UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM N-CSRS
Investment Company Act file number 811-2671
DWS Municipal Trust
(Exact Name of Registrant as Specified in Charter)
Two International Place
Boston, MA 02110
(Address of principal executive offices) (Zip code)
Registrant’s Telephone Number, including Area Code: (212) 454-7190
Paul Schubert
345 Park Avenue
New York, NY 10154
(Name and Address of Agent for Service)
Date of fiscal year end: | 5/31 |
Date of reporting period: | 11/30/07 |
ITEM 1. REPORT TO STOCKHOLDERS
NOVEMBER 30, 2007
Semiannual Report
to Shareholders
DWS Managed Municipal Bond Fund
 |
Contents
click here Performance Summary click here Information About Your Fund's Expenses click here Portfolio Management Review click here Portfolio Summary click here Investment Portfolio click here Financial Statements click here Financial Highlights click here Notes to Financial Statements click here Investment Management Agreement Approval click here Summary of Management Fee Evaluation by Independent Fee Consultant click here Account Management Resources click here Privacy Statement |
This report must be preceded or accompanied by a prospectus. To obtain a prospectus for any of our funds, refer to the Account Management Resources information provided in the back of this booklet. We advise you to consider the fund's objectives, risks, charges and expenses carefully before investing. The prospectus contains this and other important information about the fund. Please read the prospectus carefully before you invest.
Investments in mutual funds involve risk. Some funds have more risk than others. This fund invests in individual bonds whose yields and market values fluctuate so that your investment may be worth more or less than its original cost. Bond investments are subject to interest rate risk such that when interest rates rise, the prices of the bonds, and thus the value of the bond fund, can decline and the investor can lose principal value. Derivatives may be more volatile and less liquid than traditional securities, and the fund could suffer losses on its derivative positions. A portion of the fund's returns may be subject to federal, state and local taxes and the alternative minimum tax. Finally, the fund may focus its investments in certain geographical regions, thereby increasing its vulnerability to developments in that region. This may result in greater share price volatility. Please read this fund's prospectus for specific details regarding its investments and risk profile.
DWS Scudder is part of Deutsche Asset Management, which is the marketing name in the US for the asset management activities of Deutsche Bank AG, Deutsche Bank Trust Company Americas, Deutsche Investment Management Americas Inc. and DWS Trust Company.
NOT FDIC/NCUA INSURED NO BANK GUARANTEE MAY LOSE VALUE NOT A DEPOSIT NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY
Performance Summary November 30, 2007
Classes A, B, C and Institutional
All performance shown is historical, assumes reinvestment of all dividend and capital gain distributions, and does not guarantee future results. Investment return and principal value fluctuate with changing market conditions so that, when redeemed, shares may be worth more or less than their original cost. Current performance may be lower or higher than the performance quoted. Please visit www.dws-scudder.com for the Fund's most recent month-end performance.
The maximum sales charge for Class A shares is 4.5%. For Class B shares, the maximum contingent deferred sales charge (CDSC) is 4% within the first year after purchase, declining to 0% after six years. Class C shares have no front-end sales charge, but redemptions within one year of purchase may be subject to a CDSC of 1%. Unadjusted returns do not reflect sales charges and would have been lower if they had. Institutional Class shares are not subject to sales charges.
The total annual fund operating expense ratios, gross of any fee waivers or expense reimbursements, as stated in the fee table of the prospectus dated October 1, 2007 are 1.04%, 1.84%, 1.81% and 0.78% for Class A, Class B, Class C and Institutional Class shares, respectively. Please see the Information About Your Fund's Expenses, the Financial Highlights and Notes to the Financial Statements (Note C, Related Parties) sections of this report for gross and net expense related disclosure for the period ended November 30, 2007.
To discourage short-term trading, the Fund imposes a 2% redemption fee on shareholders redeeming shares held less than 15 days, which has the effect of lowering total return.
Returns and rankings during all periods shown for Class A, B and C shares and during the 3-year and Life of Class periods shown for Institutional Class shares reflect a fee waiver and/or expense reimbursement. Without this waiver/reimbursement, returns and rankings would have been lower.
Performance figures do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. Returns and rankings may differ by share class.
A portion of the Fund's distributions may be subject to federal, state and local taxes and the alternative minimum tax.
Returns shown for Class A, B and C shares for the periods prior to their inception on June 11, 2001 are derived from the historical performance of Class S shares of DWS Managed Municipal Bond Fund during such periods and have been adjusted to reflect the higher gross total annual operating expenses of each specific class. Any difference in expenses will affect performance.
Average Annual Total Returns (Unadjusted for Sales Charge) as of 11/30/07 | |||||
DWS Managed Municipal Bond Fund | 6-Month‡ | 1-Year | 3-Year | 5-Year | 10-Year |
Class A | 2.45% | 2.65% | 4.19% | 4.30% | 4.92% |
Class B | 2.07% | 1.90% | 3.37% | 3.51% | 4.11% |
Class C | 2.07% | 1.90% | 3.41% | 3.50% | 4.10% |
| Lehman Brothers Municipal Bond Index+ | 2.40% | 2.71% | 4.23% | 4.68% | 5.30% |
Sources: Lipper Inc. and Deutsche Investment Management Americas Inc.
‡ Total returns shown for periods less than one year are not annualized.Average Annual Total Returns as of 11/30/07 | |||||
DWS Managed Municipal Bond Fund | 6-Month‡ | 1-Year | 3-Year | 5-Year | Life of Class* |
Institutional Class | 2.58% | 2.93% | 4.43% | 4.56% | 4.29% |
| Lehman Brothers Municipal Bond Index+ | 2.40% | 2.71% | 4.23% | 4.68% | 4.47% |
Sources: Lipper Inc. and Deutsche Investment Management Americas Inc.
* Institutional Class shares commenced operations on August 19, 2002. Index returns began on August 31, 2002.‡ Total returns shown for periods less than one year are not annualized.
Net Asset Value and Distribution Information | ||||
| Class A | Class B | Class C | Institutional Class |
Net Asset Value: 11/30/07 | $ 9.00 | $ 9.00 | $ 9.00 | $ 9.00 |
| 5/31/07 | $ 8.99 | $ 8.99 | $ 8.99 | $ 8.99 |
Distribution Information: Six Months as of 11/30/07:Income Dividends | $ .20 | $ .16 | $ .16 | $ .21 |
Capital Gain Distributions | $ .01 | $ .01 | $ .01 | $ .01 |
| November Income Dividend | $ .0330 | $ .0275 | $ .0275 | $ .0349 |
| SEC 30-day Yield++ as of 11/30/07 | 3.48% | 2.89% | 2.89% | 3.89% |
| Tax Equivalent Yield++ as of 11/30/07 | 5.35% | 4.45% | 4.45% | 5.98% |
| Current Annualized Distribution Rate++ as of 11/30/07 | 4.47% | 3.73% | 3.73% | 4.73% |
Class A Lipper Rankings — General Municipal Debt Funds Category as of 11/30/07 | ||||
Period | Rank |
| Number of Funds Tracked | Percentile Ranking (%) |
| 1-Year | 25 | of | 237 | 11 |
| 3-Year | 27 | of | 220 | 12 |
| 5-Year | 73 | of | 211 | 35 |
Source: Lipper Inc. Rankings are historical and do not guarantee future results. Rankings are based on total return unadjusted for sales charges with distributions reinvested. If sales charges had been included, results might have been less favorable. Rankings are for Class A shares; other share classes may vary.
Growth of an Assumed $10,000 Investment (Adjusted for Maximum Sales Charge) |
[] DWS Managed Municipal Bond Fund — Class A [] Lehman Brothers Municipal Bond Index+ |
 |
Yearly periods ended November 30 |
The Fund's growth of an assumed $10,000 investment is adjusted for the maximum sales charge of 4.50%. This results in a net initial investment of $9,550.
Comparative Results (Adjusted for Maximum Sales Charge) as of 11/30/07 | |||||
DWS Managed Municipal Bond Fund | 1-Year | 3-Year | 5-Year | 10-Year | |
Class A | Growth of $10,000 | $9,803 | $10,801 | $11,786 | $15,433 |
| Average annual total return | -1.97% | 2.60% | 3.34% | 4.43% | |
Class B | Growth of $10,000 | $9,895 | $10,849 | $11,782 | $14,960 |
| Average annual total return | -1.05% | 2.75% | 3.33% | 4.11% | |
Class C | Growth of $10,000 | $10,190 | $11,057 | $11,877 | $14,939 |
| Average annual total return | 1.90% | 3.41% | 3.50% | 4.10% | |
| Lehman Brothers Municipal Bond Index+ | Growth of $10,000 | $10,271 | $11,323 | $12,568 | $16,759 |
| Average annual total return | 2.71% | 4.23% | 4.68% | 5.30% | |
The growth of $10,000 is cumulative.
+ The Lehman Brothers Municipal Bond Index is an unmanaged market-value-weighted measure of municipal bonds issued across the United States. Index issues have a credit rating of at least Baa and a maturity of at least two years. Index returns, unlike Fund returns, do not reflect any fees or expenses. It is not possible to invest directly into an index.Growth of an Assumed $1,000,000 Investment |
[] DWS Managed Municipal Bond Fund — Institutional Class [] Lehman Brothers Municipal Bond Index+ |
 |
Yearly periods ended November 30 |
Comparative Results as of 11/30/07 | |||||
DWS Managed Municipal Bond Fund | 1-Year | 3-Year | 5-Year | Life of Class* | |
Institutional Class | Growth of $1,000,000 | $1,029,300 | $1,138,900 | $1,249,700 | $1,248,400 |
| Average annual total return | 2.93% | 4.43% | 4.56% | 4.29% | |
| Lehman Brothers Municipal Bond Index+ | Growth of $1,000,000 | $1,027,100 | $1,132,300 | $1,256,800 | $1,257,800 |
| Average annual total return | 2.71% | 4.23% | 4.68% | 4.47% | |
The growth of $1,000,000 is cumulative.
The minimum initial investment for Institutional Class is $1,000,000.
* Institutional Class shares commenced operations on August 19, 2002. Index returns began on August 31, 2002.+ The Lehman Brothers Municipal Bond Index is an unmanaged market-value-weighted measure of municipal bonds issued across the United States. Index issues have a credit rating of at least Baa and a maturity of at least two years. Index returns, unlike Fund returns, do not reflect any fees or expenses. It is not possible to invest directly into an index.
Class S
Class S shares are generally not available to new investors except under certain circumstances. (Please refer to the Fund's Statement of Additional Information.)
All performance shown is historical, assumes reinvestment of all dividend and capital gain distributions, and does not guarantee future results. Investment return and principal value fluctuate with changing market conditions so that, when redeemed, shares may be worth more or less than their original cost. Current performance may be lower or higher than the performance quoted. Please visit www.dws-scudder.com for the Fund's most recent month-end performance.
The total annual fund operating expense ratio, gross of any fee waivers or expense reimbursements, as stated in the fee table of the prospectus dated October 1, 2007 is 0.82% for Class S shares. Please see the Information About Your Fund's Expenses, the Financial Highlights and Notes to the Financial Statements (Note C, Related Parties) sections of this report for gross and net expense related disclosure for the period ended November 30, 2007.
To discourage short-term trading, the Fund imposes a 2% redemption fee on shareholders redeeming shares held less than 15 days, which has the effect of lowering total return.
Returns and rankings during all periods shown for Class S reflect a fee waiver and/or expense reimbursement. Without this waiver/reimbursement, returns and rankings would have been lower.
Performance figures do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. Returns and rankings may differ by share class.
A portion of the Fund's distributions may be subject to federal, state and local taxes and the alternative minimum tax.
Average Annual Total Returns as of 11/30/07 | |||||
DWS Managed Municipal Bond Fund | 6-Month‡ | 1-Year | 3-Year | 5-Year | 10-Year |
Class S | 2.57% | 2.88% | 4.43% | 4.55% | 5.15% |
| Lehman Brothers Municipal Bond Index+ | 2.40% | 2.71% | 4.23% | 4.68% | 5.30% |
Sources: Lipper Inc. and Deutsche Investment Management Americas Inc.
‡ Total returns shown for periods less than one year are not annualized.Net Asset Value and Distribution Information | |
| Class S |
Net Asset Value: 11/30/07 | $ 9.01 |
| 5/31/07 | $ 9.00 |
Distribution Information: Six Months as of 11/30/07:Income Dividends | $ .21 |
Capital Gain Distributions | $ .01 |
| November Income Dividend | $ .0346 |
| SEC 30-day Yield++ as of 11/30/07 | 3.85% |
| Tax Equivalent Yield++ as of 11/30/07 | 5.92% |
| Current Annualized Distribution Rate++ as of 11/30/07 | 4.69% |
Class S Lipper Rankings — General Municipal Debt Funds Category as of 11/30/07 | ||||
Period | Rank |
| Number of Funds Tracked | Percentile Ranking (%) |
| 1-Year | 18 | of | 237 | 8 |
| 3-Year | 13 | of | 220 | 6 |
| 5-Year | 44 | of | 211 | 19 |
| 10-Year | 9 | of | 141 | 6 |
Source: Lipper Inc. Rankings are historical and do not guarantee future results. Rankings are based on total return with distributions reinvested. Rankings are for Class S shares; other share classes may vary.
Growth of an Assumed $10,000 Investment |
[] DWS Managed Municipal Bond Fund — Class S [] Lehman Brothers Municipal Bond Index+ |
 |
Yearly periods ended November 30 |
Comparative Results as of 11/30/07 | |||||
DWS Managed Municipal Bond Fund | 1-Year | 3-Year | 5-Year | 10-Year | |
Class S | Growth of $10,000 | $10,288 | $11,390 | $12,492 | $16,521 |
| Average annual total return | 2.88% | 4.43% | 4.55% | 5.15% | |
| Lehman Brothers Municipal Bond Index+ | Growth of $10,000 | $10,271 | $11,323 | $12,568 | $16,759 |
| Average annual total return | 2.71% | 4.23% | 4.68% | 5.30% | |
The growth of $10,000 is cumulative.
+ The Lehman Brothers Municipal Bond Index is an unmanaged market-value-weighted measure of municipal bonds issued across the United States. Index issues have a credit rating of at least Baa and a maturity of at least two years. Index returns, unlike Fund returns, do not reflect any fees or expenses. It is not possible to invest directly into an index.Information About Your Fund's Expenses
As an investor of the Fund, you incur two types of costs: ongoing expenses and transaction costs. Ongoing expenses include management fees, distribution and service (12b-1) fees and other Fund expenses. Examples of transaction costs include sales charges (loads), redemption fees and account maintenance fees, which are not shown in this section. The following tables are intended to help you understand your ongoing expenses (in dollars) of investing in the Fund and to help you compare these expenses with the ongoing expenses of investing in other mutual funds. In the most recent six-month period, Class A, B, C and S shares limited these expenses; had they not done so, expenses would have been higher. The example in the table is based on an investment of $1,000 invested at the beginning of the six-month period and held for the entire period (June 1, 2007 to November 30, 2007).
The tables illustrate your Fund's expenses in two ways:
Actual Fund Return. This helps you estimate the actual dollar amount of ongoing expenses (but not transaction costs) paid on a $1,000 investment in the Fund using the Fund's actual return during the period. To estimate the expenses you paid over the period, simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the "Expenses Paid per $1,000" line under the share class you hold.
Hypothetical 5% Fund Return. This helps you to compare your Fund's ongoing expenses (but not transaction costs) with those of other mutual funds using the Fund's actual expense ratio and a hypothetical rate of return of 5% per year before expenses. Examples using a 5% hypothetical fund return may be found in the shareholder reports of other mutual funds. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period.
Please note that the expenses shown in these tables are meant to highlight your ongoing expenses only and do not reflect any transaction costs. The "Expenses Paid per $1,000" line of the tables is useful in comparing ongoing expenses only and will not help you determine the relative total expense of owning different funds. An account maintenance fee of $6.25 per quarter for Class S shares may apply for certain accounts whose balances do not meet the applicable minimum initial investment. This fee is not included in these tables. If it was, the estimate of expenses paid for Class S shares during the period would be higher, and account value during the period would be lower, by this amount.
