 | % | 0.11 | % | 0.17 | %(f) | 0.21 | %(f) | 0.27 | %(f) | |||||||||||||
Waiver/Reimbursement | 0.53 | % | 0.51 | % | 0.45 | % | 0.41 | % | 0.35 | % | |||||||||||||
Net investment income | — | — | — | %(e)(f) | — | (f) | — | %(e)(f) | |||||||||||||||
Net assets, end of period (000s) | $ | 7,225 | $ | 5,575 | $ | 6,633 | $ | 4,261 | $ | 2,534 |
Past performance is no guarantee of future results.
(a) On October 1, 2011, Class A shares were converted to Investor Class shares.
(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) The benefits derived from expense reductions had an impact of less than 0.01%.
See Accompanying Notes to Financial Statements.
32
Financial Highlights – BofA Tax-Exempt Reserves
Selected data for a share outstanding throughout each period is as follows:
Year Ended August 31, | |||||||||||||||||||||||
Liquidity Class Shares | 2015 | 2014 | 2013 | 2012 | 2011 | ||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||
Net investment income | — | — | — | (a) | — | — | (a) | ||||||||||||||||
Net realized gain (loss) on investments | — | (a) | — | (a) | — | (a) | — | (a) | — | (a) | |||||||||||||
Total from investment operations | — | (a) | — | (a) | — | (a) | — | (a) | — | (a) | |||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||
From net investment income | — | (a) | — | (a) | — | (a) | — | (a) | — | (a) | |||||||||||||
From net realized gains | — | (a) | — | — | — | (a) | — | (a) | |||||||||||||||
Total distributions to shareholders | — | (a) | — | (a) | — | (a) | — | (a) | — | (a) | |||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Total return (b)(c) | 0.00 | %(d) | 0.00 | %(d) | 0.00 | %(d) | 0.02 | % | 0.00 | %(d) | |||||||||||||
Ratios to Average Net Assets/Supplemental Data: | |||||||||||||||||||||||
Gross expenses | 0.52 | % | 0.50 | % | 0.52 | % | 0.51 | % | 0.52 | % | |||||||||||||
Net expenses | 0.08 | % | 0.11 | % | 0.20 | %(e) | 0.21 | %(e) | 0.31 | %(e) | |||||||||||||
Waiver/Reimbursement | 0.44 | % | 0.39 | % | 0.32 | % | 0.30 | % | 0.21 | % | |||||||||||||
Net investment income | — | — | — | %(d)(e) | — | (e) | — | %(d)(e) | |||||||||||||||
Net assets, end of period (000s) | $ | 10 | $ | 10 | $ | 10 | $ | 218 | $ | 218 |
Past performance is no guarantee of future results.
(a) Rounds to less than $0.001 per share.
(b) Total return at net asset value assuming all distributions reinvested.
(c) 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.
(d) Rounds to less than 0.01%.
(e) The benefits derived from expense reductions had an impact of less than 0.01%.
See Accompanying Notes to Financial Statements.
33
Financial Highlights – BofA Tax-Exempt Reserves
Selected data for a share outstanding throughout each period is as follows:
Year Ended August 31, | |||||||||||||||||||||||
Trust Class Shares | 2015 | 2014 | 2013 | 2012 | 2011 | ||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||
Net investment income | — | — | — | (a) | — | — | (a) | ||||||||||||||||
Net realized gain (loss) on investments | — | (a) | — | (a) | — | (a) | — | (a) | — | (a) | |||||||||||||
Total from investment operations | — | (a) | — | (a) | — | (a) | — | (a) | — | (a) | |||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||
From net investment income | — | (a) | — | (a) | — | (a) | — | (a) | — | (a) | |||||||||||||
From net realized gains | — | (a) | — | — | — | (a) | — | (a) | |||||||||||||||
Total distributions to shareholders | — | (a) | — | (a) | — | (a) | — | (a) | — | (a) | |||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Total return (b)(c) | 0.00 | %(d) | 0.00 | %(d) | 0.00 | %(d) | 0.02 | % | 0.02 | % | |||||||||||||
Ratios to Average Net Assets/Supplemental Data: | |||||||||||||||||||||||
Gross expenses | 0.37 | % | 0.37 | % | 0.37 | % | 0.37 | % | 0.37 | % | |||||||||||||
Net expenses | 0.08 | % | 0.11 | % | 0.17 | %(e) | 0.21 | %(e) | 0.28 | %(e) | |||||||||||||
Waiver/Reimbursement | 0.29 | % | 0.26 | % | 0.20 | % | 0.16 | % | 0.09 | % | |||||||||||||
Net investment income | — | — | — | %(d)(e) | — | (e) | 0.02 | %(e) | |||||||||||||||
Net assets, end of period (000s) | $ | 2,746,541 | $ | 2,821,151 | $ | 2,719,857 | $ | 2,834,101 | $ | 3,058,369 |
Past performance is no guarantee of future results.
(a) Rounds to less than $0.001 per share.
(b) Total return at net asset value assuming all distributions reinvested.
(c) 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.
(d) Rounds to less than 0.01%.
(e) 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
August 31, 2015
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.
The Fund is an investment company and accordingly follows the investment company accounting and reporting guidance of the Financial Accounting Standards Board (FASB) Accounting Standard Codification Topic 946 Financial Services—Investment Companies.
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 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). These investments may trade in markets that are not considered to be active, but whose values are supported by observable inputs such as U.S. government obligations and agency securities, investment-grade corporate bonds and state, municipal and provincial obligations. For money market funds operating under Rule 2a-7 of the
35
BofA Tax-Exempt Reserves, August 31, 2015
1940 Act, securities are valued at amortized cost which approximates market value and are considered to be valued using Level 2 inputs.
• Level 3 – Prices determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable or less reliable, unobservable inputs may be used. Unobservable inputs may include management's own assumptions about the factors market participants would use in pricing an investment.
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
Security Transactions
Security transactions are accounted for on the trade date. Cost is determined and gains (losses) are based upon the specific identification method for both financial statement and federal income tax purposes.
Income Recognition
Interest income is recorded on the accrual basis. Premium and discount are amortized and accreted, respectively, on all debt securities, unless otherwise noted.
Expenses
General expenses of the Trust are allocated to the 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. Expenses directly attributable to a specific class of shares are charged to that share class.
Determination of Class Net Asset Value
All income, expenses (other than class-specific expenses, which are charged to that share class, as shown on the Statement of Operations) and realized 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 based on the following methodologies: income and expenses are allocated to each class based on the settled shares method, while realized gains (losses) are allocated based on the relative net assets of each class.
Federal Income Tax Status
The Fund intends to qualify each year as a "regulated investment company" under Subchapter M of the Internal Revenue Code, as amended, and to distribute substantially all of its tax-exempt or taxable income, if any, for its tax year, and as such will not be subject to federal income taxes. In addition, the Fund intends to distribute in each calendar year substantially all of its net investment income, capital gains and certain other amounts, if any, such that the Fund 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.
For the year ended August 31, 2015, permanent book and tax basis differences resulting primarily from distribution
36
BofA Tax-Exempt Reserves, August 31, 2015
re-designations were identified and reclassified among the components of the Fund's net assets as follows:
Undistributed Net Investment Income | Accumulated Net Realized Gain (Loss) | Paid-In-Capital | |||||||||
$ | 16 | $ | (16 | ) | $ | — |
The tax character of distributions paid during the years ended August 31, 2015 and August 31, 2014 were as follows:
August 31, | |||||||||||
Distributions paid from | 2015 | 2014 | |||||||||
Tax-Exempt Income | $ | — | $ | 29,674 | |||||||
Ordinary Income* | $ | 2,410 | $ | 34 | |||||||
Long-Term Capital Gains | $ | 24,579 | $ | — |
* For tax purposes, short-term capital gain distributions, if any, are considered ordinary income distributions.
As of August 31, 2015, the components of distributable earnings on a tax basis were as follows:
Undistributed Tax-Exempt Income | Undistributed Ordinary Income | Undistributed Long-Term Capital Gains | |||||||||
$ | — | $ | 55,515 | $ | 56,711 |
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
BofA Advisors, LLC (the "Advisor"), an indirect, wholly owned subsidiary of Bank of America Corporation ("BofA Corp."), 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 | % |
For the year ended August 31, 2015, 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
37
BofA Tax-Exempt Reserves, August 31, 2015
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 year ended August 31, 2015, the 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.
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, 2015. There is no guarantee that this expense limitation will continue after such date.
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 (together, 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 the 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.
Distribution and Shareholder Servicing Fees
BofA Distributors, Inc. (the "Distributor"), an affiliate of the Advisor and an indirect, wholly owned subsidiary of BofA Corp., 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 sales support services. The Distributor is entitled to retain some or all fees payable under the Distribution Plan in certain circumstances, including but not limited to, instances when there is no broker of record or when certain qualification standards have not been met by the broker of record. In certain instances, payments will continue to be made pursuant to the Distribution Plan with respect to shares held in classes that are closed to new investors and shares held by specific investors who are not eligible to make additional purchases in a particular share class.
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.
38
BofA Tax-Exempt Reserves, August 31, 2015
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, 2015 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 the 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, 2015, so that the Fund's ordinary operating expenses (excluding any acquired fund fees and expenses, 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 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 August 31, 2015, the amounts potentially recoverable pursuant to this arrangement are as follows:
Amount of potential recovery expiring August 31: | Total potential | Amount recovered during the year | |||||||||||||||||
2018 | 2017 | 2016 | recovery | ended 08/31/2015 | |||||||||||||||
$ | 2,560,403 | $ | 2,730,589 | $ | 3,197,030 | $ | 8,488,022 | $ | — |
39
BofA Tax-Exempt Reserves, August 31, 2015
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%. Pursuant to a September 25, 2015
amendment, an annual administration fee of $25,000 is also accrued and apportioned to each fund participating in the line of credit based on the average net assets of the participating funds. Prior to the September 25, 2015 amendment, an annual administration fee of $10,000 was accrued and apportioned to each participating fund under the same terms.
For the year ended August 31, 2015, 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.
40
BofA Tax-Exempt Reserves, August 31, 2015
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.
Note 8. Money Market Fund Regulatory Matters
On July 23, 2014, the Securities and Exchange Commission voted to amend Rule 2a-7, which governs money market funds (such as the Fund). The majority of these amendments take effect in 2016. The most significant change is a requirement that institutional (i.e. large volume institutions such as banks, trusts, insurance companies, etc.) prime and institutional municipal money market funds move to a floating net asset value. Retail (i.e. a money market mutual fund that has policies and procedures reasonably designed to limit all beneficial owners of the money market fund to natural persons) prime, municipal, government and treasury money market funds will continue to transact at a stable $1.00 share price. In addition, the boards of trustees of non-government money market funds may impose a temporary liquidity fee of up to 2% of the value of a redemption and/or suspend (or "gate") redemptions temporarily should a money market fund's level of weekly liquid assets fall below 30% of its total assets. At this time, the Fund's management is evaluating the implications of the reforms and their impact on the Fund, including potential effects on the Fund's operations and returns.
41
Report of Independent Registered Public Accounting Firm
To the Trustees of BofA Funds Series Trust and Shareholders of BofA Tax-Exempt Reserves
In our opinion, the accompanying statement of assets and liabilities, including the investment portfolio, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of BofA Tax-Exempt Reserves (the "Fund") (a series of BofA Funds Series Trust) at August 31, 2015, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and the financial highlights for each of the periods indicated, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as "financial statements") are the responsibility of the Fund's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at August 31, 2015 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
Boston, Massachusetts
October 21, 2015
42
Federal Income Tax Information (Unaudited) – BofA Tax-Exempt Reserves
The Fund hereby designates as a capital gain dividend with respect to the fiscal year ended August 31, 2015, $56,721, or if subsequently determined to be different, the net capital gain of such year.
The Fund will notify shareholders in January 2016 of amounts for use in preparing 2015 income tax returns.
43
Fund Governance
The Trustees serve terms of indefinite duration. The names, addresses and ages of the Trustees and officers of the Funds in the BofA Funds Series Trust, the year each was first elected or appointed to office, their principal business occupations during at least the last five years, the number of Funds overseen by each Trustee and other directorships they hold are shown below. Each officer listed below serves as an officer of each Fund in the BofA Funds Series Trust.
Independent Trustees
Name, Address, and Year of Birth, Position with Funds, Year First Elected or Appointed to Office | Principal Occupation(s) During Past Five Years, Number of Funds in BofA Funds Series Trust Overseen by Trustee, Other Directorships Held | ||||||
Harrison M. Bains (Born 1943) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Trustee (since 2011) | Retired. Oversees 11 Funds. Mercer Funds (9 funds); BG Medicine, Inc. (life sciences). | ||||||
Paul Glasserman (Born 1962) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Trustee (since 2011) | Jack R. Anderson Professor of Business—Columbia Business School, since 2000 (Senior Vice Dean, 2004-2008; Professor, 1995-2000); Visiting Scholar—Federal Reserve Bank of New York, from 2008 to 2012; Consultant to the U.S. Treasury, 2011-2014; Independent consultant to financial firms since 1995. Oversees 11 Funds. | ||||||
William A. Hawkins (Born 1942) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Trustee (since 2005)1 | Managing Director—Overton Partners (financial consulting), August 2010 to present. Oversees 11 Funds. Columbia Funds (127 funds). | ||||||
R. Glenn Hilliard (Born 1943) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Trustee (since 2005)1 | Chairman and Chief Executive Officer—Hilliard Group LLC (investing and consulting), from 2003 through current; Non-Executive Director & Chairman—CNO Financial Group, Inc. (formerly Conseco, Inc.) (insurance), September 2003-May 2011. Oversees 11 Funds. Columbia Funds (127 funds). | ||||||
William J. Kelly (Born 1960) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Trustee (since 2011) | Chief Executive Officer—Chartered Alternative Investment Analyst Association, January 2014 to present. Oversees 11 Funds. | ||||||
Debra Perry (Born 1951) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Trustee (since 2011) | Retired. Managing Member—Perry Consulting LLC (advisory firm), from 2008 through 2014. Oversees 11 Funds. Korn/Ferry International (recruiting); Sanford C. Bernstein Fund, Inc. (18 funds); Board Member—PartnerRE (reinsurance). |
1 Includes service as trustees of Columbia Funds Series Trust, the predecessor trust.
The Statement of Additional Information includes additional information about the Trustees of the Funds and is available, without charge, upon request by calling 888-331-0904. (Institutional Investors, please call 800-353-0828.)
44
Fund Governance (continued)
Officers
Name, Address, and Year of Birth, Position with Funds, Year First Elected or Appointed to Office | Principal Occupation(s) During Past Five Years | ||||||
Michael J. Pelzar (Born 1968) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 President (since 2010) | President, BofA Global Capital Management Group, LLC since May 2010; Managing Director and Head of Product Management of the Advisor from 2007 to 2010. | ||||||
Kenneth B. Crotty (Born 1961) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Vice President (since 2015) Assistant Treasurer (2014-2015) | Chief Operating Officer, BofA Global Capital Management Group, LLC since August 2013; President KBC Consulting 2012-2013; Global Chief Operating Officer of Mercer Investments and President of Mercer Investments US 2006-2012. | ||||||
Jeffrey R. Coleman (Born 1969) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Senior Vice President, Chief Financial Officer, Chief Accounting Officer (since 2010) and Treasurer (since 2009) | Managing Director of Fund Administration and Transfer Agency Oversight of the Advisor since May 2010; Director of Fund Administration of the Advisor since January 2006. | ||||||
Marina Belaya (Born 1967) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Secretary and Chief Legal Officer (since 2013) | Assistant General Counsel, Director, Bank of America since July 2007. | ||||||
James R. Bordewick (Born 1959) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Senior Vice President and Chief Compliance Officer (since 2010) | Chief Compliance Officer of U.S. Trust, Bank of America Private Wealth Management since 2012; Chief Compliance Officer of the Advisor and Managing Director, Bank of America since May 2010. | ||||||
Barry S. Vallan (Born 1969) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Deputy Treasurer (since 2010) and Controller (since 2006) | Director of Fund Administration of the Advisor since May 2010; Vice President—Fund Treasury of the Advisor since October 2004; Vice President—Fund Administration of the Advisor since May 2002. |
45
Fund Governance (continued)
Officers (continued)
Name, Address and Year of Birth, Position with Funds, Year First Elected or Appointed to Office | Principal Occupation(s) During Past Five Years | ||||||
Patrick Campbell (Born 1957) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Vice President (since 2015) Assistant Treasurer (2010-2015) | Director of Transfer Agency Oversight, BofA Global Capital Management Group, LLC since May 2010. | ||||||
Rana J. Wright (Born 1978) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Assistant Secretary (since 2014) | Assistant General Counsel and Director, Bank of America, and Chief Legal Officer, BofA Global Capital Management Group, LLC, since June 2014; Partner, Reed Smith LLP, 2012 to 2014; Associate, Reed Smith LLP, 2003 to 2011. | ||||||
Nitin Mehra (Born 1977) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Vice President (since 2015) Assistant Treasurer (2013-2015) | Managing Director and Head of Strategy and Product at BofA Global Capital Management Group, LLC since May 2011; Managing Director of Strategy and Product at BofA Global Capital Management Group, LLC from 2010-2011; Director of Product Strategy and Development of the Advisor from 2008-2010. |
46
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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.
An investment in money market mutual funds is not insured or guaranteed by Bank of America, N.A. or its affiliates, or by the Federal Deposit Insurance Corporation or any other government agency. Although money market mutual funds seek to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in money market mutual funds.
BofA® 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
49
BofA Global Capital Management
100 Federal Street
Boston, MA 02110
Questions or comments regarding your account or investment in the Funds should be directed to:
Boston Financial Data Services
P.O. Box 8723
Boston, MA 02266-8723
Retail Investors: 888.331.0904
Institutional Investors: 800.353.0828
BofA Tax-Exempt Reserves
Annual Report, August 31, 2015
© 2015 Bank of America Corporation. All rights reserved.
BofA Distributors, Inc.
100 Federal Street, Boston, MA 02110
888.331.0904 (Institutional Investors: 800.353.0828) www.bofacapital.com
AR-TER-1015
BofA Funds
Annual Report
August 31, 2015
• 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 | 6 | ||||||
Statement of Operations | 8 | ||||||
Statement of Changes in Net Assets | 9 | ||||||
Financial Highlights | 11 | ||||||
Notes to Financial Statements | 20 | ||||||
Report of Independent Registered Public Accounting Firm | 27 | ||||||
Federal Income Tax Information | 28 | ||||||
Fund Governance | 29 | ||||||
Important Information About This Report | 33 |
The views expressed in this report reflect the current views of the respective parties. These views are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to predict so actual outcomes and results may differ significantly from the views expressed. These views are subject to change at any time based upon economic, market or other conditions and the respective parties disclaim any responsibility to update such views. These views may not be relied on as investment advice and, because investment decisions for a BofA Fund are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any particular BofA Fund. References to specific securities should not be construed as a recommendation or investment advice.
President's Message
To Our Valued Shareholders:
A year ago the consensus within the financial community was that the interest rate environment would soon be more hospitable to money market fund investors as a strengthening U.S. economy finally moved the Federal Reserve ("the Fed") to raise short-term interest rates. That rate hike has yet to materialize, so for liquidity investors, the most important news out of Washington has come not from the Fed, but from the U.S. Securities and Exchange Commission ("SEC"), which adopted sweeping changes to the regulations governing U.S. money market funds.
To take effect in October 2016, the amendments to Rule 2a-7 under the Investment Company Act of 1940 include two important reforms that are prompting investors to reevaluate their liquidity investment strategies:
• Institutional prime and institutional municipal money market funds must "float" their net asset values ("NAVs"), which means the value of the funds' shares would be based on the market value of their underlying securities. Only government funds and funds serving retail investors—defined as "natural persons"—would retain their stable, $1-per-share NAVs.
• The boards of trustees of non-government money market funds may impose a temporary liquidity fee of up to 2% of the value of a redemption or to suspend or "gate" redemptions temporarily should a money market fund's level of weekly liquid assets fall below 30% of its total assets.
These changes are part of a multi-year effort on the part of the SEC to make money market funds more resilient during market crises, when heavy redemption activity can exert strong downward pressure on funds' NAVs.
After extensive analysis, we have concluded that the impact of the rule changes will be less significant than many investors first believed. With regard to floating NAV funds, for example, fund managers still will go to great lengths to maintain the $1-per-share NAV after the floating NAV rule takes effect. If there is any movement around the $1 mark, that variation likely would be very limited under normal market conditions because of the preponderance of short-term, high-quality securities in money market funds. As for liquidity fees and redemption gates, these measures would be a last resort for fund managers because of the reputational damage money market fund companies would incur were they to impose these measures.
Recognizing the importance of money market fund reform to our shareholders, BofA Global Capital Management has launched a series of whitepapers analyzing the potential impact of the rule changes on clients' liquidity-management programs. These papers are available at www.bofacapital.com. Our preparations for the implementation of the reforms are proceeding, and we anticipate no problems meeting the October 2016 compliance deadline.
Shifting back to the macroeconomic environment, the Fed held the benchmark federal funds rate steady in September, but we believe the drop in the U.S. unemployment rate and steady economic growth should allow the central bank to begin increasing the federal funds rate from the current 0% to .25% rate—in the near future. This, in our view, will mark the beginning of a gradual increase in rates that over time should translate into potentially more attractive yields for money market fund investors. We are positioning the BofA Funds to capture the potential benefits of a rising-rate environment.
Given the complexity of modern financial markets and the ever-present threat of unforeseen investment challenges, the managers of the BofA Funds will continue to employ a conservative investment process designed to achieve your most important goals: principal protection, a high degree of liquidity and competitive risk-adjusted yields. We believe our conservative investment posture; our focus on the management of liquidity investments; and the resources available to us as part of one of the world's largest financial institutions position BofA Global Capital Management to help you reach your liquidity objectives.
On behalf of everyone at BofA Global Capital Management, I thank you for the opportunity to have served you over the past year. We appreciate your business, and we look forward to working with you in the months and years ahead.
Sincerely,
Michael Pelzar
President, BofA Global Capital Management
ARQ5HMRY
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:
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 $1,000. Please refer to the Fund's prospectus for additional details.