Expenses and Value of a $1,000 Investment (Including Interest Expense)* for the six months ended November 30, 2007 | |||||
Actual Fund Return | Class A | Class B | Class C | Class S | Institutional Class |
| Beginning Account Value 6/1/07 | $ 1,000.00 | $ 1,000.00 | $ 1,000.00 | $ 1,000.00 | $ 1,000.00 |
| Ending Account Value 11/30/07 | $ 1,024.50 | $ 1,020.70 | $ 1,020.70 | $ 1,025.70 | $ 1,025.80 |
| Expenses Paid per $1,000** | $ 5.47 | $ 9.24 | $ 9.30 | $ 4.36 | $ 4.25 |
Hypothetical 5% Fund Return | Class A | Class B | Class C | Class S | Institutional Class |
| Beginning Account Value 6/1/07 | $ 1,000.00 | $ 1,000.00 | $ 1,000.00 | $ 1,000.00 | $ 1,000.00 |
| Ending Account Value 11/30/07 | $ 1,019.60 | $ 1,015.85 | $ 1,015.80 | $ 1,020.70 | $ 1,020.80 |
| Expenses Paid per $1,000** | $ 5.45 | $ 9.22 | $ 9.27 | $ 4.34 | $ 4.24 |
Annualized Expense Ratios | Class A | Class B | Class C | Class S | Institutional Class |
| DWS Managed Municipal Bond Fund | 1.08% | 1.83% | 1.84% | .86% | .84% |
Expenses and Value of a $1,000 Investment (Excluding Interest Expense)* for the six months ended November 30, 2007 | |||||
Actual Fund Return | Class A | Class B | Class C | Class S | Institutional Class |
| Beginning Account Value 6/1/07 | $ 1,000.00 | $ 1,000.00 | $ 1,000.00 | $ 1,000.00 | $ 1,000.00 |
| Ending Account Value 11/30/07 | $ 1,024.50 | $ 1,020.70 | $ 1,020.70 | $ 1,025.70 | $ 1,025.80 |
| Expenses Paid per $1,000** | $ 3.69 | $ 7.48 | $ 7.53 | $ 2.58 | $ 2.48 |
Hypothetical 5% Fund Return | Class A | Class B | Class C | Class S | Institutional Class |
| Beginning Account Value 6/1/07 | $ 1,000.00 | $ 1,000.00 | $ 1,000.00 | $ 1,000.00 | $ 1,000.00 |
| Ending Account Value 11/30/07 | $ 1,021.41 | $ 1,017.65 | $ 1,017.60 | $ 1,022.51 | $ 1,022.66 |
| Expenses Paid per $1,000** | $ 3.69 | $ 7.47 | $ 7.52 | $ 2.58 | $ 2.48 |
Annualized Expense Ratios | Class A | Class B | Class C | Class S | Institutional Class |
| DWS Managed Municipal Bond Fund | .73% | 1.48% | 1.49% | .51% | .49% |
** Expenses are equal to the Fund's annualized expense ratio for each share class, multiplied by the average account value over the period, multiplied by the number of days in the most recent six-month period, then divided by 366.
For more information, please refer to the Fund's prospectus.
Philip G. Condon, Ashton P. Goodfield and Eleanor R. Lynch serve as co-lead portfolio managers of DWS Managed Municipal Bond Fund. Matthew J. Caggiano is also a portfolio manager. In the following interview, the DWS municipal bond team discusses the fund's performance for the period and the market environment for municipal bonds.
The views expressed in the following discussion reflect those of the portfolio managers only through the end of the period of the report as stated on the cover. The management team's views are subject to change at any time based on market and other conditions and should not be construed as a recommendation. Past performance is no guarantee of future results.
Q: Will you describe the general market environment during the semiannual period ended November 30, 2007?
A: Municipal bonds delivered positive results over the six months, although returns lagged those of the taxable market. The municipal bond market, as measured by the Lehman Brothers Municipal Bond Index, delivered a total return of 2.40% for the six months ended November 30, 2007.1 The broad taxable bond market, as measured by the Lehman Brothers US Aggregate Index, delivered a total return of 5.32% for the same period.2
1 The Lehman Brothers Municipal Bond Index is an unmanaged market-value-weighted measure of municipal bonds issued across the United States. Index issues have a credit rating of at least Baa and a maturity of at least two years.2 The Lehman Brothers US Aggregate Index is an unmanaged index representing domestic taxable investment-grade bonds, with index components for government and corporate securities, mortgage pass-through securities and asset-backed securities with average maturities of one year or more.
Index returns, unlike fund returns, do not include fees or expenses. It is not possible to invest directly into an index.
The US Federal Reserve Board (the Fed) lowered short-term rates twice during the period, in September and October, for a total reduction of 75 basis points (one basis point equals 0.01%). This left the federal funds rate — the overnight interbank lending rate and a benchmark for interest rates generally — at 4.50% at the end of November 2007. Municipal yields declined on the short and intermediate parts of the yield curve, while rising slightly on the long end.3 Since a bond's yield moves in the opposite direction of its price, this meant that performance of shorter-term municipal bonds was generally better than among longer issues.
3 The yield curve is a graph with a left-to-right line that shows how high or low yields are, from the shortest to the longest maturities. Typically (and when the yield curve is characterized as "steep," this is especially true) the line rises from left to right as investors who are willing to tie up their money for a longer period are rewarded with higher yields.The relationship between supply of and demand for municipal issues can be an important factor in the performance of this market. High demand or low supply can drive municipal bond prices higher, while low demand or high supply can have the reverse effect. Supply nationally was generally heavy during the six months, driven by relatively low interest rates, although issuance began to ease toward the end of the period. Taking a slightly longer view, issuance over the first 11 months of 2007 was 16 percent above last year's pace. On the demand side, as the period began, much activity was being driven by institutional investors using non-traditional strategies to benefit in a leveraged fashion from disparities between the tax-free and taxable markets. In the wake of the subprime mortgage crisis and resulting credit crunch, much of this interest has waned. Another outgrowth of the tighter credit environment has been a trimming of municipal inventory on the part of dealers looking to improve balance sheets, further constraining demand. Flows into tax-free mutual funds were positive overall for the period.
The municipal bond yield curve steepened during the six months. The two-year bond yield decreased 50 basis points from 3.68% to 3.18%, while the 30-year yield rose 7 basis points to 4.32% from 4.25%, resulting in a total steepening of 57 basis points. (See the graph on the following page for municipal bond yield changes from the beginning to the end of the period.)
Municipal credit spreads widened significantly during the period, as all fixed-income markets were influenced by the flight to quality that ensued as the subprime mortgage crisis unfolded in
Municipal Bond Yield Curve (as of 5/31/07 and 11/30/07) |
 |
Source: Municipal Market Data, AAA-rated universe
This chart is for illustrative purposes only and is not intended to represent the yield of any DWS fund. Performance is historical and does not guarantee future results.
the summer of 2007.4 As a result, higher-quality municipals outperformed lower-rated bonds.
4 The additional yield provided by non-Treasury fixed income securities versus Treasury securities of comparable duration.Q: How did DWS Managed Municipal Bond Fund perform for the six-month period ended November 30, 2007?
A: DWS Managed Municipal Bond Fund posted a positive return and strong relative performance over the period. The fund's Class A shares delivered a total return of 2.45%. (Returns are unadjusted for sales charges. If sales charges had been included, returns would have been lower. Past performance is no guarantee of future results. Please see pages 4 through 10 for the performance of other share classes and more complete performance information.) Its benchmark, the unmanaged Lehman Brothers Municipal Bond Index, returned 2.40%. The fund outperformed its average peer in the Lipper General Municipal Debt Funds category, which gained 0.77%.5
5 The Lipper General Municipal Debt Funds category includes funds that invest primarily in municipal debt issues in the top four credit ratings. Lipper figures represent the average of the total returns reported by all of the mutual funds designated by Lipper Inc. as falling into the General Municipal Debt Funds category. Category returns assume reinvestment of dividends. It is not possible to invest directly into a Lipper category.Q: How was the fund positioned, and how did this positioning contribute to its performance for the semiannual period ended November 30, 2007?
A: We continue to manage the fund for total return, while also seeking to provide shareholders with a relatively consistent level of income. For much of the period, we maintained a relatively defensive posture. This translated into an underweighting of both lower-quality and longer-maturity issues compared to many of our peers.6
6 "Overweight" means the fund holds a higher weighting in a given sector or security than the benchmark. "Underweight" means the fund holds a lower weighting.With respect to credit risk, the yield advantage provided by BBB-rated versus AAA-rated issues has for some time been narrow by historical standards, and we did not feel that we could justify any significant tilt toward lower quality given the minimal incremental reward.7 This benefited performance as credit spreads widened over the period. In particular, the fund's modest exposure to tobacco- and airline-related issues helped performance. In our view credit spreads have reached levels where investors are paid more fairly for the incremental risk, and we have begun to selectively increase exposure to lower-quality issues. As an example, we recently increased the fund's holdings of prepaid utility contract bonds. These issues are backed by brokerage firms, virtually all of whom have some exposure to the subprime market, and their prices suffered during the period. We believe these issues have reached very favorable price levels as a result, offering an opportunity to add yield and total return potential. At the end of the period, 71% of the fund's portfolio holdings were rated AAA.
7 Credit quality is a measure of a bond issuer's ability to repay interest and principal in a timely manner. Rating agencies assign letter designations such as AAA, AA and so forth. The lower the rating, the higher the probability of default.We do not focus on trying to predict the overall level of interest rates, and we attempt to keep the fund's duration and overall interest rate sensitivity similar to that of its peers and its benchmark, the Lehman Brothers Municipal Bond Index.8 That said, we will shift the fund's relative exposure to shorter and longer maturities to reflect our view of where the best return opportunities lie. For much of the period, a flat yield curve reduced the income advantage provided by longer-term issues. In this environment, we emphasized bonds with maturities in the 10- to 15-year range. This curve positioning helped performance, as intermediate-term bonds experienced yield declines and price increases, while yields rose and prices fell slightly on longer-dated issues. As the curve has steepened, we have begun to add exposure to issues in the 20-year range.
8 Duration is a measure of bond price volatility. Duration can be defined as the approximate percentage change in price for a 100-basis-point (one single percentage point) change in market interest rate levels. A duration of 1.25, for example, means that the price of a bond or bond portfolio should rise by approximately 1.25% for a one-percentage-point drop in interest rates, and that it should fall by 1.25% for a one-percentage-point rise in interest rates.The fund's returns benefited from significant exposure to issues that were prerefunded.9 At the end of November, 23% of portfolio holdings fell into this category.
9 Prerefunded bonds have their principle cash amount already held aside by the original issuer of the debt. A subset of the municipal and corporate bond classes, the funds required to pay off refunded bonds are held in escrow until the maturity date, usually by purchasing Treasury or agency paper.At the end of November, the 10-year municipal bond was yielding approximately 92% of the comparable maturity US Treasury bond, reflecting an unusually attractive relative valuation. As a result, we have increased the use of hedging strategies designed to allow the fund to potentially benefit from the future performance of municipals versus treasuries.
After the end of the fund's fiscal period, the major rating agencies - -— Moody's, Standard & Poor's and Fitch — placed on negative watch or outlook a number of leading bond insurers. Additionally, Ambac was downgraded to AA by Fitch. The underlying securities of municipal bonds insured by these firms are generally of high credit quality, with an average rating in the A category. The majority of the bonds insured by these three companies are backed by municipal general obligations, leases, other taxes, or essential purpose revenue bonds. While such downgrades have the potential to affect the trading value of a bond, we believe the default risk on an underlying municipal credit remains relatively low.
As wider credit spreads, a steeper yield curve and more favorable municipal valuations have emerged, we have begun to adopt a less defensive position in the fund to take advantage of potential opportunities. We will continue to take a prudent approach to investing in the municipal market, while seeking to maintain an attractive dividend.
Asset Allocation (As a % of Investment Portfolio) | 11/30/07 | 5/31/07 |
|
|
|
Revenue Bonds | 48% | 45% |
ETM/Prerefunded | 23% | 25% |
General Obligation Bonds | 20% | 19% |
Lease Obligations | 9% | 11% |
| 100% | 100% |
Quality | 11/30/07 | 5/31/07 |
|
|
|
AAA | 71% | 75% |
AA | 10% | 9% |
A | 7% | 5% |
BBB | 4% | 2% |
B | 1% | 1% |
Not Rated | 7% | 8% |
| 100% | 100% |
Effective Maturity | 11/30/07 | 5/31/07 |
|
|
|
0-4.99 years | 33% | 40% |
5-9.99 years | 48% | 46% |
10-14.99 years | 13% | 12% |
Greater than 15 years | 6% | 2% |
| 100% | 100% |
Weighted average effective maturity: 7.21 years and 5.75 years, respectively.
Asset allocation, quality and effective maturity are subject to change.
The quality ratings represent the lower of Moody's Investors Services, Inc. ("Moody's") or Standard & Poor's Corporation ("S&P") credit ratings. The ratings of Moody's and S&P represent their opinions as to the quality of the securities they rate. Ratings are relative and subjective and are not absolute standards of quality. The Fund's credit quality does not remove market risk.
Top Five State Allocations (As a % of Investment Portfolio) | 11/30/07 | 5/31/07 |
|
|
|
California | 16% | 15% |
Illinois | 11% | 11% |
Texas | 8% | 8% |
New Jersey | 8% | 9% |
Massachusetts | 7% | 6% |
Top five state allocations are subject to change.
For more complete details about the Fund's investment portfolio, see page 21. A quarterly Fact Sheet is available upon request. Information concerning portfolio holdings of the Fund as of month end will be posted to www.dws-scudder.com on or after the last day of the following month. Please see the Account Management Resources section for contact information.
Following the Fund's fiscal first and third quarter-end, a complete portfolio holdings listing is filed with the SEC on Form N-Q. The form will be available on the SEC's Web site at www.sec.gov, and it also may be reviewed and copied at the SEC's Public Reference Room in Washington, D.C. Information on the operation of the SEC's Public Reference Room may be obtained by calling (800) SEC-0330.
Investment Portfolio as of November 30, 2007 (Unaudited)
| Principal Amount ($) | Value ($) |
|
| |
Municipal Bonds and Notes 89.7% | ||
Alabama 0.1% | ||
Phoenix County, AL, Industrial Development Revenue, Industrial Development Board, AMT, 6.35%, 5/15/2035 | 4,000,000 | 4,108,080 |
Alaska 0.3% | ||
Anchorage, AK, Electric Revenue, 6.5%, 12/1/2015 (a) | 5,000,000 | 5,991,600 |
North Slope Borough, AK, County General Obligation Lease, Series B, Zero Coupon, 6/30/2011 (a) | 5,000,000 | 4,407,650 |
| 10,399,250 | |
Arizona 1.2% | ||
Arizona, Salt Verde Financial Corp., Gas Revenue, 5.5%, 12/1/2029 | 9,600,000 | 9,981,216 |
Mesa, AZ, Electric Revenue: |
|
|
5.25%, 7/1/2016 (a) | 7,500,000 | 8,339,475 |
5.25%, 7/1/2017 (a) | 10,000,000 | 11,159,800 |
Phoenix, AZ, Transportation/Tolls Revenue, Series A, Zero Coupon, 7/1/2012 (a) | 4,675,000 | 3,946,167 |
Phoenix, AZ, Water & Sewer Revenue, Civic Improvement Corp., Prerefunded, 6.0%, 7/1/2011 (a) | 4,105,000 | 4,421,003 |
Scottsdale, AZ, General Obligation, 5.375%, 7/1/2015 | 1,635,000 | 1,753,047 |
Tucson, AZ, Water & Sewer Revenue, 5.5%, 7/1/2018 (a) | 4,100,000 | 4,482,407 |
| 44,083,115 | |
Arkansas 0.5% | ||
Jonesboro, AR, Hospital & Healthcare Revenue, Healthcare Facilities Authority, Bernard's Regional Medical Center, Series A, 5.8%, 7/1/2012 (a) | 4,025,000 | 4,072,213 |
North Little Rock, AR, Electric Revenue, Series A, 6.5%, 7/1/2015 (a) | 13,080,000 | 14,914,470 |
| 18,986,683 | |
California 14.8% | ||
Banning, CA, Water & Sewer Revenue, 1989 Water System Improvement Project, 8.0%, 1/1/2019 (a) | 845,000 | 1,046,279 |
Banning, CA, Water & Sewer Revenue, Water System Reference & Improvement Project, 8.0%, 1/1/2019 (a) | 770,000 | 896,873 |
California, Department of Water Resources Revenue: |
|
|
Prerefunded, Series W, 5.5%, 12/1/2015 | 565,000 | 613,347 |
5.5%, 12/1/2015 | 2,825,000 | 3,048,571 |
California, Golden State Tobacco Securitization Corp., Tobacco Settlement Revenue: |
|
|
Series A-1, 5.0%, 6/1/2033 | 5,000,000 | 4,389,550 |
Series A-1, 6.625%, 6/1/2040 | 17,545,000 | 20,302,899 |
California, Higher Education Revenue, Marymount University, Zero Coupon, 10/1/2014 (a) | 1,000,000 | 772,070 |
California, Public Works Board, Lease Revenue, Department of Corrections, Series C, 5.0%, 6/1/2025 | 2,500,000 | 2,531,650 |
California, Senior Care Revenue, Statewide Community Development Authority, California Lutheran Homes, ETM, 5.5%, 11/15/2008 | 610,000 | 621,242 |
California, Special Assessment Revenue, Golden State Tobacco Securitization Corp.: |
|
|
Series B, 5.5%, 6/1/2043 | 9,950,000 | 10,957,537 |
Series B, 5.625%, 6/1/2038 | 37,265,000 | 41,270,242 |
Series A-1, 5.75%, 6/1/2047 | 6,670,000 | 6,280,472 |
Series 2003-A-1, 6.75%, 6/1/2039 | 37,520,000 | 43,650,768 |
California, State General Obligation: |
|
|
5.0%, 5/1/2015 | 5,000,000 | 5,383,950 |
5.0%, 3/1/2017 | 10,000,000 | 10,697,900 |
Series 1, 5.0%, 9/1/2019 | 12,700,000 | 13,417,931 |
5.0%, 6/1/2029 (a) | 25,000,000 | 25,796,750 |
5.0%, 2/1/2031 (a) | 26,975,000 | 27,620,512 |
5.125%, 11/1/2024 | 5,000,000 | 5,244,000 |
5.25%, 2/1/2017 | 17,450,000 | 18,795,919 |
California, State General Obligation, Various Purposes: |
|
|
5.0%, 6/1/2023 (a) | 25,000,000 | 26,584,000 |
5.0%, 11/1/2026 | 10,000,000 | 10,263,200 |
5.0%, 11/1/2027 | 5,000,000 | 5,119,650 |
5.0%, 12/1/2031 (a) | 13,545,000 | 13,942,410 |
California, State Public Works Board, Lease Revenue, Department of Mental Health: |
|
|
Series A, 5.5%, 6/1/2021 | 5,275,000 | 5,754,076 |
Series A, 5.5%, 6/1/2022 | 1,400,000 | 1,522,962 |
California, State Revenue Lease, 5.25%, 12/1/2020 (a) | 22,040,000 | 23,592,277 |
California, State Revenue Lease, Public Works Board, Department of Corrections: |
|
|
Series C, 5.5%, 6/1/2020 | 5,000,000 | 5,434,250 |
Series C, 5.5%, 6/1/2021 | 2,500,000 | 2,711,550 |
California, State University Revenue, Series A, 5.25%, 11/1/2021 (a) | 4,000,000 | 4,288,640 |
California, Statewide Communities Development Authority, Multi-Family Housing Revenue, Imperial Park Apartments, Series 00, AMT, 3.55%*, 11/1/2040 | 12,000,000 | 12,000,000 |
Foothill, CA, Eastern Corridor Agency, Toll Road Revenue: |
|
|
Series A, ETM, Zero Coupon, 1/1/2015 | 11,000,000 | 8,465,710 |
Series A, ETM, Zero Coupon, 1/1/2017 | 5,000,000 | 3,488,900 |
Foothill, CA, Transportation/Tolls Revenue, Eastern Corridor Agency: |
|
|
Series A, ETM, Zero Coupon, 1/1/2018 | 21,890,000 | 14,479,359 |
Series A, Prerefunded, 6.0%, 1/1/2016 | 20,400,000 | 21,549,540 |
Series A, ETM, 7.05%, 1/1/2009 | 5,000,000 | 5,200,050 |
Series A, Prerefunded, 7.1%, 1/1/2011 | 4,000,000 | 4,384,280 |
Series A, Prerefunded, 7.1%, 1/1/2012 | 4,000,000 | 4,384,280 |
Series A, Prerefunded, 7.15%, 1/1/2014 | 6,250,000 | 6,856,188 |
Long Beach, CA, Bond Finance Authority, Natural Gas Purchase Revenue, Series A, 5.5%, 11/15/2030 | 15,000,000 | 15,285,000 |
Los Angeles County, CA, County General Obligation Lease, Zero Coupon, 9/1/2009 | 5,425,000 | 5,093,478 |
Los Angeles, CA, Airport Revenue, Regional Airports Improvement Corporation Lease, Series C, AMT, 7.5%, 12/1/2024 | 2,500,000 | 2,662,025 |
Los Angeles, CA, School District General Obligation, Unified School District, 5.75%, 7/1/2016 (a) | 17,000,000 | 19,705,550 |
Madera County, CA, Hospital & Healthcare Revenue, Valley Childrens Hospital, 6.5%, 3/15/2010 (a) | 2,840,000 | 3,035,903 |
Murrieta Valley, CA, School District General Obligation, Unified School District, Series A, Zero Coupon, 9/1/2014 (a) | 4,235,000 | 3,251,929 |
Northern California, Tobacco Securitization Authority, Tobacco Settlement Revenue, Series A-1, 5.375%, 6/1/2038 | 6,915,000 | 6,237,745 |
Oakland, CA, Special Assessment Revenue, Oakland Convention Centers, 5.5%, 10/1/2014 (a) | 2,000,000 | 2,251,580 |
Roseville, CA, School District General Obligation, Junior High, Series B, Zero Coupon, 8/1/2015 (a) | 1,000,000 | 736,380 |
San Diego, CA, School District General Obligation, Series A, Zero Coupon, 7/1/2014 (a) | 3,420,000 | 2,643,284 |
San Diego, CA, Water & Sewer Revenue, 5.681%, 4/22/2009 (a) | 4,500,000 | 4,643,820 |
San Joaquin County, CA, County General Obligation Lease, Facilities Project, 5.5%, 11/15/2013 (a) | 3,895,000 | 4,247,848 |
San Joaquin Hills, CA, Transportation/Tolls Revenue, Transportation Corridor Agency, Toll Road Revenue: |
|
|
Series A, Zero Coupon, 1/15/2012 (a) | 5,000,000 | 4,328,300 |
Series A, Zero Coupon, 1/15/2013 (a) | 35,295,000 | 29,248,966 |
Series A, Zero Coupon, 1/15/2014 (a) | 14,905,000 | 11,793,283 |
Southern California, Public Power Authority, Natural Gas Project Revenue, Project No. 1: |
|
|
Series A, 5.25%, 11/1/2026 | 6,000,000 | 6,097,200 |
Series A, 5.25%, 11/1/2027 | 8,250,000 | 8,356,755 |
Ukiah, CA, School District General Obligation Lease, Zero Coupon, 8/1/2015 (a) | 2,000,000 | 1,472,760 |
Vallejo City, CA, General Obligation, Unified School District, Series A, 5.9%, 2/1/2022 (a) | 3,905,000 | 4,666,163 |
| 559,117,753 | |
Colorado 2.9% | ||
Colorado, E-40 Public Highway Authority Revenue, Series B, Zero Coupon, 9/1/2016 (a) | 5,000,000 | 3,475,100 |
Colorado, Hospital & Healthcare Revenue, Portercare Adventist Health Project, 6.5%, 11/15/2031 | 3,000,000 | 3,379,200 |
Colorado, Transportation/Tolls Revenue: |
|
|
Series B, Zero Coupon, 9/1/2014 (a) | 11,295,000 | 8,644,402 |
Series B, Zero Coupon, 9/1/2015 (a) | 21,500,000 | 15,719,725 |
Series B, Zero Coupon, 9/1/2017 (a) | 8,000,000 | 5,278,080 |
Series B, Zero Coupon, 9/1/2018 (a) | 20,560,000 | 12,808,263 |
Series B, Zero Coupon, 9/1/2019 (a) | 36,500,000 | 21,436,815 |
Series B, Zero Coupon, 9/1/2020 (a) | 7,000,000 | 3,895,010 |
Series B, Zero Coupon, 9/1/2034 | 15,200,000 | 2,272,704 |
Series A, 5.75%, 9/1/2014 (a) | 14,700,000 | 16,524,417 |
Denver, CO, School District General Obligation, Series A, 6.5%, 12/1/2010 | 3,000,000 | 3,272,490 |
Douglas County, CO, School District General Obligation, 7.0%, 12/15/2013 (a) | 2,500,000 | 2,978,125 |
Mesa County, CO, Residual Revenue, EMT, Zero Coupon, 12/1/2011 | 11,435,000 | 9,917,004 |
| 109,601,335 | |
Connecticut 0.4% | ||
Connecticut, State General Obligation: |
|
|
Series C, 5.5%, 12/15/2014 | 5,000,000 | 5,647,550 |
Series A, 5.5%, 12/15/2015 | 5,000,000 | 5,704,950 |
Prerefunded, Series E, ETM, 6.0%, 3/15/2012 | 170,000 | 188,685 |
Greenwich, CT, Multi-Family Housing Revenue, 6.35%, 9/1/2027 | 2,640,000 | 2,721,549 |
| 14,262,734 | |
District of Columbia 0.2% | ||
District of Columbia, Core City General Obligation: |
|
|
Series B3, 5.5%, 6/1/2012 (a) | 1,050,000 | 1,142,117 |
Series A1, 6.5%, 6/1/2010 (a) | 1,095,000 | 1,180,016 |
Series A1, Prerefunded, 6.5%, 6/1/2010 (a) | 1,175,000 | 1,264,464 |
District of Columbia, Water & Sewer Revenue, Public Utility Revenue, 5.5%, 10/1/2023 (a) | 5,000,000 | 5,690,500 |
| 9,277,097 | |
Florida 2.9% | ||
Florida, State Board of Public Education, Series D, 5.375%, 6/1/2019 | 1,000,000 | 1,070,820 |
Florida, Village Center Community Development District, Utility Revenue, ETM, 6.0%, 11/1/2018 (a) | 1,250,000 | 1,469,025 |
Florida, Water Pollution Control Financing Corp. Revenue, 5.5%, 1/15/2014 | 1,000,000 | 1,071,720 |
Fort Pierce, FL, Utilities Authority Revenue, Series B, Zero Coupon, 10/1/2018 (a) | 2,000,000 | 1,255,940 |
Gainesville, FL, Utilities System Revenue, Series B, 6.5%, 10/1/2010 | 1,370,000 | 1,486,724 |
Highlands County, FL, Health Facilities Authority Revenue, Adventist Health Systems: |
|
|
5.25%, 11/15/2020 | 1,000,000 | 1,027,440 |
Prerefunded, 5.25%, 11/15/2028 | 170,000 | 174,617 |
5.25%, 11/15/2028 | 5,130,000 | 5,270,767 |
Highlands County, FL, Health Facilities Authority Revenue, Adventist Sunbelt, Series A, 6.0%, 11/15/2031 | 7,000,000 | 7,733,950 |
Hillsborough County, FL, Industrial Development Authority Revenue, University Community Hospital, 6.5%, 8/15/2019 (a) | 1,000,000 | 1,198,700 |
Jacksonville, FL, Health Facilities Authority, Prerefunded, ETM, 11.5%, 10/1/2012 | 85,000 | 115,520 |
Jacksonville, FL, Sales & Special Tax Revenue, Local Government: |
|
|
5.5%, 10/1/2015 (a) | 4,730,000 | 5,335,203 |
5.5%, 10/1/2016 (a) | 6,760,000 | 7,658,742 |
5.5%, 10/1/2018 (a) | 6,470,000 | 7,362,019 |
Melbourne, FL, Water & Sewer Revenue, ETM, Zero Coupon, 10/1/2016 (a) | 1,350,000 | 957,164 |
Miami Beach, FL, Stormwater Revenue, 5.75%, 9/1/2017 (a) | 725,000 | 777,164 |
Miami-Dade County, FL, Sales & Special Tax Revenue: |
|
|
Series A, Zero Coupon, 10/1/2014 (a) | 2,195,000 | 1,594,075 |
Series A, Zero Coupon, 10/1/2022 (a) | 7,000,000 | 3,227,560 |
Orange County, FL, Health Facilities Authority Revenue: |
|
|
Series 2006-A, ETM, 6.25%, 10/1/2016 (a) | 70,000 | 82,295 |
Series 2006-A, 6.25%, 10/1/2016 (a) | 1,100,000 | 1,279,245 |
Orange County, FL, Health Facilities Authority Revenue, Orlando Regional Healthcare System: |
|
|
5.75%, 12/1/2032 | 1,000,000 | 1,106,550 |
Series A, 6.25%, 10/1/2018 (a) | 500,000 | 593,500 |
Series C, 6.25%, 10/1/2021 (a) | 6,000,000 | 7,206,660 |
Orange County, FL, Health Facilities Authority, Orlando Regional Facilities, Series A, ETM, 6.25%, 10/1/2016 (a) | 2,830,000 | 3,354,739 |
Orlando & Orange County, FL, Expressway Authority Revenue, 6.5%, 7/1/2012 (a) | 1,000,000 | 1,128,540 |
Orlando, FL, Electric Revenue, Community Utilities, 6.75%, 10/1/2017 | 6,500,000 | 7,754,955 |
Orlando, FL, Special Assessment Revenue, Conroy Road Interchange Project, Series A, 5.8%, 5/1/2026 | 500,000 | 496,895 |
Palm Beach County, FL, Airport Systems Revenue: |