3/1/15 – 8/31/15 (Unaudited)
Account value at the beginning of the period ($) | 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 | 1,000.10 | 1,024.85 | 0.35 | 0.36 | 0.07 | ||||||||||||||||||||||||
Capital Class Shares | 1,000.00 | 1,000.00 | 1,000.10 | 1,024.85 | 0.35 | 0.36 | 0.07 | ||||||||||||||||||||||||
Daily Class Shares | 1,000.00 | 1,000.00 | 1,000.10 | 1,024.85 | 0.35 | 0.36 | 0.07 | ||||||||||||||||||||||||
Institutional Capital Shares | 1,000.00 | 1,000.00 | 1,000.10 | 1,024.85 | 0.35 | 0.36 | 0.07 | ||||||||||||||||||||||||
Institutional Class Shares | 1,000.00 | 1,000.00 | 1,000.10 | 1,024.85 | 0.35 | 0.36 | 0.07 | ||||||||||||||||||||||||
Investor Class Shares | 1,000.00 | 1,000.00 | 1,000.10 | 1,024.85 | 0.35 | 0.36 | 0.07 | ||||||||||||||||||||||||
Investor II Class Shares | 1,000.00 | 1,000.00 | 1,000.10 | 1,024.85 | 0.35 | 0.36 | 0.07 | ||||||||||||||||||||||||
Liquidity Class Shares | 1,000.00 | 1,000.00 | 1,000.10 | 1,024.85 | 0.35 | 0.36 | 0.07 | ||||||||||||||||||||||||
Trust Class Shares | 1,000.00 | 1,000.00 | 1,000.10 | 1,024.85 | 0.35 | 0.36 | 0.07 |
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 Treasury Reserves
August 31, 2015
Government & Agency Obligations – 6.0% | |||||||||||
Par ($) | Value ($) | ||||||||||
U.S. Government Obligations – 6.0% | |||||||||||
U.S. Treasury Floating Rate Note | |||||||||||
0.140% 01/31/16 (09/01/15) (a)(b) | 14,040,000 | 14,038,687 | |||||||||
0.148% 10/31/16 / (09/01/15) (a)(b) | 59,455,000 | 59,434,707 | |||||||||
0.164% 04/30/16 (09/01/15) (a)(b) | 132,500,000 | 132,502,393 | |||||||||
0.165% 07/31/16 (09/01/15) (a)(b) | 84,321,000 | 84,320,589 | |||||||||
0.172% 07/31/17 (09/01/15) (a)(b) | 94,075,000 | 94,069,972 | |||||||||
U.S. Treasury Note | |||||||||||
0.250% 02/29/16 | 200,000,000 | 200,017,271 | |||||||||
2.125% 02/29/16 | 19,215,000 | 19,394,594 | |||||||||
U.S. Government Obligations Total | 603,778,213 | ||||||||||
Total Government & Agency Obligations (cost of $603,778,213) | 603,778,213 |
Repurchase Agreements – 94.0%
Joint Repurchase Agreement | |||||||||||
Treasury Account, dated 08/31/15, due 09/01/15 (repurchase proceeds $2,694,337,210) (c) | 2,694,328,000 | 2,694,328,000 | |||||||||
Repurchase agreement with | |||||||||||
Bank of Montreal, dated 06/10/15, due 09/09/15 at 0.090%, collateralized by U.S. Treasury obligations with various maturities to 11/15/42, market value $255,053,011 (repurchase proceeds $250,056,875) (d) | 250,000,000 | 250,000,000 | |||||||||
Repurchase agreement with | |||||||||||
Bank of Montreal, dated 08/31/15, due 09/01/15 at 0.100%, collateralized by U.S. Treasury obligations with various maturities to 10/31/20, market value $285,600,805 (repurchase proceeds $280,000,778) | 280,000,000 | 280,000,000 |
Par ($) | Value ($) | ||||||||||
Repurchase agreement with | |||||||||||
Bank of Nova Scotia, dated 08/31/15, due 09/01/15 at 0.130%, collateralized by U.S. Treasury obligations with various maturities to 02/15/44, market value $80,580,335 (repurchase proceeds $79,000,285) | 79,000,000 | 79,000,000 | |||||||||
Repurchase agreement with | |||||||||||
BNP Paribas Securities Corp., dated 08/31/15, due 09/01/15 at 0.130%, collateralized by U.S. Government Agency obligations with various maturities to 11/20/64, market value $285,611,131 (repurchase proceeds $280,001,011) | 280,000,000 | 280,000,000 | |||||||||
Repurchase agreement with | |||||||||||
Citibank N.A., dated 08/31/15, due 09/01/15 at 0.120%, collateralized by U.S. Treasury obligations and U.S. Government Agency obligations with various maturities to 02/20/61, market value $81,600,273 (repurchase proceeds $80,000,267) | 80,000,000 | 80,000,000 | |||||||||
Repurchase agreement with | |||||||||||
Credit Agricole CIB US, dated 08/27/15, due 09/03/15 at 0.100%, collateralized by U.S. Treasury obligations with various maturities to 05/15/45, market value $510,007,157 (repurchase proceeds $500,009,722) | 500,000,000 | 500,000,000 |
See Accompanying Notes to Financial Statements.
2
BofA Treasury Reserves
August 31, 2015
Repurchase Agreements (continued)
Par ($) | Value ($) | ||||||||||
Repurchase agreement with | |||||||||||
Credit Suisse Securities USA LLC, dated 08/31/15, due 09/01/15 at 0.130%, collateralized by U.S. Treasury obligations with various maturities to 05/15/22, market value $489,600,214 (repurchase proceeds $480,001,733) | 480,000,000 | 480,000,000 | |||||||||
Repurchase agreement with | |||||||||||
Goldman Sachs & Co., dated 08/19/15, due 09/18/15 at 0.080%, collateralized by U.S. Treasury obligations with various maturities to 08/15/41, market value $510,014,740 (repurchase proceeds $500,033,333) (d) | 500,000,000 | 500,000,000 | |||||||||
Repurchase agreement with | |||||||||||
Goldman Sachs & Co., dated 08/31/15, due 09/01/15 at 0.020%, collateralized by U.S. Treasury obligations with various maturities to 02/15/39, market value $81,600,102 (repurchase proceeds $80,000,044) | 80,000,000 | 80,000,000 | |||||||||
Repurchase agreement with | |||||||||||
HSBC Securities USA, Inc., dated 08/31/15, due 09/01/15 at 0.110%, collateralized by U.S. Treasury obligations with various maturities to 07/31/22, market value $357,000,669 (repurchase proceeds $350,001,069) | 350,000,000 | 350,000,000 | |||||||||
Repurchase agreement with | |||||||||||
J.P. Morgan Securities, Inc., dated 08/31/15, due 09/01/15 at 0.110%, collateralized by U.S. Treasury obligations with various maturities to 02/29/20, market value $233,581,869 (repurchase proceeds $229,000,700) | 229,000,000 | 229,000,000 |
Par ($) | Value ($) | ||||||||||
Repurchase agreement with | |||||||||||
Mitsubishi UFJ Securities USA, Inc., dated 08/31/15, due 09/01/15 at 0.110%, collateralized by U.S. Treasury obligations with various maturities to 05/15/45, market value $692,582,191 (repurchase proceeds $679,002,075) | 679,000,000 | 679,000,000 | |||||||||
Repurchase agreement with | |||||||||||
Mitsubishi UFJ Securities USA, Inc., dated 08/31/15, due 09/01/15 at 0.120%, collateralized by U.S. Government Agency obligations with various maturities to 07/20/65, market value $928,203,094 (repurchase proceeds $910,003,033) | 910,000,000 | 910,000,000 | |||||||||
Repurchase agreement with | |||||||||||
Societe Generale NY, dated 08/27/15, due 09/03/15 at 0.100%, collateralized by U.S. Treasury obligations with various maturities to 02/15/45, market value $255,003,604 (repurchase proceeds $250,004,861) | 250,000,000 | 250,000,000 | |||||||||
Repurchase agreement with | |||||||||||
Societe Generale NY, dated 08/28/15, due 09/04/15 at 0.100%, collateralized by U.S. Treasury obligations with various maturities to 05/15/44, market value $204,002,315 (repurchase proceeds $200,003,889) | 200,000,000 | 200,000,000 |
See Accompanying Notes to Financial Statements.
3
BofA Treasury Reserves
August 31, 2015
Repurchase Agreements (continued)
Par ($) | Value ($) | ||||||||||
Repurchase agreement with | |||||||||||
Societe Generale NY, dated 08/31/15, due 09/01/15 at 0.130%, collateralized by U.S. Treasury obligations with various maturities to 08/15/45, market value $765,002,777 (repurchase proceeds $750,002,708) | 750,000,000 | 750,000,000 | |||||||||
Repurchase agreement with | |||||||||||
Societe Generale NY, dated 08/31/15, due 09/01/15 at 0.140%, collateralized by a U.S. Treasury obligation and U.S. Government Agency obligations with various maturities to 04/20/45, market value $204,000,851 (repurchase proceeds $200,000,778) | 200,000,000 | 200,000,000 | |||||||||
Repurchase agreement with | |||||||||||
TD Securities USA LLC, dated 08/31/15, due 09/01/15 at 0.110%, collateralized by U.S. Treasury obligations with various maturities to 11/15/44, market value $259,080,867 (repurchase proceeds $254,000,776) | 254,000,000 | 254,000,000 | |||||||||
Repurchase agreement with | |||||||||||
Wells Fargo Securities, LLC, dated 06/08/15, due 09/08/15 at 0.100%, collateralized by U.S. Treasury obligations with various maturities to 02/15/43, market value $24,730,645 (repurchase proceeds $24,246,195) | 24,240,000 | 24,240,000 |
Par ($) | Value ($) | ||||||||||
Repurchase agreement with | |||||||||||
Wells Fargo Securities, LLC, dated 06/11/15, due 09/09/15 at 0.100%, collateralized by a U.S. Treasury obligation maturing 08/15/43, market value $60,193,728 (repurchase proceeds $59,014,750) | 59,000,000 | 59,000,000 | |||||||||
Repurchase agreement with | |||||||||||
Wells Fargo Securities, LLC, dated 07/06/15, due 09/04/15 at 0.120%, collateralized by U.S. Government Agency obligations with various maturities to 08/20/45, market value $102,019,380 (repurchase proceeds $100,020,000) | 100,000,000 | 100,000,000 | |||||||||
Repurchase agreement with | |||||||||||
Wells Fargo Securities, LLC, dated 07/27/15, due 09/15/15 at 0.110%, collateralized by a U.S. Treasury obligation maturing 12/31/16, market value $100,481,059 (repurchase proceeds $98,515,049) | 98,500,000 | 98,500,000 | |||||||||
Repurchase agreement with | |||||||||||
Wells Fargo Securities, LLC, dated 08/05/15, due 09/14/15 at 0.120%, collateralized by U.S. Government Agency obligations with various maturities to 08/20/45, market value $88,747,987 (repurchase proceeds $87,011,600) | 87,000,000 | 87,000,000 |
See Accompanying Notes to Financial Statements.
4
BofA Treasury Reserves
August 31, 2015
Repurchase Agreements (continued)
Par ($) | Value ($) | ||||||||||
Repurchase agreement with | |||||||||||
Wells Fargo Securities, LLC, dated 08/19/15, due 09/18/15 at 0.130%, collateralized by U.S. Government Agency obligations with various maturities to 08/20/45, market value $40,801,916 (repurchase proceeds $40,004,333) | 40,000,000 | 40,000,000 | |||||||||
Total Repurchase Agreements (cost of $9,454,068,000) | 9,454,068,000 | ||||||||||
Total Investments – 100.0% (cost of $10,057,846,213) (e) | 10,057,846,213 | ||||||||||
Other Assets & Liabilities, Net – 0.0% | (1,103,853 | ) | |||||||||
Net Assets – 100.0% | 10,056,742,360 |
Notes to Investment Portfolio:
Portfolio holdings are subject to change periodically and may not be representative of current holdings.
(a) The interest rate shown on floating rate or variable rate securities reflects the rate at August 31, 2015.
(b) Parenthetical date represents the effective maturity date for the security which may represent the demand date for puttable or callable securities or the prerefunded date for certain securities where applicable.
(c) See the tables following the Notes to the Investment Portfolio for additional information on the Joint Repurchase Agreement Treasury Account.
(d) This security is subject to a demand feature.
(e) Cost for federal income tax purposes is $10,057,846,213.
The following table summarizes the inputs used, as of August 31, 2015, 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 | $ | — | $ | 603,778,213 | $ | — | $ | 603,778,213 | |||||||||||
Total Repurchase Agreements | — | 9,454,068,000 | — | 9,454,068,000 | |||||||||||||||
Total Investments | $ | — | $ | 10,057,846,213 | $ | — | $ | 10,057,846,213 |
The Fund's assets are assigned to the Level 2 input category which represents short-term obligations which are valued using amortized cost, an income approach which converts future cash flows to a present value based upon the discount or premium at purchase.
For the year ended August 31, 2015, all of the securities held in the Portfolio were Level 2 and there were no transfers to report.
For more information on valuation inputs, please refer to the Security Valuation section in the accompanying Notes to Financial Statements.
At August 31, 2015, the asset allocation of the Fund is as follows:
Asset Allocation | % of Net Assets | ||||||
Government & Agency Obligations | 6.0 | ||||||
Repurchase Agreements | 94.0 | ||||||
100.0 | |||||||
Other Assets & Liabilities, Net | 0.0 | ||||||
100.0 |
Joint Repurchase Agreement Treasury Account—At August 31, 2015, certain BofA Funds had undivided interests in the Joint Repurchase Agreement Treasury Account ($3,204,000,000 total principal amount) with a maturity date of September 1, 2015 as follows:
Fund | Principal Amount | Maturity Value | Collateral Value Allocation | ||||||||||||
BofA Cash Reserves | $ | 183,009,000 | $ | 183,009,626 | $ | 186,669,820 | |||||||||
BofA Money Market Reserves | 320,154,000 | 320,155,094 | 326,558,200 | ||||||||||||
BofA Treasury Reserves | 2,694,328,000 | 2,694,337,210 | 2,748,223,987 | ||||||||||||
BofA Government Plus Reserves | 6,509,000 | 6,509,022 | 6,639,203 | ||||||||||||
Total | $ | 3,204,000,000 | $ | 3,204,010,952 | $ | 3,268,091,210 |
The principal amounts of each Fund's interest in the Joint Repurchase Agreement Treasury Account were as follows:
Counterparty | Interest Rate | BofA Cash Reserves | BofA Money Market Reserves | BofA Treasury Reserves | BofA Government Plus Reserves | Total | |||||||||||||||||||||
BNP Paribas Securities Corp. | 0.12 | % | $ | 57,118,914 | $ | 99,923,221 | $ | 840,926,342 | $ | 2,031,523 | $ | 1,000,000,000 | |||||||||||||||
Credit Agricole CIB/US | 0.12 | 69,970,669 | 122,405,946 | 1,030,134,769 | 2,488,616 | 1,225,000,000 | |||||||||||||||||||||
Wells Fargo Securities, LLC | 0.13 | 55,919,417 | 97,824,833 | 823,266,889 | 1,988,861 | 979,000,000 | |||||||||||||||||||||
Total | $ | 183,009,000 | $ | 320,154,000 | $ | 2,694,328,000 | $ | 6,509,000 | $ | 3,204,000,000 |
At August 31, 2015, the Joint Repurchase Agreement Treasury Account was fully collateralized by U.S. Treasury obligations with various maturities to 08/15/2045, market value $3,268,091,210.
See Accompanying Notes to Financial Statements.
5
Statement of Assets and Liabilities – BofA Treasury Reserves
August 31, 2015
($) | |||||||||||
Assets | Investments, at amortized cost approximating value | 603,778,213 | |||||||||
Repurchase agreements, at amortized cost approximating value | 9,454,068,000 | ||||||||||
Total investments, at value | 10,057,846,213 | ||||||||||
Cash | 856 | ||||||||||
Receivable for: | |||||||||||
Fund shares sold | 100 | ||||||||||
Interest | 216,480 | ||||||||||
Trustees' deferred compensation plan | 17,919 | ||||||||||
Prepaid expenses | 81,266 | ||||||||||
Total Assets | 10,058,162,834 | ||||||||||
Liabilities | Expense reimbursement due to investment advisor | 70,513 | |||||||||
Payable for: | |||||||||||
Distributions | 56,213 | ||||||||||
Investment advisory fee | 488,610 | ||||||||||
Administration fee | 617,113 | ||||||||||
Pricing and bookkeeping fees | 13,758 | ||||||||||
Transfer agent fee | 5,571 | ||||||||||
Trustees' fees | 8,773 | ||||||||||
Custody fee | 25,916 | ||||||||||
Chief Compliance Officer expenses | 4,072 | ||||||||||
Trustees' deferred compensation plan | 17,919 | ||||||||||
Other liabilities | 112,016 | ||||||||||
Total Liabilities | 1,420,474 | ||||||||||
Net Assets | 10,056,742,360 | ||||||||||
Net Assets Consist of | Paid-in capital | 10,056,782,117 | |||||||||
Overdistributed net investment income | (44,963 | ) | |||||||||
Accumulated net realized gain | 5,206 | ||||||||||
Net Assets | 10,056,742,360 |
See Accompanying Notes to Financial Statements.
6
Statement of Assets and Liabilities (continued) – BofA Treasury Reserves
August 31, 2015
Adviser Class Shares | Net assets | $ | 2,819,126,878 | ||||||||
Shares outstanding | 2,819,120,027 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Capital Class Shares | Net assets | $ | 5,528,483,903 | ||||||||
Shares outstanding | 5,528,442,774 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Daily Class Shares | Net assets | $ | 195,366,697 | ||||||||
Shares outstanding | 195,366,268 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Institutional Capital Shares | Net assets | $ | 193,658,560 | ||||||||
Shares outstanding | 193,658,384 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Institutional Class Shares | Net assets | $ | 615,188,659 | ||||||||
Shares outstanding | 615,187,583 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Investor Class Shares | Net assets | $ | 5,090,889 | ||||||||
Shares outstanding | 5,090,880 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Investor II Class Shares | Net assets | $ | 91,371,050 | ||||||||
Shares outstanding | 91,370,809 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Liquidity Class Shares | Net assets | $ | 25,862,463 | ||||||||
Shares outstanding | 25,862,403 | ||||||||||
Net asset value per share | $ | 1.00 | |||||||||
Trust Class Shares | Net assets | $ | 582,593,261 | ||||||||
Shares outstanding | 582,592,353 | ||||||||||
Net asset value per share | $ | 1.00 |
See Accompanying Notes to Financial Statements.
7
Statement of Operations – BofA Treasury Reserves
For the Year Ended August 31, 2015
($) | |||||||||||
Investment Income | Interest | 8,149,287 | |||||||||
Expenses | Investment advisory fee | 16,373,379 | |||||||||
Administration fee | 10,775,586 | ||||||||||
Distribution fee: | |||||||||||
Daily Class Shares | 2,016,827 | ||||||||||
Investor Class Shares | 5,207 | ||||||||||
Investor II Class Shares | 76,772 | ||||||||||
Service fee: | |||||||||||
Adviser Class Shares | 8,387,362 | ||||||||||
Daily Class Shares | 1,440,591 | ||||||||||
Investor Class Shares | 13,018 | ||||||||||
Investor II Class Shares | 191,929 | ||||||||||
Liquidity Class Shares | 102,036 | ||||||||||
Shareholder administration fee: | |||||||||||
Institutional Class Shares | 155,792 | ||||||||||
Investor II Class Shares | 76,772 | ||||||||||
Trust Class Shares | 541,881 | ||||||||||
Transfer agent fee | 152,074 | ||||||||||
Pricing and bookkeeping fees | 153,099 | ||||||||||
Trustees' fees | 95,445 | ||||||||||
Custody fee | 195,574 | ||||||||||
Chief Compliance Officer expenses | 24,453 | ||||||||||
Other expenses | 719,525 | ||||||||||
Total Expenses | 41,497,322 | ||||||||||
Fees waived or expenses reimbursed by investment advisor and/or administrator | (21,444,782 | ) | |||||||||
Fees waived by distributor: | |||||||||||
Adviser Class Shares | (8,378,196 | ) | |||||||||
Daily Class Shares | (3,456,903 | ) | |||||||||
Institutional Class Shares | (153,938 | ) | |||||||||
Investor Class Shares | (18,226 | ) | |||||||||
Investor II Class Shares | (345,127 | ) | |||||||||
Liquidity Class Shares | (101,971 | ) | |||||||||
Trust Class Shares | (540,990 | ) | |||||||||
Net Expenses | 7,057,189 | ||||||||||
Net Investment Income | 1,092,098 | ||||||||||
Net realized gain on investments | 5,289 | ||||||||||
Net Increase Resulting from Operations | 1,097,387 |
See Accompanying Notes to Financial Statements.
8
Statement of Changes in Net Assets – BofA Treasury Reserves
Year Ended August 31, | |||||||||||||||
Increase (Decrease) in Net Assets | 2015 ($) | 2014 ($) | |||||||||||||
Operations | Net investment income | 1,092,098 | 859,840 | ||||||||||||
Net realized gain on investments | 5,289 | 42,374 | |||||||||||||
Net increase resulting from operations | 1,097,387 | 902,214 | |||||||||||||
Distributions to Shareholders | From net investment income: | ||||||||||||||
Adviser Class Shares | (335,493 | ) | (226,978 | ) | |||||||||||
Capital Class Shares | (579,347 | ) | (514,372 | ) | |||||||||||
Daily Class Shares | (57,623 | ) | (17,207 | ) | |||||||||||
Institutional Capital Shares | (13,675 | ) | (1,645 | ) | |||||||||||
Institutional Class Shares | (38,948 | ) | (36,441 | ) | |||||||||||
Investor Class Shares | (521 | ) | (651 | ) | |||||||||||
Investor II Class Shares | (7,677 | ) | (9,012 | ) | |||||||||||
Liquidity Class Shares | (4,081 | ) | (6,293 | ) | |||||||||||
Trust Class Shares | (54,188 | ) | (54,045 | ) | |||||||||||
From net realized gains: | |||||||||||||||
Adviser Class Shares | (14,871 | ) | (2,229 | ) | |||||||||||
Capital Class Shares | (13,819 | ) | (4,264 | ) | |||||||||||
Daily Class Shares | (2,331 | ) | (98 | ) | |||||||||||
Institutional Capital Shares | (78 | ) | (5 | ) | |||||||||||
Institutional Class Shares | (971 | ) | (320 | ) | |||||||||||
Investor Class Shares | (19 | ) | (5 | ) | |||||||||||
Investor II Class Shares | (242 | ) | (105 | ) | |||||||||||
Liquidity Class Shares | (220 | ) | (73 | ) | |||||||||||
Trust Class Shares | (2,164 | ) | (569 | ) | |||||||||||
Total distributions to shareholders | (1,126,268 | ) | (874,312 | ) | |||||||||||
Net Capital Stock Transactions | (1,532,714,521 | ) | 2,003,723,694 | ||||||||||||
Total increase (decrease) in net assets | (1,532,743,402 | ) | 2,003,751,596 | ||||||||||||
Net Assets | Beginning of period | 11,589,485,762 | 9,585,734,166 | ||||||||||||
End of period | 10,056,742,360 | 11,589,485,762 | |||||||||||||
Overdistributed net investment income at end of period | (44,963 | ) | (45,508 | ) |
See Accompanying Notes to Financial Statements.