|
|
5.75%, 10/1/2012 (a) | 3,775,000 | 4,154,085 |
5.75%, 10/1/2013 (a) | 3,770,000 | 4,205,623 |
5.75%, 10/1/2014 (a) | 755,000 | 852,554 |
Palm Beach County, FL, Airport Systems Revenue, Prerefunded: |
|
|
5.75%, 10/1/2012 (a) | 1,225,000 | 1,359,529 |
5.75%, 10/1/2013 (a) | 1,230,000 | 1,384,205 |
5.75%, 10/1/2014 (a) | 245,000 | 279,283 |
Palm Beach County, FL, Criminal Justice Facilities Revenue, 7.2%, 6/1/2015 (a) | 110,000 | 135,574 |
Sunrise, FL, Water & Sewer Revenue, Utility Systems, 5.5%, 10/1/2018 (a) | 12,500,000 | 14,043,625 |
Tallahassee, FL, Energy System Revenue, 5.5%, 10/1/2016 (a) | 1,005,000 | 1,136,193 |
Tampa, FL, Occupational License Tax, Series A, 5.375%, 10/1/2017 (a) | 1,000,000 | 1,079,470 |
Tampa, FL, Sales Tax Revenue, Series A, 5.375%, 10/1/2017 (a) | 500,000 | 539,980 |
Tampa, FL, Sports Authority Revenue, Sales Tax-Tampa Bay Arena Project, 5.75%, 10/1/2020 (a) | 2,075,000 | 2,405,838 |
Tampa, FL, Utility Tax Revenue, Zero Coupon, 10/1/2014 (a) | 3,165,000 | 2,435,436 |
Tampa, FL, Water Utility Systems Revenue, Prerefunded, 5.625%, 10/1/2013 (a) | 1,850,000 | 2,007,527 |
Westchase, FL, Community Development District, Special Assessment Revenue, 5.8%, 5/1/2012 (a) | 2,530,000 | 2,554,946 |
| 110,364,397 | |
Georgia 3.6% | ||
Atlanta, GA, Airport Revenue, AMT: |
|
|
Series B, 5.75%, 1/1/2010 (a) | 4,240,000 | 4,407,607 |
Series B, 5.75%, 1/1/2011 (a) | 1,590,000 | 1,666,590 |
Series C, 6.0%, 1/1/2011 (a) | 7,375,000 | 7,766,908 |
Atlanta, GA, Water & Sewer Revenue, Series A, 5.5%, 11/1/2019 (a) | 13,000,000 | 14,526,200 |
Cobb County, GA, Hospital & Healthcare Revenue, Series A, 5.625%, 4/1/2011 (a) | 2,305,000 | 2,396,647 |
Georgia, Main Street Natural Gas, Inc. Gas Project Revenue: |
|
|
Series A, 5.0%, 3/15/2019 | 17,440,000 | 17,839,376 |
Series B, 5.0%, 3/15/2019 | 5,000,000 | 4,971,950 |
Series A, 5.0%, 3/15/2020 | 9,950,000 | 10,137,060 |
Series B, 5.0%, 3/15/2020 | 5,000,000 | 4,943,150 |
Series A, 5.0%, 3/15/2022 | 10,000,000 | 10,075,600 |
Series A, 5.5%, 9/15/2023 | 5,000,000 | 5,086,850 |
Series A, 5.5%, 9/15/2024 | 9,635,000 | 9,744,935 |
Series A, 5.5%, 9/15/2028 | 15,000,000 | 14,934,300 |
Georgia, Municipal Electric Authority Power Revenue: |
|
|
Series Y, Prerefunded,ETM, 6.4%, 1/1/2013 (a) | 195,000 | 216,906 |
Series 2005-Y, Prerefunded, 6.4%, 1/1/2013 | 35,000 | 38,206 |
Series 2005-Y, 6.4%, 1/1/2013 (a) | 3,270,000 | 3,606,941 |
Series V, 6.5%, 1/1/2012 (a) | 5,000,000 | 5,315,350 |
Series X, 6.5%, 1/1/2012 (a) | 3,500,000 | 3,717,665 |
Series W, 6.6%, 1/1/2018 (a) | 11,270,000 | 13,138,453 |
Georgia, Water & Sewer Revenue, Municipal Electric Authority Power Revenue, Series W, 6.6%, 1/1/2018 (a) | 200,000 | 239,454 |
Macon-Bibb County, GA, Hospital & Healthcare Revenue, Series C, 5.25%, 8/1/2011 (a) | 2,465,000 | 2,618,767 |
| 137,388,915 | |
Hawaii 0.3% | ||
Hawaii, State General Obligation, Series CU, Prerefunded, 5.875%, 10/1/2014 (a) | 1,500,000 | 1,605,990 |
Honolulu, HI, City & County General Obligation: |
|
|
Series A, 5.0%, 7/1/2022 (a) | 4,000,000 | 4,287,760 |
Series A, 5.0%, 7/1/2023 (a) | 3,000,000 | 3,203,550 |
Series A, 5.0%, 7/1/2024 (a) | 3,000,000 | 3,191,340 |
| 12,288,640 | |
Illinois 10.4% | ||
Chicago, IL, Core City General Obligation: |
|
|
Zero Coupon, 1/1/2017 (a) | 20,000,000 | 13,758,000 |
Series B, 5.0%, 1/1/2011 (a) | 1,620,000 | 1,702,328 |
Series B, 5.125%, 1/1/2015 (a) | 9,550,000 | 10,365,092 |
Series A, 5.375%, 1/1/2013 (a) | 15,410,000 | 16,370,043 |
6.25%, 1/1/2011 (a) | 3,000,000 | 3,169,830 |
Chicago, IL, Sales & Special Tax Revenue, 5.375%, 1/1/2014 (a) | 5,000,000 | 5,508,300 |
Chicago, IL, School District General Obligation Lease, Board of Education: |
|
|
Series A, 6.0%, 1/1/2016 (a) | 11,025,000 | 12,795,284 |
Series A, 6.0%, 1/1/2020 (a) | 46,340,000 | 54,436,061 |
Series A, 6.25%, 1/1/2009 (a) | 6,735,000 | 6,946,142 |
Series A, 6.25%, 1/1/2015 (a) | 28,725,000 | 32,386,863 |
Chicago, IL, School District General Obligation Lease, Public Housing Revenue, Series A, 5.25%, 12/1/2011 (a) | 9,705,000 | 10,418,609 |
Chicago, IL, School District General Obligation, Board of Education: |
|
|
Series B, Zero Coupon, 12/1/2009 (a) | 7,615,000 | 7,110,811 |
Series A, Zero Coupon, 12/1/2014 (a) | 2,000,000 | 1,534,440 |
Chicago, IL, School District Revenue Lease, Board of Education, 6.25%, 12/1/2011 (a) | 1,600,000 | 1,775,312 |
Chicago, IL, Water & Sewer Revenue: |
|
|
Zero Coupon, 11/1/2012 (a) | 6,350,000 | 5,291,836 |
Zero Coupon, 11/1/2018 (a) | 5,165,000 | 3,221,565 |
5.375%, 1/1/2013 (a) | 3,215,000 | 3,428,701 |
Chicago, IL, Water Revenue, Second Lien, 3.58%*, 11/1/2031 (a) | 4,300,000 | 4,300,000 |
Cook & Du Page Counties, IL, High School District No. 210: |
|
|
ETM, Zero Coupon, 12/1/2009 (a) | 2,575,000 | 2,404,020 |
Zero Coupon, 12/1/2009 (a) | 285,000 | 266,130 |
Cook County, IL, County General Obligation, 6.5%, 11/15/2014 (a) | 18,560,000 | 21,781,830 |
Illinois, Development Finance Authority, Hospital Revenue, Adventist Health System, Sunbelt Obligation, 5.5%, 11/15/2020 | 10,000,000 | 10,498,800 |
Illinois, Health Facilities Authority, ETM, 7.0%, 2/15/2009 | 1,575,000 | 1,612,769 |
Illinois, Higher Education Revenue, Zero Coupon, 4/1/2015 (a) | 3,300,000 | 2,482,161 |
Illinois, Hospital & Healthcare Revenue, Development Finance Authority, Adventist Health System, 5.5%, 11/15/2029 | 5,475,000 | 5,748,093 |
Illinois, Hospital & Healthcare Revenue, Health Facilities Authority: |
|
|
5.2%, 9/1/2012 | 1,000,000 | 1,018,530 |
6.0%, 8/15/2009 (a) | 1,640,000 | 1,709,388 |
6.25%, 8/15/2013 (a) | 3,400,000 | 3,690,088 |
Series A, 6.25%, 1/1/2015 (a) | 17,000,000 | 18,562,130 |
6.4%, 6/1/2008 (a) | 1,350,000 | 1,370,250 |
Illinois, Metropolitan Pier and Exposition Authority: |
|
|
Series A, Zero Coupon, 6/15/2011 (a) | 895,000 | 790,133 |
Series A, ETM, Zero Coupon, 6/15/2011 (a) | 2,900,000 | 2,561,077 |
Illinois, Pollution Control Revenue, Development Finance Authority, 5.85%, 1/15/2014 (a) | 5,000,000 | 5,585,000 |
Illinois, Project Revenue, Zero Coupon, 1/1/2014 (a) | 17,975,000 | 14,268,914 |
Illinois, Project Revenue, Metropolitan Pier and Exposition Authority, Zero Coupon, 6/15/2016 (a) | 10,000,000 | 7,100,100 |
Illinois, Sales & Special Tax Revenue: |
|
|
6.25%, 12/15/2011 (a) | 3,000,000 | 3,207,510 |
6.25%, 12/15/2020 (a) | 6,975,000 | 8,261,818 |
Series A, 6.5%, 12/15/2007 (a) | 4,765,000 | 4,771,052 |
Series A, 6.5%, 12/15/2008 (a) | 5,255,000 | 5,423,265 |
Series P, 6.5%, 6/15/2013 | 2,100,000 | 2,277,051 |
Illinois, Sales & Special Tax Revenue, Metropolitan Pier and Exposition Authority, Zero Coupon, 6/15/2013 (a) | 7,565,000 | 6,180,832 |
Illinois, Special Assessment Revenue, Metropolitan Pier and Exposition Authority, Series A, Zero Coupon, 12/15/2018 (a) | 6,660,000 | 4,168,028 |
Illinois, State General Obligation, 5.5%, 5/1/2016 (a) | 2,500,000 | 2,828,325 |
Joliet, IL, Higher Education Revenue, College Assistance Corp., North Campus Extension Center Project, 6.7%, 9/1/2012 (a) | 1,795,000 | 1,966,297 |
Kane Cook & Du Page Counties, IL, School District General Obligation: |
|
|
Series B, Zero Coupon, 1/1/2011 (a) | 1,040,000 | 932,974 |
Series B, Zero Coupon, 1/1/2012 (a) | 1,300,000 | 1,122,732 |
Series B, Zero Coupon, 1/1/2013 (a) | 4,595,000 | 3,811,415 |
Kane County, IL, School District General Obligation, Aurora West Side, Series A, 6.5%, 2/1/2010 (a) | 1,775,000 | 1,893,836 |
Lake Cook Kane & McHenry Counties, IL, School District General Obligation, 6.3%, 12/1/2017 (a) | 1,885,000 | 2,281,453 |
Lake County, IL, Higher Education Revenue, District No. 117: |
|
|
Series B, Zero Coupon, 12/1/2013 (a) | 5,880,000 | 4,676,952 |
Series B, Zero Coupon, 12/1/2014 (a) | 5,985,000 | 4,541,598 |
Rosemont, IL, Capital Appreciation Tax: |
|
|
Series 3, Zero Coupon, 12/1/2007 (a) | 555,000 | 554,945 |
ETM, Series 3, Zero Coupon, 12/1/2007 (a) | 2,100,000 | 2,099,811 |
Skokie, IL, Other General Obligation, Park District, Series B, Zero Coupon, 12/1/2011 (a) | 3,000,000 | 2,597,670 |
University Park, IL, Sales & Special Tax Revenue, Governors Gateway Industrial Park, 8.5%, 12/1/2011 | 1,155,000 | 1,158,881 |
Will County, IL, County General Obligation: |
|
|
Series B, Zero Coupon, 12/1/2011 (a) | 4,145,000 | 3,584,886 |
Series B, Zero Coupon, 12/1/2012 (a) | 2,480,000 | 2,060,359 |
Series B, Zero Coupon, 12/1/2013 (a) | 12,030,000 | 9,568,662 |
Series B, Zero Coupon, 12/1/2014 (a) | 10,255,000 | 7,781,802 |
Will County, IL, School District General Obligation, Community Unit School District No. 365-U, Series B, Zero Coupon, 11/1/2015 (a) | 8,000,000 | 5,878,080 |
Winnebago County, IL, School District General Obligation, District No. 122 Harlem-Loves, 6.55%, 6/1/2010 (a) | 1,825,000 | 1,962,952 |
| 391,561,816 | |
Indiana 1.4% | ||
Indiana, Electric Revenue, Municipal Power Agency: |
|
|
Series B, 5.5%, 1/1/2016 (a) | 10,160,000 | 11,268,862 |
Series B, 6.0%, 1/1/2012 (a) | 1,750,000 | 1,911,333 |
Indiana, Health Facilities Financing Authority, ETM, 6.0%, 7/1/2010 (a) | 1,035,000 | 1,103,558 |
Indiana, Hospital & Healthcare Revenue, Health Facilities Finance Authority, Greenwood Village South Project, 5.625%, 5/15/2028 | 2,100,000 | 2,017,386 |
Indiana, Hospital & Healthcare Revenue, Health Facilities Financing Authority: |
|
|
Series D, 5.75%, 11/15/2012 | 4,660,000 | 4,877,622 |
Prerefunded, ETM, 6.0%, 7/1/2008 (a) | 945,000 | 959,137 |
ETM, 6.0%, 7/1/2008 (a) | 300,000 | 304,416 |
Prerefunded, ETM, 6.0%, 7/1/2009 (a) | 980,000 | 1,020,298 |
ETM, 6.0%, 7/1/2009 (a) | 310,000 | 322,307 |
ETM, 6.0%, 7/1/2010 (a) | 325,000 | 346,031 |
Prerefunded, ETM, 6.0%, 7/1/2011 (a) | 1,100,000 | 1,199,440 |
ETM, 6.0%, 7/1/2011 (a) | 345,000 | 374,363 |
Prerefunded, ETM, 6.0%, 7/1/2012 (a) | 1,165,000 | 1,295,457 |
ETM, 6.0%, 7/1/2012 (a) | 370,000 | 407,466 |
Prerefunded, ETM, 6.0%, 7/1/2013 (a) | 1,230,000 | 1,390,417 |
ETM, 6.0%, 7/1/2013 (a) | 390,000 | 435,193 |
Prerefunded, ETM, 6.0%, 7/1/2014 (a) | 1,310,000 | 1,502,347 |
ETM, 6.0%, 7/1/2014 (a) | 410,000 | 462,997 |
Prerefunded, ETM, 6.0%, 7/1/2015 (a) | 1,385,000 | 1,609,384 |
ETM, 6.0%, 7/1/2015 (a) | 440,000 | 502,172 |
Prerefunded, ETM, 6.0%, 7/1/2016 (a) | 1,470,000 | 1,725,574 |
ETM, 6.0%, 7/1/2016 (a) | 465,000 | 534,373 |
Prerefunded, ETM, 6.0%, 7/1/2017 (a) | 1,560,000 | 1,849,380 |
ETM, 6.0%, 7/1/2017 (a) | 490,000 | 567,376 |
Prerefunded, ETM, 6.0%, 7/1/2018 (a) | 1,655,000 | 1,975,441 |
ETM, 6.0%, 7/1/2018 (a) | 520,000 | 605,358 |
Indiana, Transportation/Tolls Revenue, Series A, 7.25%, 6/1/2015 | 3,120,000 | 3,670,555 |
Indiana, Transportation/Tolls Revenue, Transportation Authority: |
|
|
Series A, 5.75%, 6/1/2012 (a) | 4,550,000 | 4,994,307 |
Series A, Prerefunded, ETM, 7.25%, 6/1/2015 | 880,000 | 961,822 |
Indiana, Transportation/Tolls Revenue, Transportation Finance Authority, Series A, ETM, 5.75%, 6/1/2012 (a) | 450,000 | 484,673 |
Merrillville, IN, School District Revenue Lease, Multiple School Building Corp., First Mortgage, Zero Coupon, 1/15/2011 (a) | 4,000,000 | 3,584,560 |
| 54,263,605 | |
Iowa 0.2% | ||
Iowa, Project Revenue, 5.5%, 2/15/2016 (a) | 6,645,000 | 7,496,225 |
Kansas 0.6% | ||
Johnson County, KS, School District General Obligation, Series B, 5.5%, 9/1/2015 (a) | 1,860,000 | 2,113,555 |
Kansas, Pollution Control Revenue, Development Financing Authority: |
|
|
Series II, 5.5%, 5/1/2014 | 2,000,000 | 2,241,800 |
Series II, 5.5%, 11/1/2015 | 1,000,000 | 1,138,600 |