9
Statement of Changes in Net Assets (continued) – BofA Treasury Reserves
Capital Stock Activity | |||||||||||||||||||
Year Ended August 31, | |||||||||||||||||||
2015 | 2014 | ||||||||||||||||||
Shares | Dollars ($) | Shares | Dollars ($) | ||||||||||||||||
Adviser Class Shares | |||||||||||||||||||
Subscriptions | 20,611,561,052 | 20,611,561,052 | 15,744,594,758 | 15,744,594,758 | |||||||||||||||
Distributions reinvested | 4,963 | 4,963 | 6,506 | 6,506 | |||||||||||||||
Redemptions | (21,240,263,838 | ) | (21,240,263,838 | ) | (14,341,734,314 | ) | (14,341,734,314 | ) | |||||||||||
Net increase (decrease) | (628,697,823 | ) | (628,697,823 | ) | 1,402,866,950 | 1,402,866,950 | |||||||||||||
Capital Class Shares | |||||||||||||||||||
Subscriptions | 56,415,069,558 | 56,415,069,558 | 30,817,042,917 | 30,817,042,917 | |||||||||||||||
Distributions reinvested | 391,748 | 391,748 | 336,310 | 336,310 | |||||||||||||||
Redemptions | (56,814,821,116 | ) | (56,814,821,116 | ) | (31,327,255,707 | ) | (31,327,255,707 | ) | |||||||||||
Net decrease | (399,359,810 | ) | (399,359,810 | ) | (509,876,480 | ) | (509,876,480 | ) | |||||||||||
Daily Class Shares | |||||||||||||||||||
Subscriptions | 192,093,979 | 192,093,979 | 1,051,532,429 | 1,051,532,429 | |||||||||||||||
Distributions reinvested | 2 | 2 | 127 | 127 | |||||||||||||||
Redemptions | (1,098,411,218 | ) | (1,098,411,218 | ) | (80,092,350 | ) | (80,092,350 | ) | |||||||||||
Net increase (decrease) | (906,317,237 | ) | (906,317,237 | ) | 971,440,206 | 971,440,206 | |||||||||||||
Institutional Capital Shares | |||||||||||||||||||
Subscriptions | 963,989,709 | 963,989,709 | 165,410,171 | 165,410,171 | |||||||||||||||
Distributions reinvested | 1 | 1 | 7 | 7 | |||||||||||||||
Redemptions | (848,073,605 | ) | (848,073,605 | ) | (91,815,612 | ) | (91,815,612 | ) | |||||||||||
Net increase | 115,916,105 | 115,916,105 | 73,594,566 | 73,594,566 | |||||||||||||||
Institutional Class Shares | |||||||||||||||||||
Subscriptions | 1,587,744,230 | 1,587,744,230 | 813,570,077 | 813,570,077 | |||||||||||||||
Distributions reinvested | 35,415 | 35,415 | 32,364 | 32,364 | |||||||||||||||
Redemptions | (1,361,021,046 | ) | (1,361,021,046 | ) | (766,231,723 | ) | (766,231,723 | ) | |||||||||||
Net increase | 226,758,599 | 226,758,599 | 47,370,718 | 47,370,718 | |||||||||||||||
Investor Class Shares | |||||||||||||||||||
Subscriptions | 6,190,782 | 6,190,782 | 7,547,193 | 7,547,193 | |||||||||||||||
Distributions reinvested | 149 | 149 | 135 | 135 | |||||||||||||||
Redemptions | (6,463,213 | ) | (6,463,213 | ) | (7,765,039 | ) | (7,765,039 | ) | |||||||||||
Net decrease | (272,282 | ) | (272,282 | ) | (217,711 | ) | (217,711 | ) | |||||||||||
Investor II Class Shares | |||||||||||||||||||
Subscriptions | 121,488,800 | 121,488,800 | 229,908,300 | 229,908,300 | |||||||||||||||
Distributions reinvested | 58 | 58 | 78 | 78 | |||||||||||||||
Redemptions | (118,894,612 | ) | (118,894,612 | ) | (238,363,859 | ) | (238,363,859 | ) | |||||||||||
Net increase (decrease) | 2,594,246 | 2,594,246 | (8,455,481 | ) | (8,455,481 | ) | |||||||||||||
Liquidity Class Shares | |||||||||||||||||||
Subscriptions | 12,578,891 | 12,578,891 | 22,853,394 | 22,853,394 | |||||||||||||||
Distributions reinvested | 4,255 | 4,255 | 6,366 | 6,366 | |||||||||||||||
Redemptions | (55,601,613 | ) | (55,601,613 | ) | (16,167,533 | ) | (16,167,533 | ) | |||||||||||
Net increase (decrease) | (43,018,467 | ) | (43,018,467 | ) | 6,692,227 | 6,692,227 | |||||||||||||
Trust Class Shares | |||||||||||||||||||
Subscriptions | 1,374,032,180 | 1,374,032,180 | 833,075,172 | 833,075,172 | |||||||||||||||
Redemptions | (1,274,350,032 | ) | (1,274,350,032 | ) | (812,766,473 | ) | (812,766,473 | ) | |||||||||||
Net increase | 99,682,148 | 99,682,148 | 20,308,699 | 20,308,699 |
See Accompanying Notes to Financial Statements.
10
Financial Highlights – BofA Treasury Reserves
Selected data for a share outstanding throughout each period is as follows:
Year Ended August 31, | |||||||||||||||||||||||
Adviser Class Shares | 2015 | 2014 | 2013 | 2012 | 2011 | ||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||
Net investment income | — | (a) | — | (a) | — | (a) | — | (a) | — | (a) | |||||||||||||
Net realized gain (loss) on investments | — | (a) | — | (a) | — | (a) | — | — | |||||||||||||||
Total from investment operations | — | (a) | — | (a) | — | (a) | — | (a) | — | (a) | |||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||
From net investment income | — | (a) | — | (a) | — | (a) | — | (a) | — | (a) | |||||||||||||
From net realized gains | — | (a) | — | (a) | — | — | (a) | — | |||||||||||||||
Total distributions to shareholders | — | (a) | — | (a) | — | (a) | — | (a) | — | (a) | |||||||||||||
Increase from Contribution from Advisor | — | — | — | — | — | (a) | |||||||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Total return (b)(c) | 0.01 | % | 0.01 | % | 0.01 | % | 0.01 | % | 0.00 | %(d) | |||||||||||||
Ratios to Average Net Assets/Supplemental Data: | |||||||||||||||||||||||
Gross expenses | 0.51 | % | 0.51 | % | 0.51 | % | 0.51 | % | 0.51 | % | |||||||||||||
Net expenses | 0.06 | %(e) | 0.06 | % | 0.12 | %(f) | 0.11 | %(f) | 0.16 | %(f) | |||||||||||||
Waiver/Reimbursement | 0.45 | % | 0.45 | % | 0.39 | % | 0.40 | % | 0.35 | % | |||||||||||||
Net investment income | 0.01 | % | 0.01 | % | 0.01 | %(f) | — | %(f)(g) | — | %(f)(g) | |||||||||||||
Net assets, end of period (000s) | $ | 2,819,127 | $ | 3,447,841 | $ | 2,044,961 | $ | 1,912,565 | $ | 2,933,795 |
Past performance is no guarantee of future results.
(a) Rounds to less than $0.001 per share.
(b) Total return at net asset value assuming all distributions reinvested.
(c) 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.
(d) The Fund received a capital contribution from the investment advisor which had an impact of less than 0.01% on total return.
(e) 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.
(f) The benefits derived from expense reductions had an impact of less than 0.01%.
(g) Rounds to 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:
Year Ended August 31, | |||||||||||||||||||||||
Capital Class Shares | 2015 | 2014 | 2013 | 2012 | 2011 | ||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||
Net investment income | — | (a) | — | (a) | — | (a) | — | (a) | — | (a) | |||||||||||||
Net realized gain (loss) on investments | — | (a) | — | (a) | — | (a) | — | — | |||||||||||||||
Total from investment operations | — | (a) | — | (a) | — | (a) | — | (a) | — | (a) | |||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||
From net investment income | — | (a) | — | (a) | — | (a) | — | (a) | — | (a) | |||||||||||||
From net realized gains | — | (a) | — | (a) | — | — | (a) | — | |||||||||||||||
Total distributions to shareholders | — | (a) | — | (a) | — | (a) | — | (a) | — | (a) | |||||||||||||
Increase from Contribution from Advisor | — | — | — | — | — | (a) | |||||||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Total return (b)(c) | 0.01 | % | 0.01 | % | 0.01 | % | 0.01 | % | 0.01 | %(d) | |||||||||||||
Ratios to Average Net Assets/Supplemental Data: | |||||||||||||||||||||||
Gross expenses | 0.26 | % | 0.26 | % | 0.26 | % | 0.26 | % | 0.26 | % | |||||||||||||
Net expenses | 0.07 | % | 0.06 | % | 0.12 | %(e) | 0.11 | %(e) | 0.14 | %(e) | |||||||||||||
Waiver/Reimbursement | 0.19 | % | 0.20 | % | 0.14 | % | 0.15 | % | 0.12 | % | |||||||||||||
Net investment income | 0.01 | % | 0.01 | % | 0.01 | %(e) | — | %(e)(f) | 0.01 | %(e) | |||||||||||||
Net assets, end of period (000s) | $ | 5,528,484 | $ | 5,927,844 | $ | 6,437,715 | $ | 5,462,494 | $ | 4,455,824 |
Past performance is no guarantee of future results.
(a) Rounds to less than $0.001 per share.
(b) Total return at net asset value assuming all distributions reinvested.
(c) 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.
(d) The Fund received a capital contribution from the investment advisor which had an impact of less than 0.01% on total return.
(e) The benefits derived from expense reductions had an impact of less than 0.01%.
(f) Rounds to 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:
Year Ended August 31, | |||||||||||||||||||||||
Daily Class Shares | 2015 | 2014 | 2013 | 2012 | 2011 | ||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||
Net investment income | — | (a) | — | (a) | — | (a) | — | (a) | — | (a) | |||||||||||||
Net realized gain (loss) on investments | — | (a) | — | (a) | — | (a) | — | — | |||||||||||||||
Total from investment operations | — | (a) | — | (a) | — | (a) | — | (a) | — | (a) | |||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||
From net investment income | — | (a) | — | (a) | — | (a) | — | (a) | — | ||||||||||||||
From net realized gains | — | (a) | — | (a) | — | — | (a) | — | |||||||||||||||
Total distributions to shareholders | — | (a) | — | (a) | — | (a) | — | (a) | — | ||||||||||||||
Increase from Contribution from Advisor | — | — | — | — | — | (a) | |||||||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Total return (b)(c) | 0.01 | % | 0.01 | % | 0.01 | % | 0.01 | % | 0.00 | %(d) | |||||||||||||
Ratios to Average Net Assets/Supplemental Data: | |||||||||||||||||||||||
Gross expenses | 0.86 | % | 0.86 | % | 0.86 | % | 0.86 | % | 0.86 | % | |||||||||||||
Net expenses | 0.06 | %(e) | 0.06 | % | 0.12 | %(f) | 0.11 | %(f) | 0.17 | %(f) | |||||||||||||
Waiver/Reimbursement | 0.80 | % | 0.80 | % | 0.74 | % | 0.75 | % | 0.69 | % | |||||||||||||
Net investment income | 0.01 | % | 0.01 | % | 0.01 | %(f) | — | %(f)(g) | — | %(f)(g) | |||||||||||||
Net assets, end of period (000s) | $ | 195,367 | $ | 1,101,691 | $ | 130,244 | $ | 84,605 | $ | 143,382 |
Past performance is no guarantee of future results.
(a) Rounds to less than $0.001 per share.
(b) Total return at net asset value assuming all distributions reinvested.
(c) 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.
(d) The Fund received a capital contribution from the investment advisor which had an impact of less than 0.01% on total return.
(e) 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.
(f) The benefits derived from expense reductions had an impact of less than 0.01%.
(g) Rounds to less than 0.01%.
See Accompanying Notes to Financial Statements.
13
Financial Highlights – BofA Treasury Reserves
Selected data for a share outstanding throughout each period is as follows:
Year Ended August 31, | |||||||||||||||||||
Institutional Capital Shares | 2015 | 2014 | 2013 | 2012(a) | |||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||
Income from Investment Operations: | |||||||||||||||||||
Net investment income | — | (b) | — | (b) | — | (b) | — | (b) | |||||||||||
Net realized gain (loss) on investments | — | (b) | — | (b) | — | (b) | — | ||||||||||||
Total from investment operations | — | (b) | — | (b) | — | (b) | — | (b) | |||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||
From net investment income | — | (b) | — | (b) | — | (b) | — | (b) | |||||||||||
From net realized gains | — | (b) | — | (b) | — | — | (b) | ||||||||||||
Total distributions to shareholders | — | (b) | — | (b) | — | (b) | — | (b) | |||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||
Total return (c)(d) | 0.01 | % | 0.01 | % | 0.01 | % | 0.00 | %(e)(f) | |||||||||||
Ratios to Average Net Assets/Supplemental Data: | |||||||||||||||||||
Gross expenses | 0.26 | % | 0.26 | % | 0.27 | % | 0.27 | %(g) | |||||||||||
Net expenses | 0.07 | % | 0.06 | % | 0.13 | %(h)(i) | 0.14 | %(g)(i) | |||||||||||
Waiver/Reimbursement | 0.19 | % | 0.20 | % | 0.14 | % | 0.13 | %(g) | |||||||||||
Net investment income | 0.01 | % | 0.01 | % | 0.01 | %(i) | 0.01 | %(g)(i) | |||||||||||
Net assets, end of period (000s) | $ | 193,659 | $ | 77,743 | $ | 4,148 | $ | 412 |
Past performance is no guarantee of future results.
(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) Annualized.
(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.
(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 Treasury Reserves
Selected data for a share outstanding throughout each period is as follows:
Year Ended August 31, | |||||||||||||||||||||||
Institutional Class Shares | 2015 | 2014 | 2013 | 2012 | 2011 | ||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||
Net investment income | — | (a) | — | (a) | — | (a) | — | (a) | — | (a) | |||||||||||||
Net realized gain (loss) on investments | — | (a) | — | (a) | — | (a) | — | — | |||||||||||||||
Total from investment operations | — | (a) | — | (a) | — | (a) | — | (a) | — | (a) | |||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||
From net investment income | — | (a) | — | (a) | — | (a) | — | (a) | — | (a) | |||||||||||||
From net realized gains | — | (a) | — | (a) | — | — | (a) | — | |||||||||||||||
Total distributions to shareholders | — | (a) | — | (a) | — | (a) | — | (a) | — | (a) | |||||||||||||
Increase from Contribution from Advisor | — | — | — | — | — | (a) | |||||||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Total return (b)(c) | 0.01 | % | 0.01 | % | 0.01 | % | 0.01 | % | 0.00 | %(d) | |||||||||||||
Ratios to Average Net Assets/Supplemental Data: | |||||||||||||||||||||||
Gross expenses | 0.30 | % | 0.30 | % | 0.30 | % | 0.30 | % | 0.30 | % | |||||||||||||
Net expenses | 0.07 | % | 0.06 | % | 0.12 | %(e) | 0.11 | %(e) | 0.16 | %(e) | |||||||||||||
Waiver/Reimbursement | 0.23 | % | 0.24 | % | 0.18 | % | 0.19 | % | 0.14 | % | |||||||||||||
Net investment income | 0.01 | % | 0.01 | % | 0.01 | %(e) | — | %(e)(f) | — | %(e)(f) | |||||||||||||
Net assets, end of period (000s) | $ | 615,189 | $ | 388,432 | $ | 341,060 | $ | 266,788 | $ | 333,703 |
Past performance is no guarantee of future results.
(a) Rounds to less than $0.001 per share.
(b) Total return at net asset value assuming all distributions reinvested.
(c) 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.
(d) The Fund received a capital contribution from the investment advisor which had an impact of less than 0.01% on total return.
(e) The benefits derived from expense reductions had an impact of less than 0.01%.
(f) Rounds to less than 0.01%.
See Accompanying Notes to Financial Statements.
15
Financial Highlights – BofA Treasury Reserves
Selected data for a share outstanding throughout each period is as follows:
Year Ended August 31, | |||||||||||||||||||||||
Investor Class Shares | 2015 | 2014 | 2013 | 2012 | 2011 | ||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||
Net investment income | — | (a) | — | (a) | — | (a) | — | (a) | — | (a) | |||||||||||||
Net realized gain (loss) on investments | — | (a) | — | (a) | — | (a) | — | — | |||||||||||||||
Total from investment operations | — | (a) | — | (a) | — | (a) | — | (a) | — | (a) | |||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||
From net investment income | — | (a) | — | (a) | — | (a) | — | (a) | — | ||||||||||||||
From net realized gains | — | (a) | — | (a) | — | — | (a) | — | |||||||||||||||
Total distributions to shareholders | — | (a) | — | (a) | — | (a) | — | (a) | — | ||||||||||||||
Increase from Contribution from Advisor | — | — | — | — | — | (a) | |||||||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Total return (b)(c) | 0.01 | % | 0.01 | % | 0.01 | % | 0.01 | % | 0.00 | %(d) | |||||||||||||
Ratios to Average Net Assets/Supplemental Data: | |||||||||||||||||||||||
Gross expenses | 0.61 | % | 0.61 | % | 0.61 | % | 0.61 | % | 0.61 | % | |||||||||||||
Net expenses | 0.06 | %(e) | 0.06 | % | 0.12 | %(f) | 0.11 | %(f) | 0.17 | %(f) | |||||||||||||
Waiver/Reimbursement | 0.55 | % | 0.55 | % | 0.49 | % | 0.50 | % | 0.44 | % | |||||||||||||
Net investment income | 0.01 | % | 0.01 | % | 0.01 | %(f) | — | %(f)(g) | — | %(f)(g) | |||||||||||||
Net assets, end of period (000s) | $ | 5,091 | $ | 5,363 | $ | 5,581 | $ | 5,580 | $ | 7,743 |
Past performance is no guarantee of future results.
(a) Rounds to less than $0.001 per share.
(b) Total return at net asset value assuming all distributions reinvested.
(c) 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.
(d) The Fund received a capital contribution from the investment advisor which had an impact of less than 0.01% on total return.
(e) 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.
(f) The benefits derived from expense reductions had an impact of less than 0.01%.
(g) Rounds to 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:
Year Ended August 31, | |||||||||||||||||||||||
Investor II Class Shares | 2015 | 2014 | 2013 | 2012(a) | 2011 | ||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||
Net investment income | — | (b) | — | (b) | — | (b) | — | (b) | — | (b) | |||||||||||||
Net realized gain (loss) on investments | — | (b) | — | (b) | — | (b) | — | — | |||||||||||||||
Total from investment operations | — | (b) | — | (b) | — | (b) | — | (b) | — | (b) | |||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||
From net investment income | — | (b) | — | (b) | — | (b) | — | (b) | — | ||||||||||||||
From net realized gains | — | (b) | — | (b) | — | — | (b) | — | |||||||||||||||
Total distributions to shareholders | — | (b) | — | (b) | — | (b) | — | (b) | — | ||||||||||||||
Increase from Contribution from Advisor | — | — | — | — | — | (b) | |||||||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Total return (c)(d) | 0.01 | % | 0.01 | % | 0.01 | % | 0.01 | % | 0.00 | %(e) | |||||||||||||
Ratios to Average Net Assets/Supplemental Data: | |||||||||||||||||||||||
Gross expenses | 0.71 | % | 0.71 | % | 0.71 | % | 0.71 | % | 0.71 | % | |||||||||||||
Net expenses | 0.06 | %(f) | 0.06 | % | 0.12 | %(g) | 0.11 | %(g) | 0.16 | %(g) | |||||||||||||
Waiver/Reimbursement | 0.65 | % | 0.65 | % | 0.59 | % | 0.60 | % | 0.55 | % | |||||||||||||
Net investment income | 0.01 | % | 0.01 | % | 0.01 | %(g) | — | %(g)(h) | — | %(g)(h) | |||||||||||||
Net assets, end of period (000s) | $ | 91,371 | $ | 88,777 | $ | 97,233 | $ | 103,034 | $ | 107,653 |
Past performance is no guarantee of future results.
(a) After the close of business on September 30, 2011, Class A Shares were renamed Investor II Class Shares.
(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) The Fund received a capital contribution from the investment advisor which had an impact of less than 0.01% on total return.
(f) 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.
(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.
17
Financial Highlights – BofA Treasury Reserves
Selected data for a share outstanding throughout each period is as follows:
Year Ended August 31, | |||||||||||||||||||||||
Liquidity Class Shares | 2015 | 2014 | 2013 | 2012 | 2011 | ||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||
Net investment income | — | (a) | — | (a) | — | (a) | — | (a) | — | (a) | |||||||||||||
Net realized gain (loss) on investments | — | (a) | — | (a) | — | (a) | — | — | |||||||||||||||
Total from investment operations | — | (a) | — | (a) | — | (a) | — | (a) | — | (a) | |||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||
From net investment income | — | (a) | — | (a) | — | (a) | — | (a) | — | ||||||||||||||
From net realized gains | — | (a) | — | (a) | — | — | (a) | — | |||||||||||||||
Total distributions to shareholders | — | (a) | — | (a) | — | (a) | — | (a) | — | ||||||||||||||
Increase from Contribution from Advisor | — | — | — | — | — | (a) | |||||||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Total return (b)(c) | 0.01 | % | 0.01 | % | 0.01 | % | 0.01 | % | 0.00 | %(d) | |||||||||||||
Ratios to Average Net Assets/Supplemental Data: | |||||||||||||||||||||||
Gross expenses | 0.51 | % | 0.51 | % | 0.52 | % | 0.52 | % | 0.51 | % | |||||||||||||
Net expenses | 0.06 | %(e) | 0.06 | % | 0.13 | %(e)(f) | 0.11 | %(f) | 0.16 | %(f) | |||||||||||||
Waiver/Reimbursement | 0.45 | % | 0.45 | % | 0.39 | % | 0.41 | % | 0.35 | % | |||||||||||||
Net investment income | 0.01 | % | 0.01 | % | 0.01 | %(f) | — | %(f)(g) | — | %(f)(g) | |||||||||||||
Net assets, end of period (000s) | $ | 25,862 | $ | 68,881 | $ | 62,189 | $ | 71,919 | $ | 138,535 |
Past performance is no guarantee of future results.
(a) Rounds to less than $0.001 per share.
(b) Total return at net asset value assuming all distributions reinvested.
(c) 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.
(d) The Fund received a capital contribution from the investment advisor which had an impact of less than 0.01% on total return.
(e) 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.
(f) The benefits derived from expense reductions had an impact of less than 0.01%.
(g) Rounds to less than 0.01%.
See Accompanying Notes to Financial Statements.
18
Financial Highlights – BofA Treasury Reserves
Selected data for a share outstanding throughout each period is as follows:
Year Ended August 31, | |||||||||||||||||||||||
Trust Class Shares | 2015 | 2014 | 2013 | 2012 | 2011 | ||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||
Net investment income | — | (a) | — | (a) | — | (a) | — | (a) | — | (a) | |||||||||||||
Net realized gain (loss) on investments | — | (a) | — | (a) | — | (a) | — | — | |||||||||||||||
Total from investment operations | — | (a) | — | (a) | — | (a) | — | (a) | — | (a) | |||||||||||||
Less Distributions to Shareholders: | |||||||||||||||||||||||
From net investment income | — | (a) | — | (a) | — | (a) | — | (a) | — | ||||||||||||||
From net realized gains | — | (a) | — | (a) | — | — | (a) | — | |||||||||||||||
Total distributions to shareholders | — | (a) | — | (a) | — | (a) | — | (a) | — | ||||||||||||||
Increase from Contribution from Advisor | — | — | — | — | — | (a) | |||||||||||||||||
Net Asset Value, End of Period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | |||||||||||||
Total return (b)(c) | 0.01 | % | 0.01 | % | 0.01 | % | 0.01 | % | 0.00 | %(d) | |||||||||||||
Ratios to Average Net Assets/Supplemental Data: | |||||||||||||||||||||||
Gross expenses | 0.36 | % | 0.36 | % | 0.36 | % | 0.36 | % | 0.36 | % | |||||||||||||
Net expenses | 0.06 | %(e) | 0.06 | % | 0.12 | %(f) | 0.11 | %(f) | 0.15 | %(f) | |||||||||||||
Waiver/Reimbursement | 0.30 | % | 0.30 | % | 0.24 | % | 0.25 | % | 0.21 | % | |||||||||||||
Net investment income | 0.01 | % | 0.01 | % | 0.01 | %(f) | — | %(f)(g) | — | %(f)(g) | |||||||||||||
Net assets, end of period (000s) | $ | 582,593 | $ | 482,914 | $ | 462,604 | $ | 444,576 | $ | 478,302 |
Past performance is no guarantee of future results.
(a) Rounds to less than $0.001 per share.
(b) Total return at net asset value assuming all distributions reinvested.
(c) 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.
(d) The Fund received a capital contribution from the investment advisor which had an impact of less than 0.01% on total return.
(e) 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.
(f) The benefits derived from expense reductions had an impact of less than 0.01%.
(g) Rounds to less than 0.01%.
See Accompanying Notes to Financial Statements.
19
Notes to Financial Statements – BofA Treasury Reserves
August 31, 2015
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.
The Fund is an investment company and accordingly follows the investment company accounting and reporting guidance of the Financial Accounting Standards Board (FASB) Accounting Standard Codification Topic 946 Financial Services—Investment Companies.
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 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). These investments may trade in markets that are not considered to be active, but whose values are supported by observable inputs such as U.S. government obligations and agency securities, investment-grade corporate bonds and state, municipal and provincial obligations. For money market funds operating under Rule 2a-7 of the 1940 Act, securities are valued at amortized cost which approximates market value and are considered to be valued using Level 2 inputs.
• Level 3 – Prices determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable or less reliable, unobservable inputs may be used.
20
BofA Treasury Reserves, August 31, 2015
Unobservable inputs may include management's own assumptions about the factors market participants would use in pricing an investment.
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
Security Transactions
Security transactions are accounted for on the trade date. Cost is determined and gains (losses) are based upon the specific identification method for both financial statement and federal income tax purposes.
Repurchase Agreements
The Fund may engage in repurchase agreement transactions with institutions that BofA Advisors, LLC, 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.