Series II, 5.5%, 11/1/2017 | 1,000,000 | 1,148,910 |
Overland Park, KS, Industrial Development Revenue, Series A, 7.375%, 1/1/2032 | 12,000,000 | 13,514,640 |
Saline County, KS, Unified School District No. 305: |
|
|
Prerefunded, 5.5%, 9/1/2017 (a) | 2,465,000 | 2,639,966 |
5.5%, 9/1/2017 (a) | 775,000 | 832,691 |
| 23,630,162 | |
Kentucky 2.3% | ||
Kentucky, Economic Development Finance Authority, Health Systems Revenue, Norton Healthcare: |
|
|
Series C, Prerefunded, 5.6%, 10/1/2012 (a) | 4,560,000 | 5,026,123 |
Series C, 5.6%, 10/1/2012 (a) | 9,110,000 | 9,939,101 |
Series C, Prerefunded, 5.7%, 10/1/2013 (a) | 2,750,000 | 3,084,455 |
Series C, 5.7%, 10/1/2013 (a) | 5,495,000 | 6,084,778 |
Series C, Prerefunded, 5.8%, 10/1/2014 (a) | 1,710,000 | 1,941,004 |
Series C, 5.8%, 10/1/2014 (a) | 3,420,000 | 3,817,507 |
Series C, Prerefunded, 5.85%, 10/1/2015 (a) | 1,745,000 | 1,985,321 |
Series C, 5.85%, 10/1/2015 (a) | 3,490,000 | 3,887,197 |
Series C, Prerefunded, 5.9%, 10/1/2016 (a) | 2,170,000 | 2,474,560 |
Series C, 5.9%, 10/1/2016 (a) | 4,330,000 | 4,811,236 |
Kentucky, Project Revenue: |
|
|
5.5%, 8/1/2017 (a) | 6,770,000 | 7,663,775 |
5.5%, 8/1/2018 (a) | 5,000,000 | 5,680,800 |
5.5%, 8/1/2019 (a) | 6,870,000 | 7,833,380 |
5.5%, 8/1/2020 (a) | 4,320,000 | 4,933,440 |
Kentucky, State Agency Revenue Lease, Property and Buildings Project No. 69, Series A, 5.375%, 8/1/2016 (a) | 2,095,000 | 2,238,005 |
Kentucky, State Agency Revenue Lease, Property and Buildings Project No. 71: |
|
|
5.5%, 8/1/2014 | 4,250,000 | 4,725,575 |
5.5%, 8/1/2015 | 4,000,000 | 4,480,400 |
Kentucky, State Revenue Lease, Property and Buildings Project No. 68, Prerefunded, 5.75%, 10/1/2015 | 5,375,000 | 5,736,738 |
| 86,343,395 | |
Louisiana 0.4% | ||
Jefferson, LA, Sales & Special Tax Revenue: |
|
|
5.75%, 12/1/2015 (a) | 2,335,000 | 2,599,672 |
5.75%, 12/1/2016 (a) | 2,465,000 | 2,744,408 |
5.75%, 12/1/2017 (a) | 2,610,000 | 2,905,844 |
5.75%, 12/1/2018 (a) | 2,760,000 | 3,072,846 |
Louisiana, Public Facilities Authority, Centenary College Louisiana Project: |
|
|
Prerefunded, 5.75%, 2/1/2012 | 1,000,000 | 1,013,650 |
Prerefunded, 5.9%, 2/1/2017 | 1,000,000 | 1,013,890 |
Orleans, LA, Sales & Special Tax Revenue, Levee District Improvement Project, 5.95%, 11/1/2014 (a) | 1,055,000 | 1,067,438 |
| 14,417,748 | |
Maine 0.1% | ||
Maine, Transportation/Tolls Revenue, Turnpike Authority, 5.625%, 7/1/2017 (a) | 4,350,000 | 4,644,713 |
Maryland 1.3% | ||
Baltimore, MD, Sales & Special Tax Revenue, Series A, 5.9%, 7/1/2012 (a) | 3,100,000 | 3,418,556 |
Maryland, Hospital & Healthcare Revenue, University of Maryland Medical System, 6.75%, 7/1/2030 | 4,000,000 | 4,380,720 |
Maryland, Project Revenue, Economic Development Corp., Chesapeake Bay, Series B, 7.75%, 12/1/2031 | 37,000,000 | 40,432,860 |
| 48,232,136 | |
Massachusetts 5.7% | ||
Massachusetts, Airport Revenue, Port Authority, Series B, AMT, 5.5%, 7/1/2012 (a) | 3,025,000 | 3,134,203 |
Massachusetts, Airport Revenue, Port Authority, Delta Air Lines, Inc. Project, Series A, AMT, 5.5%, 1/1/2017 (a) | 4,000,000 | 4,174,720 |
Massachusetts, Bay Transportation Authority Revenue, Series B, 6.2%, 3/1/2016 | 17,450,000 | 19,907,309 |
Massachusetts, Higher Education Revenue, College Building Authority Project, Series A, 7.5%, 5/1/2014 | 5,500,000 | 6,547,530 |
Massachusetts, Hospital & Healthcare Revenue, Health & Educational Facilities Authority, Massachusetts General Hospital, Series F, 6.25%, 7/1/2012 (a) | 760,000 | 810,054 |
Massachusetts, Industrial Development Revenue, Development Finance Agency, Series A, 7.1%, 7/1/2032 | 4,755,000 | 4,864,032 |
Massachusetts, Port Authority Revenue, ETM, 13.0%, 7/1/2013 | 1,055,000 | 1,362,638 |
Massachusetts, Port Authority Revenue, Delta Air Lines, Inc. Project, Series A, AMT, 5.5%, 1/1/2018 (a) | 5,000,000 | 5,214,600 |
Massachusetts, Project Revenue, 9.2%, 12/15/2031 | 17,000,000 | 21,504,320 |
Massachusetts, Project Revenue, Health & Educational Facilities Authority, Series B, 9.15%, 12/15/2023 | 3,000,000 | 3,788,220 |
Massachusetts, Sales & Special Tax Revenue, Federal Highway Grant, Series A, Zero Coupon, 12/15/2014 | 27,680,000 | 21,176,030 |
Massachusetts, State General Obligation, College Building Authority Project, Series A, 7.5%, 5/1/2010 | 4,110,000 | 4,514,136 |
Massachusetts, State General Obligation, Consolidated Loan: |
|
|
Series D, 5.5%, 11/1/2018 (a) | 4,000,000 | 4,597,200 |
Series D, 5.5%, 11/1/2019 (a) | 7,500,000 | 8,638,875 |
Series D, 5.5%, 11/1/2020 (a) | 2,000,000 | 2,307,980 |
Massachusetts, State General Obligation, Transportation Authority, Series A, 5.875%, 3/1/2015 | 10,075,000 | 11,360,167 |
Massachusetts, State Health & Educational Facilities Authority Revenue, Massachusetts Institute of Technology, Series K, 5.5%, 7/1/2022 | 9,000,000 | 10,507,860 |
Massachusetts, State Water Resource Authority: |
|
|
Prerefunded, Series C, 6.0%, 12/1/2011 | 6,095,000 | 6,553,222 |
Series C, 6.0%, 12/1/2011 | 3,905,000 | 4,187,956 |
Massachusetts, Transportation/Tolls Revenue, Turnpike Authority, Series C, Zero Coupon, 1/1/2018 (a) | 10,000,000 | 6,523,800 |
Massachusetts, Water & Sewer Revenue, Water Authority: |
|
|
Series J, 5.5%, 8/1/2020 (a) | 34,315,000 | 39,371,658 |
Series J, 5.5%, 8/1/2021 (a) | 5,685,000 | 6,533,771 |
Massachusetts, Water & Sewer Revenue, Water Resource Authority: |
|
|
Series A, 6.5%, 7/15/2009 | 2,625,000 | 2,758,639 |
Series A, 6.5%, 7/15/2019 | 13,710,000 | 16,408,402 |
| 216,747,322 | |
Michigan 1.5% | ||
Detroit, MI, Core City General Obligation, Series B, 6.0%, 4/1/2016 (a) | 2,865,000 | 3,067,613 |
Detroit, MI, School District General Obligation: |
|
|
Series C, 5.25%, 5/1/2014 (a) | 1,000,000 | 1,093,910 |
Series A, 5.5%, 5/1/2017 (a) | 3,295,000 | 3,594,285 |
Detroit, MI, Sewer Disposal Revenue, Series D, 4.105%**, 7/1/2032 (a) | 6,405,000 | 5,959,596 |
Detroit, MI, State General Obligation: |
|
|
Series A-1, 5.375%, 4/1/2016 (a) | 2,760,000 | 2,957,450 |
Series A-1, 5.375%, 4/1/2018 (a) | 3,000,000 | 3,187,410 |
Detroit, MI, Water & Sewer Revenue, Series A, Zero Coupon, 7/1/2015 (a) | 8,710,000 | 6,420,925 |
Grand Rapids, MI, Water & Sewer Revenue, Water Supply, 5.75%, 1/1/2016 (a) | 2,955,000 | 3,160,314 |
Michigan, Electric Revenue, Series A, 5.25%, 1/1/2018 (a) | 11,000,000 | 12,213,630 |
Michigan, Sales & Special Tax Revenue, State Trunk Line, Series A, 5.5%, 11/1/2017 | 7,000,000 | 7,974,330 |
Michigan, State General Obligation, 5.5%, 12/1/2015 | 5,875,000 | 6,643,861 |
Tawas City, MI, Hospital Finance Authority, St. Joseph Health Services, Series A, ETM, 5.6%, 2/15/2013 | 1,510,000 | 1,570,264 |
| 57,843,588 | |
Minnesota 0.3% | ||
University of Minnesota, Higher Education Revenue: |
|
|
Series A, 5.75%, 7/1/2017 | 3,240,000 | 3,790,379 |
Series A, 5.75%, 7/1/2018 | 6,760,000 | 7,961,252 |
| 11,751,631 | |
Missouri 1.2% | ||
Missouri, Hospital & Healthcare Revenue, Health & Educational Facilities Authority, Washington University, Series A, 5.5%, 6/15/2016 | 11,400,000 | 13,021,764 |
Missouri, Water & Sewer Revenue, Environmental Improvement and Energy Resource Authority: |
|
|
Series B, 5.5%, 7/1/2014 | 3,000,000 | 3,369,810 |
Series B, 5.5%, 7/1/2015 | 3,500,000 | 3,968,965 |
Series B, 5.5%, 7/1/2016 | 5,065,000 | 5,784,280 |
St. Louis, MO, Airport Revenue, Series A, 5.625%, 7/1/2017 (a) | 6,000,000 | 6,475,320 |
St. Louis, MO, Industrial Development Authority Revenue, Convention Center Hotel, Zero Coupon, 7/15/2016 (a) | 6,895,000 | 4,846,289 |
St. Louis, MO, Special Assessment Revenue, Scullin Redevelopment Area, Series A, 10.0%, 8/1/2010 | 2,925,000 | 3,188,806 |
St. Louis, MO, State General Obligation Lease, Industrial Development Authority, Convention Center Hotel, Zero Coupon, 7/15/2015 (a) | 4,200,000 | 3,100,608 |
| 43,755,842 | |
Montana 0.1% | ||
Montana, State Board of Regents Higher Education Revenue, University of Montana: |
|
|
Series F, Prerefunded, 6.0%, 5/15/2019 (a) | 455,000 | 492,788 |
Series F, 6.0%, 5/15/2019 (a) | 4,545,000 | 4,884,284 |
| 5,377,072 | |
Nebraska 0.4% | ||
Omaha, NE, Core City General Obligation, Series A, ETM, 6.5%, 12/1/2018 | 1,000,000 | 1,250,680 |
Omaha, NE, Public Power District, Electric Revenue, Series B, ETM, 6.2%, 2/1/2017 | 4,700,000 | 5,456,700 |
Omaha, NE, School District General Obligation, ETM: |
|
|
Series A, 6.5%, 12/1/2015 | 1,480,000 | 1,790,445 |
Series A, 6.5%, 12/1/2016 | 1,000,000 | 1,224,330 |
Series A, 6.5%, 12/1/2017 | 4,000,000 | 4,957,640 |
| 14,679,795 | |
Nevada 1.0% | ||
Clark County, NV, Airport Revenue, Airport Jet Aviation Fuel, AMT: |
|
|
Series C, 5.375%, 7/1/2018 (a) | 1,500,000 | 1,575,465 |
Series C, 5.375%, 7/1/2019 (a) | 1,100,000 | 1,151,458 |
Series C, 5.375%, 7/1/2020 (a) | 1,100,000 | 1,149,181 |
Henderson, NV, Health Care Facility Revenue, Catholic West: |
|
|
Series A, 5.375%, 7/1/2026 | 11,590,000 | 11,835,360 |
Series A, Prerefunded, 5.375%, 7/1/2026 | 3,410,000 | 3,475,779 |
Las Vegas, NV, Transportation/Tolls Revenue, Monorail Department Business and Industry: |
|
|
Zero Coupon, 1/1/2013 (a) | 5,000,000 | 4,128,750 |
7.375%, 1/1/2040 | 15,000,000 | 14,106,150 |
| 37,422,143 | |
New Jersey 5.4% | ||
Atlantic City, NJ, School District General Obligation, Board of Education, 6.1%, 12/1/2014 (a) | 4,500,000 | 5,214,105 |
New Jersey, Economic Development Authority Revenue, Cigarette Tax: |
|
|
5.5%, 6/15/2031 | 3,000,000 | 2,962,860 |
5.75%, 6/15/2034 | 2,455,000 | 2,462,218 |
New Jersey, Economic Development Authority Revenue, Motor Vehicle Surplus Revenue: |
|
|
Series A, 5.0%, 7/1/2022 (a) | 7,140,000 | 7,519,134 |
Series A, 5.0%, 7/1/2023 (a) | 8,845,000 | 9,265,757 |
New Jersey, Garden State Preservation Trust, Open Space & Farm Land, Series 2005-A, 5.8%, 11/1/2023 (a) | 5,000,000 | 5,697,250 |
New Jersey, Highway Authority Revenue, Garden State Parkway, ETM, 6.5%, 1/1/2011 | 1,875,000 | 1,957,237 |
New Jersey, Industrial Development Revenue, Economic Development Authority, Harrogate, Inc., Series A, 5.875%, 12/1/2026 | 1,000,000 | 1,002,330 |
New Jersey, Resource Recovery Revenue, Tobacco Settlement Financing Corp., 5.75%, 6/1/2032 | 7,960,000 | 8,622,511 |
New Jersey, Special Assessment Revenue, 6.75%, 6/1/2039 | 25,480,000 | 29,754,780 |
New Jersey, State Agency General Obligation Lease, Transportation Trust Fund Authority, Series A, 5.625%, 6/15/2014 | 3,555,000 | 4,014,270 |
New Jersey, State General Obligation: |
|
|
5.25%, 7/1/2016 | 5,000,000 | 5,581,050 |
Series H, 5.25%, 7/1/2017 | 14,665,000 | 16,309,680 |
New Jersey, State Turnpike Authority Revenue: |
|
|
Series C-2005, Prerefunded, ETM, 6.5%, 1/1/2016 (a) | 2,725,000 | 3,175,197 |
Series C-2005, 6.5%, 1/1/2016 (a) | 8,025,000 | 9,262,375 |
New Jersey, Tobacco Settlement Financing Corp.: |
|
|
Series 1-A, 5.0%, 6/1/2041 | 18,000,000 | 15,109,740 |
6.25%, 6/1/2043 | 18,000,000 | 20,571,300 |
New Jersey, Transportation/Tolls Revenue, Series A, 5.75%, 6/15/2017 | 8,000,000 | 9,155,920 |
New Jersey, Turnpike Authority Revenue, Series C, Prerefunded, ETM, 6.5%, 1/1/2016 (a) | 38,720,000 | 45,116,931 |
| 202,754,645 | |
New Mexico 0.1% | ||
Albuquerque, NM, Hospital & Healthcare Revenue, Southwest Community Health Services, Prerefunded, 10.125%, 8/1/2012 | 2,235,000 | 2,328,110 |
New Mexico, Single Family Housing Revenue, Mortgage Finance Authority, Series E2, AMT, 6.8%, 3/1/2031 | 2,480,000 | 2,483,497 |
| 4,811,607 | |
New York 6.1% | ||
New York, Electric Revenue, ETM, Zero Coupon, 6/1/2009 (a) | 2,050,000 | 1,950,739 |