The Financial Accounting Standards Board's ("FASB") Accounting Standards Update ("ASU") No. 2011-11 (amended by ASU No. 2013-01): Disclosures about Offsetting Assets and Liabilities ("netting") on the Statement of Assets and Liabilities applies to instruments that are subject to master netting arrangements or similar agreements. The scope of the disclosure requirements is limited to derivative instruments, repurchase agreements and reverse repurchase agreements, and securities borrowing and securities lending transactions. This information is intended to enable users of the Fund's financial statements to evaluate the effect or potential effect of netting arrangements on the Fund's financial position.
A Master Repurchase Agreement ("MRA") governs transactions between a Fund and select counterparties. A MRA contains provisions for, among other things, initiation, income payments, events of default and maintenance of securities for repurchase agreements. A MRA also permits offsetting with collateral to create one single net payment in the event of default or similar events, including the bankruptcy or insolvency of a counterparty.
For financial reporting purposes, the Fund does not offset financial assets and financial liabilities that are subject to master netting arrangements or similar agreements on the Statement of Assets and Liabilities.
If the seller defaults, the Fund could suffer a loss to the extent that the proceeds from the sale of the underlying securities and other collateral held by the Fund are less than the repurchase price and the Fund's costs associated with delay and enforcement of the repurchase agreement. In addition, in the event of default or insolvency of the seller, a court could determine that a Fund's interest in the collateral is not enforceable, resulting in additional losses to the Fund.
At August 31, 2015, the Fund's investments in repurchase agreements were subject to enforceable MRAs. The repurchase agreements on a net basis were as follows:
Repurchase Agreements | |||||||
Total Gross amount presented in Statement of Assets and Liabilities | $ | 9,454,068,000 | |||||
Non-cash Collateral offsetting (1) | $ | (9,454,068,000 | ) | ||||
Net Amount (2) | $ | — |
(1) At August 31, 2015, the value of the collateral exceeded the value of the related repurchase agreements.
(2) Net amount represents the net amount due from the counterparty in the event of a default based on the contractual set-off rights under the agreement.
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
21
BofA Treasury Reserves, August 31, 2015
other expense allocation methodologies determined by the nature of the expense. Expenses directly attributable to the Fund are charged to the Fund. Expenses directly attributable to a specific class of shares are charged to that share class.
Determination of Class Net Asset Value
All income, expenses (other than class-specific expenses, which are charged to that share class, as shown on the Statement of Operations) and realized 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 based on the following methodologies: income and expenses are allocated to each class based on the settled shares method, while realized gains (losses) are allocated based on the relative net assets of each class.
Federal Income Tax Status
The Fund intends to qualify each year as a "regulated investment company" under Subchapter M of the Internal Revenue Code, as amended, and to distribute substantially all of its tax-exempt or taxable income, if any, for its tax year, and as such will not be subject to federal income taxes. In addition, the Fund intends to distribute in each calendar year substantially all of its net investment income, capital gains and certain other amounts, if any, such that the Fund 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 years ended August 31, 2015 and August 31, 2014 were as follows:
August 31, | |||||||||||
Distributions paid from | 2015 | 2014 | |||||||||
Ordinary Income* | $ | 1,126,268 | $ | 874,312 |
* For tax purposes, short-term capital gain distributions, if any, are considered ordinary income distributions.
As of August 31, 2015, the components of distributable earnings on a tax basis were as follows:
Undistributed Tax-Exempt Income | Undistributed Ordinary Income | Undistributed Long-Term Capital Gains | |||||||||
$ | — | $ | 16,456 | $ | — |
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
22
BofA Treasury Reserves, August 31, 2015
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 ("BofA Corp."), 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 | % |
For the year ended August 31, 2015, 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 year ended August 31, 2015, the 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.
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, 2015. There is no guarantee that this expense limitation will continue after such date.
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 (together, 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
23
BofA Treasury Reserves, August 31, 2015
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 the 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.
Distribution and Shareholder Servicing Fees
BofA Distributors, Inc. (the "Distributor"), an affiliate of the Advisor and an indirect, wholly owned subsidiary of BofA Corp., 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 sales support services. The Distributor is entitled to retain some or all fees payable under the Distribution Plan in certain circumstances, including but not limited to, instances when there is no broker of record or when certain qualification standards have not been met by the broker of record. In certain instances, payments will continue to be made pursuant to the Distribution Plan with respect to shares held in classes that are closed to new investors and shares held by specific investors who are not eligible to make additional purchases in a particular share class.
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, 2015 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 the Fund. A substantial portion of the expenses incurred pursuant to these plans is paid to affiliates of the Advisor and the Distributor.
24
BofA Treasury Reserves, August 31, 2015
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, 2015, so that the Fund's ordinary operating expenses (excluding any acquired
fund fees and expenses, 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 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 August 31, 2015, the amounts potentially recoverable pursuant to this arrangement are as follows:
Amount of potential recovery expiring August 31: | Total potential | Amount recovered during the year | |||||||||||||||||
2018 | 2017 | 2016 | recovery | ended 08/31/2015 | |||||||||||||||
$ | 6,652,544 | $ | 5,398,514 | $ | 5,806,647 | $ | 17,857,705 | $ | — |
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%. Pursuant to a September 25, 2015 amendment, an annual administration fee of $25,000 is also accrued and apportioned to each fund participating in the line
25
BofA Treasury Reserves, August 31, 2015
of credit based on the average net assets of the participating funds. Prior to the September 25, 2015 amendment, an annual administration fee of $10,000 was accrued and apportioned to each participating fund under the same terms.
For the year ended August 31, 2015, 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.
Note 9. Money Market Fund Regulatory Matters
On July 23, 2014, the Securities and Exchange Commission voted to amend Rule 2a-7, which governs money market funds (such as the Fund). The majority of these amendments take effect in 2016. The most significant change is a requirement that institutional (i.e. large volume institutions such as banks, trusts, insurance companies, etc.) prime and institutional municipal money market funds move to a floating net asset value. Retail (i.e. a money market mutual fund that has policies and procedures reasonably designed to limit all beneficial owners of the money market fund to natural persons) prime, municipal, government and treasury money market funds will continue to transact at a stable $1.00 share price. In addition, the boards of trustees of non-government money market funds may impose a temporary liquidity fee of up to 2% of the value of a redemption and/or suspend (or "gate") redemptions temporarily should a money market fund's level of weekly liquid assets fall below 30% of its total assets. At this time, the Fund's management is evaluating the implications of the reforms and their impact on the Fund, including potential effects on the Fund's operations and returns.
26
Report of Independent Registered Public Accounting Firm
To the Trustees of BofA Funds Series Trust and Shareholders of BofA Treasury Reserves
In our opinion, the accompanying statement of assets and liabilities, including the investment portfolio, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of BofA Treasury Reserves (the "Fund") (a series of BofA Funds Series Trust) at August 31, 2015, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and the financial highlights for each of the periods indicated, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as "financial statements") are the responsibility of the Fund's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at August 31, 2015 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
Boston, Massachusetts
October 21, 2015
27
Federal Income Tax Information (Unaudited) – BofA Treasury Reserves
The Fund designates the maximum allowable as qualified interest income for nonresident alien shareholders, as provided in the American Jobs Creation Act of 2004.
The Fund will notify shareholders in January 2016 of amounts for use in preparing 2015 income tax returns.
28
Fund Governance
The Trustees serve terms of indefinite duration. The names, addresses and ages of the Trustees and officers of the Funds in the BofA Funds Series Trust, the year each was first elected or appointed to office, their principal business occupations during at least the last five years, the number of Funds overseen by each Trustee and other directorships they hold are shown below. Each officer listed below serves as an officer of each Fund in the BofA Funds Series Trust.
Independent Trustees
Name, Address and Year of Birth, Position with Funds, Year First Elected or Appointed to Office | Principal Occupation(s) During Past Five Years, Number of Funds in BofA Funds Series Trust Overseen by Trustee, Other Directorships Held | ||||||
Harrison M. Bains (Born 1943) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Trustee (since 2011) | Retired. Oversees 11 Funds. Mercer Funds (9 funds); BG Medicine, Inc. (life sciences). | ||||||
Paul Glasserman (Born 1962) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Trustee (since 2011) | Jack R. Anderson Professor of Business—Columbia Business School, since 2000 (Senior Vice Dean, 2004-2008; Professor, 1995-2000); Visiting Scholar—Federal Reserve Bank of New York, from 2008 to 2012; Consultant to the U.S. Treasury, 2011-2014; Independent consultant to financial firms since 1995. Oversees 11 Funds. | ||||||
William A. Hawkins (Born 1942) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Trustee (since 2005)1 | Managing Director—Overton Partners (financial consulting), August 2010 to present. Oversees 11 Funds. Columbia Funds (127 funds). | ||||||
R. Glenn Hilliard (Born 1943) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Trustee (since 2005)1 | Chairman and Chief Executive Officer—Hilliard Group LLC (investing and consulting), from 2003 through current; Non-Executive Director & Chairman—CNO Financial Group, Inc. (formerly Conseco, Inc.) (insurance), September 2003-May 2011. Oversees 11 Funds. Columbia Funds (127 funds). | ||||||
William J. Kelly (Born 1960) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Trustee (since 2011) | Chief Executive Officer—Chartered Alternative Investment Analyst Association, January 2014 to present. Oversees 11 Funds. | ||||||
Debra Perry (Born 1951) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Trustee (since 2011) | Retired. Managing Member—Perry Consulting LLC (advisory firm), from 2008 through 2014. Oversees 11 Funds. Korn/Ferry International (recruiting); Sanford C. Bernstein Fund, Inc. (18 funds); Board Member—PartnerRE (reinsurance). |
1 Includes service as trustees of Columbia Funds Series Trust, the predecessor trust.
The Statement of Additional Information includes additional information about the Trustees of the Funds and is available, without charge, upon request by calling 888-331-0904. (Institutional Investors, please call 800-353-0828.)
29
Fund Governance (continued)
Officers
Name, Address and Year of Birth, Position with Funds, Year First Elected or Appointed to Office | Principal Occupation(s) During Past Five Years | ||||||
Michael J. Pelzar (Born 1968) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 President (since 2010) | President, BofA Global Capital Management Group, LLC since May 2010; Managing Director and Head of Product Management of the Advisor from 2007 to 2010. | ||||||
Kenneth B. Crotty (Born 1961) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Vice President (since 2015) Assistant Treasurer (2014-2015) | Chief Operating Officer, BofA Global Capital Management Group, LLC since August 2013; President KBC Consulting 2012-2013; Global Chief Operating Officer of Mercer Investments and President of Mercer Investments US 2006-2012. | ||||||
Jeffrey R. Coleman (Born 1969) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Senior Vice President, Chief Financial Officer, Chief Accounting Officer (since 2010) and Treasurer (since 2009) | Managing Director of Fund Administration and Transfer Agency Oversight of the Advisor since May 2010; Director of Fund Administration of the Advisor since January 2006. | ||||||
Marina Belaya (Born 1967) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Secretary and Chief Legal Officer (since 2013) | Assistant General Counsel, Director, Bank of America since July 2007. | ||||||
James R. Bordewick (Born 1959) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Senior Vice President and Chief Compliance Officer (since 2010) | Chief Compliance Officer of U.S. Trust, Bank of America Private Wealth Management since 2012; Chief Compliance Officer of the Advisor and Managing Director, Bank of America since May 2010. | ||||||
Barry S. Vallan (Born 1969) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Deputy Treasurer (since 2010) and Controller (since 2006) | Director of Fund Administration of the Advisor since May 2010; Vice President—Fund Treasury of the Advisor since October 2004; Vice President—Fund Administration of the Advisor since May 2002. |
30
Fund Governance (continued)
Officers (continued)
Name, Address and Year of Birth, Position with Funds, Year First Elected or Appointed to Office | Principal Occupation(s) During Past Five Years | ||||||
Patrick Campbell (Born 1957) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Vice President (since 2015) Assistant Treasurer (2010-2015) | Director of Transfer Agency Oversight, BofA Global Capital Management Group, LLC since May 2010. | ||||||
Rana J. Wright (Born 1978) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Assistant Secretary (since 2014) | Assistant General Counsel and Director, Bank of America, and Chief Legal Officer, BofA Global Capital Management Group, LLC, since June 2014; Partner, Reed Smith LLP, 2012 to 2014; Associate, Reed Smith LLP, 2003 to 2011. | ||||||
Nitin Mehra (Born 1977) | |||||||
c/o BofA Advisors, LLC 100 Federal Street Boston, MA 02110 Vice President (since 2015) Assistant Treasurer (2013-2015) | Managing Director and Head of Strategy and Product at BofA Global Capital Management Group, LLC since May 2011; Managing Director of Strategy and Product at BofA Global Capital Management Group, LLC from 2010-2011; Director of Product Strategy and Development of the Advisor from 2008-2010. |
31
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Important Information About This Report
The funds mail one shareholder report to each shareholder address. If you would like more than one report, please call shareholder services at 888.331.0904 (Institutional Investors: 800.353.0828) and additional reports will be sent to you. This report has been prepared for shareholders of the BofA Treasury Reserves.