New York, Higher Education Revenue, 5.75%, 7/1/2013 | 10,000,000 | 10,819,600 |
New York, Higher Education Revenue, Dormitory Authority, Series B, 5.25%, 5/15/2019 (a) | 11,860,000 | 13,108,265 |
New York, Higher Education Revenue, Dormitory Authority, City University: |
|
|
Series A, 5.625%, 7/1/2016 (a) | 5,075,000 | 5,675,778 |
Series B, 6.0%, 7/1/2014 (a) (b) | 7,000,000 | 7,584,990 |
New York, School District General Obligation, Dormitory Authority, City University, Series A, 5.5%, 5/15/2019 | 1,500,000 | 1,682,415 |
New York, Senior Care Revenue, Dormitory Authority, City University, Series A, 5.25%, 5/15/2021 | 2,000,000 | 2,205,300 |
New York, Senior Care Revenue, Metropolitan Transportation Authority, Series O, ETM, 5.75%, 7/1/2013 (a) | 6,775,000 | 7,277,095 |
New York, State Agency General Obligation Lease, Dormitory Authority, City University: |
|
|
Prerefunded, 5.25%, 5/15/2017 (a) | 3,500,000 | 3,703,630 |
Series D, ETM, 7.0%, 7/1/2009 (a) | 1,175,000 | 1,217,418 |
Series C, 7.5%, 7/1/2010 (a) | 3,185,000 | 3,372,246 |
New York, State Agency General Obligation Lease, Metropolitan Transportation Authority, Series A, ETM, 6.0%, 4/1/2020 (a) | 5,000,000 | 5,963,250 |
New York, State Agency General Obligation Lease, Urban Development Authority, Correctional Facilities, Series A, 6.5%, 1/1/2011 (a) | 4,500,000 | 4,923,900 |
New York, State Agency General Obligation Lease, Urban Development Corp., 5.7%, 4/1/2020 | 3,600,000 | 4,130,892 |
New York, State Dormitory Authority, Personal Income Tax Revenue, Series F, 5.0%, 3/15/2019 (a) | 3,000,000 | 3,198,300 |
New York, State General Obligation Lease, Urban Development Corp., State Facilities, 5.6%, 4/1/2015 | 4,655,000 | 5,149,454 |
New York, State General Obligation, Tobacco Settlement Financing Corp.: |
|
|
Series A-1, 5.25%, 6/1/2022 (a) | 2,600,000 | 2,765,048 |
Series A-1, 5.5%, 6/1/2019 | 6,850,000 | 7,340,802 |
New York, Tobacco Settlement Financing Corp., Series B-1C, 5.5%, 6/1/2019 | 10,000,000 | 10,716,500 |
New York, Transportation/Tolls Revenue, Metropolitan Transportation Authority: |
|
|
Series C, Prerefunded, 5.125%, 7/1/2013 (a) | 5,000,000 | 5,389,304 |
5.5%, 11/15/2018 (a) | 5,000,000 | 5,412,450 |
New York, Transportation/Tolls Revenue, Transportation Authority: |
|
|
Series E, 5.5%, 11/15/2020 (a) | 3,750,000 | 4,059,338 |
Series E, 5.5%, 11/15/2021 (a) | 6,000,000 | 6,494,940 |
New York, Transportation/Tolls Revenue, Triborough Bridge and Tunnel Authority, Series Y, ETM, 5.5%, 1/1/2017 | 5,050,000 | 5,669,989 |
New York, Water & Sewer Revenue, Environmental Facilities Corp., State Water Pollution Control, Series E, 6.875%, 6/15/2014 | 4,560,000 | 4,572,814 |
New York City, NY, Industrial Development Agency Revenue, Liberty-7, World Trade Center, Series A, 6.25%, 3/1/2015 | 10,000,000 | 10,393,100 |
New York City, NY, Industrial Development Agency, Special Facility Revenue, American Airlines, JFK International Airport, AMT, 7.75%, 8/1/2031 | 16,500,000 | 18,202,800 |
New York, NY, Core City General Obligation: |
|
|
Series G, Zero Coupon, 8/1/2009 (a) | 4,995,000 | 4,723,172 |
Series F, 5.25%, 8/1/2016 | 5,000,000 | 5,304,900 |
Series A, 5.75%, 8/1/2016 | 6,350,000 | 6,928,802 |
New York, NY, General Obligation: |
|
|
Series D, 5.0%, 8/1/2019 | 6,930,000 | 7,296,874 |
Series C, 5.375%, 11/15/2017 (a) | 3,510,000 | 3,550,576 |
Series A, Prerefunded, 6.5%, 5/15/2012 | 6,230,000 | 6,775,250 |
Series A, 6.5%, 5/15/2012 | 770,000 | 829,467 |
Series G, Prerefunded, ETM, 6.75%, 2/1/2009 | 105,000 | 109,221 |
Series G, 6.75%, 2/1/2009 | 1,895,000 | 1,966,953 |
New York, NY, State General Obligation, Series A, 5.25%, 3/15/2015 | 2,500,000 | 2,669,150 |
New York, NY, Water & Sewer Revenue, Municipal Water Finance Authority, Series A, 5.375%, 6/15/2019 | 25,000,000 | 26,816,500 |
| 229,951,222 | |
North Carolina 1.5% | ||
Charlotte, NC, Core City General Obligation, 5.5%, 8/1/2018 | 4,165,000 | 4,513,236 |
Charlotte, NC, Water & Sewer Revenue: |
|
|
5.5%, 6/1/2014 | 3,105,000 | 3,353,679 |
5.5%, 6/1/2017 | 3,255,000 | 3,511,234 |
North Carolina, Electric Revenue, 5.25%, 1/1/2020 (a) | 4,000,000 | 4,238,280 |
North Carolina, Electric Revenue, Catawba Municipal Power Agency, 6.0%, 1/1/2011 (a) | 8,235,000 | 8,890,835 |
North Carolina, Electric Revenue, Eastern Municipal Power Agency: |
|
|
6.0%, 1/1/2018 (a) | 8,775,000 | 10,287,196 |
Series B, 6.0%, 1/1/2022 (a) | 18,775,000 | 22,240,865 |
| 57,035,325 | |
Ohio 3.1% | ||
Akron, OH, Higher Education Revenue, Prerefunded, 5.75%, 1/1/2013 (a) | 2,365,000 | 2,508,082 |
Akron, OH, Project Revenue, Economic Development, 6.0%, 12/1/2012 (a) | 1,000,000 | 1,095,420 |
Avon, OH, School District General Obligation, 6.5%, 12/1/2015 (a) | 940,000 | 1,132,221 |
Beavercreek, OH, School District General Obligation, Local School District, 6.6%, 12/1/2015 (a) | 1,500,000 | 1,749,420 |
Big Walnut, OH, School District General Obligation, Local School District, Zero Coupon, 12/1/2012 (a) | 420,000 | 353,195 |
Buckeye, OH, Tobacco Settlement Financing Authority, Series A-2, 5.875%, 6/1/2030 | 47,025,000 | 45,823,041 |
Cincinnati, OH, Higher Education Revenue, General Receipts: |
|
|
Series T, 5.5%, 6/1/2012 | 1,280,000 | 1,392,294 |
Series A, 5.75%, 6/1/2015 (a) | 2,000,000 | 2,182,000 |
Series A, 5.75%, 6/1/2016 (a) | 1,500,000 | 1,636,500 |
Cincinnati, OH, Water & Sewer Revenue, 5.5%, 12/1/2017 | 1,000,000 | 1,073,860 |
Cleveland, OH, Electric Revenue, Public Power Systems Revenue, Series 1, 6.0%, 11/15/2011 (a) | 1,050,000 | 1,155,809 |
Cleveland, OH, Sales & Special Tax Revenue, Urban Renewal Tax Increment, Rock & Roll Hall of Fame and Museum Project, 6.75%, 3/15/2018 | 1,000,000 | 1,026,740 |
Cleveland, OH, Water & Sewer Revenue, Series J, 5.375%, 1/1/2016 (a) | 2,000,000 | 2,145,500 |
Cuyahoga County, OH, County General Obligation: |
|
|
Prerefunded, 5.0%, 12/1/2020 | 1,000,000 | 1,051,290 |
5.65%, 5/15/2018 | 500,000 | 574,780 |
Dublin City, OH, School District General Obligation, Capital Appreciation, ETM, Zero Coupon, 12/1/2011 (a) | 1,095,000 | 953,384 |
Fayette County, OH, School District General Obligation, Rattlesnake Improvement Area Project, 5.9%, 12/1/2013 | 65,000 | 68,043 |
Finneytown, OH, Other General Obligation, Local School District, 6.2%, 12/1/2017 (a) | 320,000 | 382,531 |
Franklin County, OH, Hospital & Healthcare Revenue, Presbyterian Services: |
|
|
5.25%, 7/1/2008 | 500,000 | 501,810 |
5.5%, 7/1/2017 | 1,000,000 | 1,010,490 |
Franklin County, OH, School District General Obligation, 6.5%, 12/1/2013 | 500,000 | 562,860 |
Green Springs, OH, Senior Care Revenue, Hospital & Healthcare Facilities Revenue, Series A, 7.0%, 5/15/2014 | 3,555,000 | 3,485,535 |
Green Springs, OH, Senior Care Revenue, St. Francis Health Care Center Project, Series A, 7.125%, 5/15/2025 | 4,405,000 | 4,231,002 |
Hilliard, OH, School District General Obligation, Series A, Zero Coupon, 12/1/2012 (a) | 1,655,000 | 1,374,957 |
Huber Heights, OH, Water & Sewer Revenue, Zero Coupon, 12/1/2012 (a) | 1,005,000 | 839,879 |
Liberty Benton, OH, School District General Obligation, Zero Coupon, 12/1/2014 (a) | 570,000 | 444,440 |
Liberty, OH, School District General Obligation, Zero Coupon, 12/1/2012 (a) | 255,000 | 211,851 |
Lorain County, OH, Lakeland Community Hospital, Inc., ETM, 6.5%, 11/15/2012 | 535,000 | 556,989 |
Napoleon, OH, Hospital & Healthcare Revenue, Lutheran Orphans Home, 6.875%, 8/1/2023 | 285,000 | 285,581 |
North Olmstead, OH, Other General Obligation, 6.2%, 12/1/2011 (a) | 2,000,000 | 2,133,460 |
Ohio, Higher Education Revenue, Series A, 6.5%, 7/1/2008 | 2,325,000 | 2,366,873 |
Ohio, Higher Education Revenue, Case Western Reserve University: |
|
|
6.0%, 10/1/2014 | 1,000,000 | 1,147,500 |
Series B, 6.5%, 10/1/2020 | 2,250,000 | 2,726,775 |
Ohio, Higher Education Revenue, General Receipts: |
|
|
Series A, 6.0%, 12/1/2016 | 1,000,000 | 1,062,640 |
Series A, 6.0%, 12/1/2017 | 1,060,000 | 1,126,398 |
Ohio, Higher Education Revenue, University of Ohio, General Receipts, 5.75%, 6/1/2016 (a) | 1,250,000 | 1,337,788 |
Ohio, Mortgage Revenue, Single Family Housing Finance Agency, Prerefunded, Zero Coupon, 1/15/2015 (a) | 7,875,000 | 5,431,543 |
Ohio, School District General Obligation, 6.0%, 12/1/2019 (a) | 475,000 | 553,304 |
Ohio, State Agency Revenue Lease, Building Authority, Juvenile Correctional Facility, Series A, 5.5%, 4/1/2016 | 3,665,000 | 3,924,152 |
Ohio, State General Obligation, 6.0%, 8/1/2010 | 1,000,000 | 1,071,440 |
Ohio, State General Obligation Lease, Higher Education Revenue, Series B, Prerefunded, 5.625%, 5/1/2015 | 1,000,000 | 1,056,120 |
Ohio, Transportation/Tolls Revenue, Series A, 5.5%, 2/15/2017 (a) | 6,925,000 | 7,851,080 |
Ohio, Water & Sewer Revenue, Bay Shore Project, Series A, AMT, 5.875%, 9/1/2020 | 3,650,000 | 3,662,921 |
Springboro, OH, School District General Obligation, Community City School District, 6.0%, 12/1/2011 (a) | 415,000 | 436,734 |
Toledo, OH, Other General Obligation, Macys Project, Series A, AMT, 6.35%, 12/1/2025 (a) | 1,000,000 | 1,021,820 |
Wayne, OH, School District General Obligation: |
|
|
6.45%, 12/1/2011 (a) | 125,000 | 133,715 |
6.6%, 12/1/2016 (a) | 200,000 | 236,416 |
Wooster, OH, School District General Obligation, Zero Coupon, 12/1/2013 (a) | 930,000 | 745,851 |
| 117,836,034 | |
Oklahoma 0.8% | ||
Oklahoma, Hospital & Healthcare Revenue, Valley View Hospital Authority, 6.0%, 8/15/2014 | 2,420,000 | 2,532,336 |
Oklahoma, Water & Sewer Revenue, McGee Creek Authority, 6.0%, 1/1/2023 (a) | 23,125,000 | 27,004,219 |
| 29,536,555 | |
Oregon 0.2% | ||
Chemeketa, OR, School District General Obligation, ETM, 5.5%, 6/1/2015 (a) | 2,600,000 | 2,941,432 |
Oregon, Transportation/Tolls Revenue: |
|
|
5.75%, 11/15/2015 | 1,435,000 | 1,536,010 |
5.75%, 11/15/2016 | 3,140,000 | 3,361,024 |
| 7,838,466 | |
Pennsylvania 2.2% | ||
Allegheny County, PA, Airport Revenue, Pittsburgh International, Series A, AMT, 5.75%, 1/1/2013 (a) | 3,080,000 | 3,350,824 |
Allegheny County, PA, Port Authority Revenue: |
|
|
5.5%, 3/1/2015 (a) | 2,000,000 | 2,147,400 |
5.5%, 3/1/2016 (a) | 1,000,000 | 1,074,020 |
5.5%, 3/1/2017 (a) | 1,000,000 | 1,074,020 |
Berks County, PA, Hospital & Healthcare Revenue, Municipal Authority, Reading Hospital & Medical Center Project, 5.7%, 10/1/2014 (a) | 1,000,000 | 1,085,430 |
Bucks County, PA, Water & Sewer Authority Revenue, ETM, 6.375%, 12/1/2008 | 15,000 | 15,061 |
Erie County, PA, Industrial Development Revenue, Pollution Control, Series A, 5.3%, 4/1/2012 | 1,000,000 | 1,028,160 |
Exter Township, PA, School District General Obligation, Zero Coupon, 5/15/2017 (a) | 3,700,000 | 2,476,521 |
Indiana County, PA, Pollution Control Revenue, Industrial Development Authority, 5.35%, 11/1/2010 (a) | 1,000,000 | 1,055,670 |
Latrobe, PA, Higher Education Revenue, Industrial Development Authority, 5.375%, 5/1/2013 | 1,000,000 | 1,053,020 |
New Castle, PA, Hospital & Healthcare Revenue, Area Hospital Authority, Jameson Memorial Hospital, 6.0%, 7/1/2010 (a) | 845,000 | 900,322 |
Pennsylvania, Core City General Obligation, Regional Finance Authority Local Government, 5.75%, 7/1/2032 | 28,000,000 | 32,687,760 |
Pennsylvania, Hospital & Healthcare Revenue, Economic Development Financing Authority, UPMC Health System, Series A, 6.0%, 1/15/2031 | 7,340,000 | 7,836,184 |
Pennsylvania, Sales & Special Tax Revenue, Convention Center Authority, Series A, ETM, 6.0%, 9/1/2019 (a) | 2,200,000 | 2,626,580 |