A description of the policies and procedures that each fund uses to determine how to vote proxies and a copy of each fund's voting records are available (i) at www.bofacapital.com, (ii) on the Securities and Exchange Commission's website at www.sec.gov, and (iii) without charge, upon request, by calling 888.331.0904 (Institutional Investors: 800.353.0828). Information regarding how each fund voted proxies relating to portfolio securities during the 12-month period ended 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.
An investment in money market mutual funds is not insured or guaranteed by Bank of America, N.A. or its affiliates, or by the Federal Deposit Insurance Corporation or any other government agency. Although money market mutual funds seek to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in money market mutual funds.
BofA® 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
BofA Global Capital Management
100 Federal Street
Boston, MA 02110
Questions or comments regarding your account or investment in the Funds should be directed to:
Boston Financial Data Services
P.O. Box 8723
Boston, MA 02266-8723
Retail Investors: 888.331.0904
Institutional Investors: 800.353.0828
BofA Treasury Reserves
Annual Report, August 31, 2015
© 2015 Bank of America Corporation. All rights reserved.
BofA Distributors, Inc.
100 Federal Street, Boston, MA 02110
888.331.0904 (Institutional Investors: 800.353.0828) www.bofacapital.com
AR-TSYR-1015
Item 2. Code of Ethics.
(a) BofA Funds Series Trust (the “Registrant”) has adopted a code of ethics that applies to the Registrant’s principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, regardless of whether these individuals are employed by the Registrant or a third party.
(c) During the period covered by this report, there were not any amendments to a provision of the code of ethics adopted in 2(a) above.
(d) During the period covered by this report, there were no waivers, including any implicit waivers, from a provision of the code of ethics described in 2(a) above that relates to one or more of the items set forth in paragraph (b) of this item’s instructions.
Item 3. Audit Committee Financial Expert.
The Registrant’s Board of Trustees (the “Board”) has determined that Messrs. Harrison M. Bains, William A. Hawkins and William J. Kelly, each qualify as an audit committee financial expert serving on the Audit Committee. Messrs. Harrison M. Bains, William A. Hawkins and William J. Kelly are each an independent trustee, as defined in paragraph (a)(2) of this item’s instructions.
Item 4. Principal Accountant Fees and Services.
Fee information below is disclosed for the series of the Registrant whose report to stockholders is included in this annual filing.
(a) Audit Fees. Aggregate Audit Fees billed by the principal accountant for professional service rendered during the fiscal years ended August 31, 2015 and August 31, 2014 were approximately as follows:
2015 |
| 2014 |
| ||
$ | 510,000 |
| $ | 499,000 |
|
Audit Fees include amounts related to the audit of the Registrant’s annual financial statements or services that are normally provided by the principal accountant in connection with statutory and regulatory filings or engagements for those fiscal years.
(b) Audit-Related Fees. Aggregate Audit-Related Fees billed to the Registrant by the principal accountant for professional services rendered during the fiscal years ended August 31, 2015 and August 31, 2014 were approximately as follows:
2015 |
| 2014 |
| ||
$ | 53,350 |
| $ | 53,350 |
|
Audit-Related Fees include amounts for assurance and related services by the principal accountant that are reasonably related to the performance of the audit of the Registrant’s financial statements and are not reported in Audit Fees above. In both fiscal years 2015 and 2014, Audit-Related Fees consist of agreed-upon procedures performed for semi-annual shareholder reports.
During the fiscal years ended August 31, 2015 and August 31, 2014, there were no Audit-Related Fees billed by the Registrant’s principal accountant to the Registrant’s investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser) and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the Registrant (“Adviser Affiliates”) for an engagement that related directly to the operations and financial reporting of the Registrant.
(c) Tax Fees. Aggregate Tax Fees billed by the principal accountant to the Registrant for professional services rendered during the fiscal years ended August 31, 2015 and August 31, 2014 are approximately as follows:
2015 |
| 2014 |
| ||
$ | 54,750 |
| $ | 73,545 |
|
Tax Fees include amounts for the review of annual tax returns, the review of required shareholder distribution calculations and typically include amounts for professional services by the principal accountant for tax compliance, tax advice and tax planning. In addition, Tax Fees include tax services for Compliance with IRC Section 851(b)3 and IRC Section 852(b)5, as applicable.
During the fiscal years ended August 31, 2015 and August 31, 2014, there were no Tax Fees billed by the Registrant’s principal accountant to the Registrant’s investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser) and Adviser Affiliates for an engagement that related directly to the operations and financial reporting of the Registrant.
(d) All Other Fees. Aggregate All Other Fees billed by the principal accountant to the Registrant for professional services rendered during the fiscal years ended August 31, 2015 and August 31, 2014 are approximately as follows:
2015 |
| 2014 |
| ||
$ | 61,308 |
| $ | 0 |
|
All Other Fees include amounts for products and services provided by the principal accountant, other than the services reported in paragraphs (a) through (c) above. For 2015, All Other Fees consist of fees billed by the Registrants principal accountant for an assessment of the Registrants BSA/AML and OFAC Compliance Program.
Aggregate All Other Fees billed by the Registrant’s principal accountant to the Registrant’s investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser) and Adviser Affiliates for an engagement that related directly to the operations and financial reporting of the Registrant during the fiscal years ended August 31, 2015 and August 31, 2014 are approximately as follows:
2015 |
| 2014 |
| ||
$ | 267,262 |
| $ | 257,000 |
|
For the fiscal years ended August 31, 2015 and August 31, 2014, Aggregate All Other Fees consist of fees billed for an internal control examination of the Registrant’s investment advisor and professional services rendered in connection with an SIPC review of the distributor. In addition to the above mentioned fees, for fiscal year end August 31, 2015, there was an additional fee for a review of the Advisor’s 15c3-3 exemption.
(e)(1) Audit Committee Pre-Approval Policies and Procedures
The Registrant’s Audit Committee is required to pre-approve the engagement of the Registrant’s independent accountants to provide audit and non-audit services to the Registrant and non-audit services to its investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser) or Adviser Affiliates, if the engagement relates directly to the operations and financial reporting of the Registrant.
The Audit Committee has adopted a Policy for Engagement of Independent Accountants for Audit and Non-Audit Services (“Policy”). The Policy sets forth the understanding of the Audit Committee regarding the engagement of the Registrant’s independent accountants to provide (i) audit and permissible audit-related, tax and other services to the Registrant (collectively “Fund Services”); (ii) non-audit services to the Registrant’s investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser) and Adviser Affiliates, if the engagement relates directly to the operations or financial
reporting of a Fund (collectively “Fund-related Adviser Services”); and (iii) certain other audit and non-audit services to the Registrant’s investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser) and Adviser Affiliates. Unless a type of service receives general pre-approval under the Policy, it requires specific pre-approval by the Audit Committee if it is to be provided by the independent accountants. Pre-approval of non-audit services to the Registrant, the Registrant’s investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser) and Adviser Affiliates may be waived provided that the “de minimis” requirements set forth under paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X are met.
Under the Policy, the Audit Committee may delegate pre-approval authority to any pre-designated member or members who are Independent Trustees. The member(s) to whom such authority is delegated must report, for informational purposes only, any pre-approval decisions to the Audit Committee at its next regular meeting. The Audit Committee’s responsibilities with respect to the pre-approval of services performed by the independent accountants may not be delegated to management.
The Policy requires the Fund Treasurer and/or an appropriate Fund officer to submit to the Audit Committee, on an annual basis, a schedule of the types of services that are subject to general pre-approval. The schedule(s) provide a description of each type of service that is subject to general pre-approval and, where possible, will provide estimated fee caps for each instance of providing each service. The Audit Committees will review and approve the types of services and review the projected fees for the next fiscal year and may add to, or subtract from, the list of general pre-approved services from time to time based on subsequent determinations. That approval acknowledges that the Audit Committee is in agreement with the specific types of services that the independent accountants will be permitted to perform.
The Fund Treasurer and/or an appropriate Fund officer shall report to the Audit Committee at each of its regular meetings regarding all Fund Services or Fund-related Adviser Services initiated since the last such report was rendered, including a general description of the services, actual billed and projected fees, and the means by which such Fund Services or Fund-related Adviser Services were pre-approved by the Audit Committee.
*****
(e)(2) The percentage of services described in paragraphs (b) through (d) of this Item approved pursuant to the “de minimis” exception under paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X during both fiscal years ended August 31, 2015 and August 31, 2014 was zero. 100% of the services were pre-approved.
(f) Not applicable.
(g) The aggregate non-audit fees billed by the Registrant’s principal accountant for services rendered to the Registrant, and rendered to the Registrant’s investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and Adviser Affiliates for the fiscal years ended August 31, 2015 and August 31, 2014 are approximately as follows:
2015 |
| 2014 |
| ||
$ | 383,320 |
| $ | 330,545 |
|
(h) The Registrant’s Audit Committee of the Board has considered whether the provision of non-audit services that were rendered to the Registrant’s investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and Adviser Affiliates that were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X, is compatible with maintaining the principal accountant’s independence.
Item 5. Audit Committee of Listed Registrants.
Not applicable.
Item 6. Investments
(a) The Registrant’s “Schedule I — Investments in securities of unaffiliated issuers” (as set forth in 17 CFR 210.12-12) is included in Item 1 of this Form N-CSR.
(b) Not applicable.
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.
Not applicable.
Item 8. Portfolio Managers of Closed-End Management Investment Companies.
Not applicable.
Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.
Not applicable.
Item 10. Submission of Matters to a Vote of Security Holders.
There were no material changes to the procedures by which shareholders may recommend nominees to the Registrant’s Board.
Item 11. Controls and Procedures.
(a) The Registrant’s principal executive officer and principal financial officer, based on their evaluation of the Registrant’s disclosure controls and procedures as of a date within 90 days of the filing of this report, have concluded that such controls and procedures are adequately designed to ensure that material information required to be disclosed by the Registrant in Form N-CSR is accumulated and communicated to the Registrant’s management, including the principal executive officer and principal financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.
(b) There was no change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting.
Item 12. Exhibits.
(a)(1) Code of ethics required to be disclosed under Item 2 of Form N-CSR attached hereto as Exhibit 99.CODE ETH.
(a)(2) Certifications pursuant to Rule 30a-2(a) under the Investment Company Act of 1940 (17 CFR 270.30a-2(a)) attached hereto as Exhibit 99.CERT.
(a)(3) Not applicable.
(b) Certification pursuant to Rule 30a-2(b) under the Investment Company Act of 1940 (17 CFR 270.30a-2(b)) attached hereto as Exhibit 99.906CERT.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
(registrant) |
| BofA Funds Series Trust |
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By (Signature and Title) |
| /s/Michael Pelzar |
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| Michael Pelzar, President |
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Date |
| October 23, 2015 |
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Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
By (Signature and Title) |
| /s/ Michael Pelzar |
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| Michael Pelzar, President |
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Date |
| October 23, 2015 |
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By (Signature and Title) |
| /s/ Jeffrey R. Coleman |
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| Jeffrey R. Coleman, Chief Financial Officer |
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Date |
| October 23, 2015 |
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