Pennsylvania, State Agency Revenue Lease, Industrial Development Authority, Economic Development, 5.8%, 7/1/2008 (a) | 4,875,000 | 4,942,324 |
Pennsylvania, State General Obligation, 6.25%, 7/1/2010 | 1,000,000 | 1,074,960 |
Pennsylvania, Transportation/Tolls Revenue, Community Turnpike, Series S, 5.625%, 6/1/2014 | 3,750,000 | 4,059,263 |
Pennsylvania, Water & Sewer Revenue, 5.25%, 11/1/2014 (a) | 1,750,000 | 1,936,480 |
Philadelphia, PA, Water & Sewer Revenue, 6.25%, 8/1/2010 (a) | 1,000,000 | 1,075,660 |
Pittsburgh, PA, Core City General Obligation, Series A, 5.5%, 9/1/2014 (a) | 1,500,000 | 1,604,145 |
Pittsburgh, PA, Water & Sewer System, ETM, 7.25%, 9/1/2014 (a) | 115,000 | 130,791 |
Westmoreland County, PA, Hospital & Healthcare Revenue, Industrial Development Authority, 5.375%, 7/1/2011 (a) | 5,120,000 | 5,313,638 |
Westmoreland County, PA, Project Revenue, Zero Coupon, 8/15/2017 (a) | 6,230,000 | 4,177,277 |
| 82,725,510 | |
Puerto Rico 0.3% | ||
Puerto Rico, Electric Revenue, 5.375%, 7/1/2018 (a) | 8,710,000 | 9,565,322 |
Puerto Rico, Public Buildings Authority Revenue, Government Facilities, Series A, ETM, 6.25%, 7/1/2013 (a) | 1,000,000 | 1,149,060 |
Puerto Rico Commonwealth, General Obligation, 6.25%, 7/1/2013 (a) | 1,850,000 | 2,107,557 |
| 12,821,939 | |
Rhode Island 1.0% | ||
Rhode Island, Economic Protection Corp., Special Obligation: |
|
|
Series B, ETM, 5.8%, 8/1/2011 (a) | 1,025,000 | 1,114,493 |
Series B, ETM, 5.8%, 8/1/2012 (a) | 2,500,000 | 2,771,150 |
Series B, ETM, 5.8%, 8/1/2013 (a) | 7,340,000 | 8,255,151 |
Rhode Island, Project Revenue, Convention Center Authority, Series B, 5.25%, 5/15/2015 (a) | 22,000,000 | 23,713,800 |
Rhode Island, Water & Sewer Revenue, Clean Water Protection Agency, Revolving Fund, Series A, 5.4%, 10/1/2015 (a) | 2,000,000 | 2,178,780 |
| 38,033,374 | |
South Carolina 1.0% | ||
Lexington County, SC, Hospital & Healthcare Revenue, 5.5%, 11/1/2032 | 4,515,000 | 4,995,170 |
Piedmont, SC, Electric Revenue, Municipal Power Agency: |
|
|
ETM, 5.5%, 1/1/2012 (a) | 2,190,000 | 2,374,880 |
5.5%, 1/1/2012 (a) | 2,810,000 | 3,027,157 |
Series A, ETM, 6.5%, 1/1/2016 (a) | 430,000 | 517,299 |
South Carolina, Jobs Economic Development Authority, Hospital Facilities Revenue, Palmetto Health Alliance: |
|
|
Series C, Prerefunded, 7.0%, 8/1/2030 | 6,885,000 | 8,131,460 |
Series C, 7.0%, 8/1/2030 | 855,000 | 1,007,387 |
Series A, Prerefunded, 7.375%, 12/15/2021 | 4,500,000 | 5,103,000 |
South Carolina, Piedmont Municipal Power Agency, Electric Revenue: |
|
|
Prerefunded, ETM, 6.75%, 1/1/2019 (a) | 1,460,000 | 1,842,856 |
6.75%, 1/1/2019 (a) | 2,065,000 | 2,545,381 |
South Carolina, Tobacco Settlement Revenue Management Authority, Series B, 6.0%, 5/15/2022 | 7,550,000 | 7,706,511 |
| 37,251,101 | |
Tennessee 0.8% | ||
Knox County, TN, Hospital & Healthcare Revenue, Sanders Alliance: |
|
|
5.75%, 1/1/2011 (a) | 15,405,000 | 16,463,632 |
5.75%, 1/1/2014 (a) | 2,000,000 | 2,224,420 |
6.25%, 1/1/2013 (a) | 4,000,000 | 4,481,600 |
7.25%, 1/1/2009 (a) | 3,750,000 | 3,902,400 |
Shelby County, TN, County General Obligation, Zero Coupon, 8/1/2014 | 4,965,000 | 3,867,685 |
| 30,939,737 | |
Texas 6.7% | ||
Abilene, TX, Senior Care Revenue, Sears Methodist Retirement, Health Facilities Development, Series A, 5.875%, 11/15/2018 | 3,250,000 | 3,277,462 |
Austin, TX, Project Revenue, Bergstrom Landhost Enterprises, Inc. Airport Hotel Project, Series A, 5.738% (f), 4/1/2027 | 21,615,000 | 16,314,354 |
Austin, TX, School District General Obligation, Independent School District, 5.0%, 8/1/2015 | 2,000,000 | 2,193,540 |
Austin, TX, Water & Sewer Revenue, Utility Systems, Zero Coupon, 11/15/2012 (a) | 13,520,000 | 11,272,706 |
Boerne, TX, School District General Obligation Lease, Independent School District: |
|
|
Zero Coupon, 2/1/2014 | 2,785,000 | 2,203,826 |
Zero Coupon, 2/1/2016 | 3,285,000 | 2,367,434 |
Brownsville, TX, Electric Revenue, Utility Systems, 6.25%, 9/1/2010 (a) | 4,085,000 | 4,405,509 |
Cypress and Fairbanks, TX, School District General Obligation, Cypress-Fairbanks Texas Independent School District: |
|
|
Series A, Zero Coupon, 2/15/2012 | 5,750,000 | 4,944,252 |
Series A, Zero Coupon, 2/15/2013 | 8,840,000 | 7,299,630 |
Series A, Zero Coupon, 2/15/2014 | 6,000,000 | 4,740,900 |
Dallas, TX, Single Family Housing Revenue, Zero Coupon, 10/1/2016 (a) | 915,000 | 372,680 |
Grapevine-Colleyville, TX, School District General Obligation, Zero Coupon, 8/15/2010 | 2,160,000 | 1,968,365 |
Harris County, TX, County General Obligation, Zero Coupon, 10/1/2017 (a) | 3,910,000 | 2,605,389 |
Harris County, TX, Hospital & Healthcare Revenue, Health Facilities Development Corp., Medical Center Project, 6.25%, 5/15/2010 (a) | 3,000,000 | 3,202,530 |
Hidalgo County, TX, Health Services, Mission Hospital: |
|
|
Prerefunded, 6.875%, 8/15/2026 | 1,320,000 | 1,351,271 |
6.875%, 8/15/2026 | 1,560,000 | 1,586,442 |
Houston, TX, School District General Obligation, Series A, Zero Coupon, 2/15/2015 | 26,000,000 | 18,278,260 |
Houston, TX, Utility Systems Revenue: |
|
|
Series A, 5.25%, 5/15/2020 (a) | 8,000,000 | 8,639,680 |
Series A, 5.25%, 5/15/2021 (a) | 10,000,000 | 10,799,600 |
Series A, 5.25%, 5/15/2022 (a) | 30,000,000 | 32,307,900 |
Houston, TX, Water & Sewer Revenue: |
|
|
Series C, Zero Coupon, 12/1/2009 (a) | 14,750,000 | 13,762,487 |
Series C, Zero Coupon, 12/1/2010 (a) | 5,000,000 | 4,498,250 |
Series C, Zero Coupon, 12/1/2012 (a) | 4,350,000 | 3,621,418 |
Series A, 5.5%, 12/1/2016 (a) | 10,000,000 | 10,787,500 |
Prerefunded, 5.75%, 12/1/2015 (a) | 5,000,000 | 5,566,750 |
Lubbock, TX, Health Facilities Development Corp., Methodist Hospital: |
|
|
Series B, ETM, 5.6%, 12/1/2007 (a) | 2,415,000 | 2,415,145 |
Series B, ETM, 5.625%, 12/1/2008 (a) | 4,400,000 | 4,497,988 |
Northeast, TX, Hospital & Healthcare Revenue, Northeast Medical Center, 6.0%, 5/15/2010 (a) | 2,180,000 | 2,314,942 |
Northside, TX, General Obligation Independent School District: |
|
|
Prerefunded, 5.5%, 2/15/2014 | 1,420,000 | 1,516,304 |
5.5%, 2/15/2014 | 1,265,000 | 1,345,429 |
Texas, Electric Revenue: |
|
|
ETM, Zero Coupon, 9/1/2017 (a) | 120,000 | 80,930 |
Zero Coupon, 9/1/2017 (a) | 5,880,000 | 3,931,603 |
Texas, Electric Revenue, Municipal Power Agency, Zero Coupon, 9/1/2016 (a) | 18,300,000 | 12,883,566 |
Texas, Municipal Gas Acquisition & Supply Corp. I, Gas Supply Revenue, Series B, 4.515%**, 12/15/2026 | 21,300,000 | 18,591,918 |
Texas, Municipal Power Agency, ETM, Zero Coupon, 9/1/2016 (a) | 375,000 | 266,284 |
Texas, Other General Obligation, 7.0%, 9/15/2012 | 4,871,212 | 4,922,847 |
Texas, SA Energy Acquisition Public Facility Corp., Gas Supply Revenue, 5.5%, 8/1/2025 | 10,000,000 | 10,443,600 |
Texas, School District General Obligation, Community College District, 5.5%, 8/15/2014 (a) | 3,145,000 | 3,419,967 |
Texas, Water & Sewer Revenue, Water Development Board, Series A, 5.625%, 7/15/2015 | 1,000,000 | 1,056,410 |
Waxahachie, TX, School District General Obligation, Independent School District: |
|
|
Zero Coupon, 8/15/2012 | 4,120,000 | 3,479,670 |
Zero Coupon, 8/15/2013 | 2,060,000 | 1,670,063 |
| 251,204,801 | |
Utah 0.1% | ||
Provo, UT, Electric Revenue, Series A, ETM, 10.375%, 9/15/2015 (a) | 1,230,000 | 1,578,201 |
Salt Lake City, UT, Core City General Obligation, 5.75%, 6/15/2014 | 25,000 | 26,468 |
Salt Lake City, UT, Hospital & Healthcare Revenue, IHC Hospitals, Inc., 6.15%, 2/15/2012 | 1,500,000 | 1,619,895 |
Utah, Electric Revenue, Intermountain Power Agency, Series A, ETM, 5.0%, 7/1/2012 (a) | 540,000 | 540,664 |
| 3,765,228 | |
Vermont 0.3% | ||
Burlington, VT, Electric Revenue: |
|
|
5.375%, 7/1/2013 (a) | 4,800,000 | 5,197,152 |
5.375%, 7/1/2014 (a) | 5,055,000 | 5,471,027 |
| 10,668,179 | |
Virgin Islands 0.0% | ||
Virgin Islands, Sales & Special Tax Revenue, Public Finance Authority, Series A, 6.5%, 10/1/2024 | 1,500,000 | 1,646,175 |
Virginia 0.8% | ||
Fairfax County, VA, Hospital & Healthcare Revenue, Economic Development Authority, Greenspring Retirement Community, Series A, 7.25%, 10/1/2019 | 2,000,000 | 2,168,720 |
Fairfax County, VA, Hospital & Healthcare Revenue, Economic Development Finance Authority, Series A, 7.5%, 10/1/2029 | 7,100,000 | 7,730,196 |
Roanoke, VA, Hospital & Healthcare Revenue, Industrial Development Authority, Roanoke Memorial Hospital, Series B, 6.125%, 7/1/2017 (a) | 5,500,000 | 6,422,790 |
Virginia, Tobacco Settlement Financing Corp., Series B-1, 5.0%, 6/1/2047 | 4,800,000 | 3,987,504 |
Virginia Beach, VA, Hospital & Healthcare Revenue, Development Authority Hospital Facility First Mortgage, 5.125%, 2/15/2018 (a) | 3,000,000 | 3,263,340 |
Winchester, VA, Hospital & Healthcare Revenue, Industrial Development Authority, 5.5%, 1/1/2015 (a) | 5,700,000 | 6,291,261 |
| 29,863,811 | |
Washington 3.1% | ||
Chelan County, WA, Electric Revenue, Public Utilities, Columbia River Rock, Zero Coupon, 6/1/2014 (a) | 12,685,000 | 9,817,302 |
Clark County, WA, Electric Revenue, Public Utilities District No. 001 Generating Systems, ETM, 6.0%, 1/1/2008 (a) | 2,200,000 | 2,204,752 |
Clark County, WA, General Obligation Hockinson School District No. 98: |
|
|
6.125%, 12/1/2011 (a) | 1,515,000 | 1,636,170 |
Prerefunded, 6.125%, 12/1/2011 (a) | 1,675,000 | 1,811,965 |
Clark County, WA, School District General Obligation, Zero Coupon, 12/1/2017 (a) | 6,725,000 | 4,398,419 |
King and Snohomish Counties, WA, School District General Obligation, No. 417 Northshore, 5.6%, 12/1/2010 (a) | 1,650,000 | 1,733,143 |
King County, WA, County General Obligation: |
|
|
Prerefunded, 6.625%, 12/1/2015 | 1,010,000 | 1,030,291 |
Series B, Prerefunded, 6.625%, 12/1/2015 | 8,835,000 | 9,012,495 |
Port Seattle, WA, Airport Revenue, Series B, AMT, 6.0%, 2/1/2014 (a) | 4,000,000 | 4,462,920 |
Seattle, WA, Airport Revenue, Series B, AMT, 6.0%, 2/1/2012 (a) | 1,765,000 | 1,919,702 |
Skagit County, WA, School District General Obligation, District No. 100 Burlington Edison, 5.625%, 12/1/2015 (a) | 4,925,000 | 5,287,381 |
Snohomish County, WA, School District General Obligation, 5.75%, 12/1/2011 (a) | 3,485,000 | 3,789,763 |
Snohomish County, WA, School District General Obligation, School District No. 006 Mukilteo, 6.5%, 12/1/2007 (a) | 3,325,000 | 3,325,266 |
Spokane County, WA, School District General Obligation, Series B, Zero Coupon, 12/1/2014 (a) | 2,500,000 | 1,897,075 |
Washington, Electric Revenue, Series A, 5.5%, 7/1/2017 (a) | 11,200,000 | 12,051,200 |
Washington, Electric Revenue, Public Power Supply System Nuclear Project # 2, ETM, 5.7%, 7/1/2008 (a) | 1,270,000 | 1,287,272 |
Washington, Electric Revenue, Public Power Supply Systems: |
|
|
Series A, Zero Coupon, 7/1/2010 (a) | 5,860,000 | 5,361,138 |
Series A, Zero Coupon, 7/1/2011 (a) | 4,200,000 | 3,703,392 |
Series B, 7.25%, 7/1/2009 (a) | 5,540,000 | 5,752,404 |
Washington, Hospital & Healthcare Revenue, HealthCare Facilities Authority: |
|
|
5.8%, 11/1/2008 (a) | 4,865,000 | 4,969,014 |
5.8%, 11/1/2009 (a) | 4,595,000 | 4,799,386 |
5.8%, 11/1/2010 (a) | 2,100,000 | 2,242,191 |
Washington, State General Obligation, Series 5, Zero Coupon, 1/1/2017 (a) | 4,535,000 | 3,083,755 |
Washington, State Health Care Facilities Authority Revenue, Series B, 5.0%, 2/15/2027 (a) (c) | 7,800,000 | 7,922,382 |
Washington, State Health Care Facilities Authority Revenue, Virginia Mason Medical Center, Series A, 6.125%, 8/15/2037 (c) | 12,035,000 | 11,831,607 |
| 115,330,385 | |
West Virginia 0.1% | ||
West Virginia, Hospital & Healthcare Revenue, Hospital Finance Authority, Charleston Medical Center, 6.75%, 9/1/2030 | 590,000 | 648,416 |
West Virginia, Hospital Finance Authority, Charleston Medical Center, Prerefunded, 6.75%, 9/1/2030 | 2,410,000 | 2,650,614 |
| 3,299,030 | |
Wisconsin 2.0% | ||
Milwaukee County, WI, Series A, Prerefunded, ETM, Zero Coupon, 12/1/2011 (a) | 220,000 | 191,171 |
Milwaukee, WI, General Obligation, Series V8, 3.58%*, 2/1/2025 | 1,900,000 | 1,900,000 |
Wisconsin, Hospital & Healthcare Revenue, Health & Education Facilities Authority: |
|
|
6.0%, 11/15/2008 (a) | 4,085,000 | 4,183,653 |
6.1%, 8/15/2008 (a) | 4,580,000 | 4,664,776 |
6.1%, 8/15/2009 (a) | 2,000,000 | 2,089,000 |
Series B, ETM, 6.25%, 1/1/2022 (a) | 4,615,000 | 5,354,508 |
Series C, 6.25%, 1/1/2022 (a) | 8,060,000 | 9,481,461 |
Series AA, 6.4%, 6/1/2008 (a) | 2,335,000 | 2,369,208 |
Series AA, 6.45%, 6/1/2009 (a) | 2,485,000 | 2,595,085 |
Series AA, 6.45%, 6/1/2010 (a) | 2,650,000 | 2,844,934 |
Series AA, 6.5%, 6/1/2011 (a) | 2,820,000 | 3,102,000 |
Series AA, 6.5%, 6/1/2012 (a) | 3,000,000 | 3,362,370 |
Wisconsin, Hospital & Healthcare Revenue, Health & Education Facilities Authority, Aurora Health Care, Inc.: |
|
|
Series A, 5.6%, 2/15/2029 | 17,800,000 | 17,905,732 |
6.875%, 4/15/2030 | 14,000,000 | 15,082,900 |
| 75,126,798 | |
Total Municipal Bonds and Notes (Cost $3,137,767,575) | 3,390,485,114 | |
| ||
Municipal Inverse Floating Rate Notes 21.3% | ||
California 2.6% | ||
California, San Francisco Bay Area Toll Authority, Toll Bridge Revenue, Series F, 5.0%, 4/1/2031 (d) | 10,700,000 | 11,215,633 |
Trust: California, Bay Area Toll Authority, Toll Bridge Revenue, Series 1962-4, 144A, 8.66%, 4/1/2031, Leverage Factor at purchase date: 4 to 1 |
|
|
California, State Economic Recovery, Series A, 5.0%, 7/1/2015 (a) (d) | 17,000,000 | 18,493,110 |
Trust: California, General Obligation, Economic Recovery, Series R-278, 144A, 6.145%,7/1/2015, Leverage Factor at purchase date: 2 to 1 |
|
|
California, State Department Water Resource, Power Supply Revenue, Series A, 5.375%, 5/1/2018 (a) (d) | 11,250,000 | 12,326,512 |
Trust: California, State Department Water Resource, Power Supply Revenue, Series 309,144A, 6.905%, 5/1/2018, Leverage Factor at purchase date: 2 to 1 |
|
|
California, State Economic Recovery, Series A, 5.25%, 7/1/2015 (a) (d) | 11,955,000 | 13,160,064 |
Trust: California, State Economic Recovery, Series 926, 144A, 6.442%, 7/1/2015, Leverage Factor at purchase date: 2 to 1 |
|
|
California, State General Obligation, 5.0%, 3/1/2027 (d) | 10,000,000 | 10,206,000 |
Trust: California, UBS Municipal (CRVS), Various States, Series 07-1031A, 144A, 9.72%, 3/1/2027, Leverage Factor at purchase date: 5 to 1 |
|
|
California, State General Obligation, 5.0%, 3/1/2025 (d) | 10,000,000 | 10,261,060 |
Trust: California, UBS Municipal (CRVS), Various States, Series 07-1031B, 144A, 9.72%, 3/1/2025, Leverage Factor at purchase date: 5 to 1 |
|
|
Los Angeles, CA, Unified School District, Series A, 5.25%, 7/1/2019 (a) (d) | 10,000,000 | 10,968,400 |
Trust: Los Angeles, CA, Higher Education Revenue, Unified School District, RITES-PA 117, 144A, 6.57%, 7/1/2019, Leverage Factor at purchase date: 2 to 1 |
|
|
Los Angeles, CA, Unified School District, Series A, 5.25%, 7/1/2020 (a) (d) | 2,750,000 | 3,016,310 |
Trust: Los Angeles, CA, Higher Education Revenue, Unified School District, RITES-PA 117, 144A, 6.57%,7/1/2020, Leverage Factor at purchase date: 2 to 1 |
|
|
San Francisco, CA, City & County Airports Commission, International Airport Revenue, Series 32G, 5.0%, 5/1/2026 (a) (d) | 8,580,000 | 9,013,091 |
Trust: San Francisco, CA, City & County Airports Commission, International Airport Revenue, Series 2054, 144A, 10.638%, 5/1/2026, Leverage Factor at purchase date: 6 to 1 |
|
|
| 98,660,180 | |
Colorado 0.3% | ||
Denver, CO, City & County, Airport Revenue, Series A, 6.0%, 11/15/2013 (a) (d) | 10,000,000 | 10,632,950 |
Trust: Denver, CO, Airport Revenue, RITES-PA 762, 144A, AMT, 7.965%, 11/15/2013, Leverage Factor at purchase date: 2 to 1 |
|
|
Connecticut 0.7% | ||
Connecticut, State Special Tax Revenue, Transportation Infrastructure, Series B, 5.375%, 10/1/2014 (a) (d) | 16,780,000 | 17,980,357 |
Trust: Connecticut, Sales & Special Tax Revenue, Series II-R-122, 144A, 6.88%, 10/1/2014, Leverage Factor at purchase date: 2 to 1 |
|
|
Connecticut, State Special Tax Revenue, Transportation Infrastructure, Series B, 5.375%, 10/1/2015 (a) (d) | 4,000,000 | 4,286,140 |
Trust: Connecticut, Sales & Special Tax Revenue, Series II-R-122, 144A, 6.88%, 10/1/2015, Leverage Factor at purchase date: 2 to 1 |
|
|
Connecticut, State Special Tax Revenue, Transportation Infrastructure, Series A, 5.375%, 10/1/2016 (a) (d) | 2,100,000 | 2,262,382 |
Trust: Connecticut, Sales & Special Tax Revenue, Series II-R-122, 144A, 6.88%, 10/1/2016, Leverage Factor at purchase date: 2 to 1 |
|
|
Connecticut, State Special Tax Revenue, Transportation Infrastructure, Series A, 5.375%, 10/1/2017 (a) (d) | 1,660,000 | 1,788,360 |
Trust: Connecticut, Sales & Special Tax Revenue, Series II-R-122, 144A, 6.88%, 10/1/2017, Leverage Factor at purchase date: 2 to 1 |
|
|
| 26,317,239 | |
District of Columbia 0.6% | ||
District of Columbia, Water & Sewer Authority, Public Utility Revenue, 6.0%, 10/1/2016 (a) (d) | 5,500,000 | 6,436,678 |
Trust: District of Columbia, Water & Sewer Authority, Public Utility Revenue, Series 16, 144A, 8.105%, 10/1/2016, Leverage Factor at purchase date: 2 to 1 |
|
|
District of Columbia, Water & Sewer Authority, Public Utility Revenue, 6.0%, 10/1/2013 (a) (d) | 2,420,000 | 2,744,933 |
Trust: District of Columbia, Water & Sewer Authority, Public Utility Revenue, Series 13, 144A, 8.105%, 10/1/2013, Leverage Factor at purchase date: 2 to 1 |
|
|
District of Columbia, Water & Sewer Authority, Public Utility Revenue, 6.0%, 10/1/2015 (a) (d) | 7,135,000 | 8,283,670 |
Trust: District of Columbia, Water & Sewer Authority, Public Utility Revenue, Series 15, 144A, 8.113%, 10/1/2015, Leverage Factor at purchase date: 2 to 1 |
|
|
District of Columbia, Water & Sewer Authority, Public Utility Revenue, 6.0%, 10/1/2014 (a) (d) | 3,945,000 | 4,523,711 |
Trust: District of Columbia, Water & Sewer Authority, Public Utility Revenue, Series 14, 144A, 8.12%, 10/1/2014, Leverage Factor at purchase date: 2 to 1 |
|
|
| 21,988,992 | |
Florida 0.4% | ||
Lee County, FL, Airport Revenue, AMT, Series A, 6.0%, 10/1/2013 (a) (d) | 7,920,000 | 8,472,658 |
Trust: Lee County, FL, Airport Revenue, AMT, Series 14, 144A, 8.02%, 10/1/2013, Leverage Factor at purchase date: 2 to 1 |
|
|
Lee County, FL, Airport Revenue, AMT, Series A, 6.0%, 10/1/2020 (a) (d) | 2,820,000 | 2,985,872 |
Trust: Lee County, FL, Airport Revenue, AMT, Series 14, 144A, 8.02%, 10/1/2020, Leverage Factor at purchase date: 2 to 1 |
|
|
Lee County, FL, Airport Revenue, AMT, Series A, 6.125%, 10/1/2015 (a) (d) | 3,000,000 | 3,198,855 |
Trust: Lee County, FL, Airport Revenue, AMT, Series 14, 144A, 8.27%, 10/1/2015, Leverage Factor at purchase date: 2 to 1 |
|
|
| 14,657,385 | |
Georgia 0.3% | ||
Georgia, Municipal Electric Authority, Power Revenue, Series B, 6.375%, 1/1/2016 (a) (d) | 9,200,000 | 10,923,666 |
Trust: Georgia, Municipal Electric Authority, Power Revenue, RITES-PA 786, 144A, 8.675%, 1/1/2016, Leverage Factor at purchase date: 2 to 1 |
|
|
Illinois 2.0% | ||
Chicago, IL, General Obligation, Series A, 5.0%, 1/1/2025 (a) (d) | 13,985,000 | 14,753,970 |
Trust: Chicago, IL, UBS Municipal (CRVS), Various States, Series 07-1027B, 144A, 8.482%, 1/1/2025, Leverage Factor at purchase date: 4 to 1 |
|
|
Cook County, IL, Capital Improvement, 6.5%, 11/15/2013 (a) (d) | 21,220,000 | 24,503,158 |
Trust: Cook County, IL, County General Obligation, RITES-PA 591, 144A, 9.015%, 11/15/2013, Leverage Factor at purchase date: 2 to 1 |
|
|
Illinois, Municipal Electric Agency Power Supply, Series A, 5.25%, 2/1/2023 (a) (d) | 3,500,000 | 3,751,843 |
Illinois, Municipal Electric Agency Power Supply, Series A, 5.25%, 2/1/2024 (a) (d) | 2,500,000 | 2,679,888 |
Trust: Illinois, Municipal Electric Agency Power Supply, Series 2094, 144A, 9.45%, 2/1/2023, Leverage Factor at purchase date: 4 to 1 |
|
|
Illinois, Regional Transportation Authority, Series A, 6.7%, 11/1/2021 (a) (d) | 25,800,000 | 31,761,993 |
Trust: Illinois, Transportation/Tolls Revenue, Regional Transportation Authority, RITES-PA 584, 144A, 9.415%, 11/1/2021, Leverage Factor at purchase date: 2 to 1 |
|
|
| 77,450,852 | |
Massachusetts 1.7% | ||
Massachusetts, State Development Finance Agency, Resource Recovery Revenue, Series A, 5.625%, 1/1/2015 (a) (d) | 4,000,000 | 4,335,280 |
Massachusetts, State Development Finance Agency, Resource Recovery Revenue, Series A, 5.625%, 1/1/2016 (a) (d) | 2,750,000 | 2,980,505 |
Trust: Massachusetts, State Development Finance Agency, Resource Recovery Revenue, Series 563, 144A, 7.365%, 1/1/2015, Leverage Factor at purchase date: 2 to 1 |
|
|
Massachusetts, State General Obligation, Series C, Prerefunded, 5.75%, 10/1/2015 (d) | 12,190,000 | 12,989,969 |
Trust: Massachusetts, State General Obligation, RITES-PA 793, 144A, 7.465%, 10/1/2015, Leverage Factor at purchase date: 2 to 1 |
|
|
Massachusetts, State General Obligation, Series C, 5.0%, 8/1/2026 (a) (d) | 20,000,000 | 21,153,700 |
Trust: Massachusetts, State General Obligation, Series 2022-1, 144A, 15.62%, 8/1/2026, Leverage Factor at purchase date: 10 to 1 |
|
|
Massachusetts, State General Obligation, Series C, 5.0%, 8/1/2027 (a) (d) | 20,000,000 | 21,153,700 |
Trust: Massachusetts, State General Obligation, Series 2022-2, 144A, 15.62%, 8/1/2027, Leverage Factor at purchase date: 10 to 1 |
|
|
| 62,613,154 | |
Michigan 0.2% | ||
Michigan, State Grant Anticipation Bonds, 5.25%, 9/15/2023 (a) (d) | 7,500,000 | 8,211,562 |
Trust: Michigan State, Series 2081, 144A, 9.48%, 9/15/2023, Leverage Factor at purchase date: 4 to 1 |
|
|
Nevada 1.2% | ||
Clark County, NV, School District, Series C, 5.0%, 6/15/2021 (d) | 16,121,277 | 17,243,381 |
Clark County, NV, School District, Series C, 5.0%, 6/15/2022 (d) | 16,844,280 | 18,016,708 |
Clark County, NV, School District, Series C, 5.0%, 6/15/2023 (d) | 10,878,667 | 11,635,865 |
Trust: Clark County, NV, Lehman Municipal Trust Receipts, Various States, Series K76W, 144A, 17.137%, 6/15/2021, Leverage Factor at purchase date: 8.5 to 1 |
|
|
| 46,895,954 | |
New Jersey 3.4% | ||
New Jersey, Highway Authority Revenue, Garden State Parkway, 5.5%, 1/1/2013 (a) (d) | 9,000,000 | 10,051,245 |
New Jersey, Highway Authority Revenue, Garden State Parkway, 5.5%, 1/1/2014 (a) (d) | 8,000,000 | 8,934,440 |
New Jersey, Highway Authority Revenue, Garden State Parkway, 5.5%, 1/1/2015 (a) (d) | 5,500,000 | 6,142,427 |
New Jersey, Highway Authority Revenue, Garden State Parkway, 5.5%, 1/1/2016 (a) (d) | 7,370,000 | 8,230,853 |
Trust: New Jersey, Highway Authority Revenue, Garden State Parkway, Series 247, ETM, 144A, 7.163%, 1/1/2013, Leverage Factor at purchase date: 2 to 1 |
|
|
New Jersey, State Transportation Trust Fund Authority, Series A, 5.75%, 6/15/2016 (d) | 4,000,000 | 4,645,120 |
New Jersey, State Transportation Trust Fund Authority, Series A, 5.75%, 6/15/2017 (d) | 4,000,000 | 4,645,120 |
New Jersey, State Transportation Trust Fund Authority, Series A, 5.75%, 6/15/2018 (d) | 3,000,000 | 3,483,840 |
New Jersey, State Transportation Trust Fund Authority, Series A, 5.75%, 6/15/2020 (d) | 11,000,000 | 12,774,080 |
Trust: New Jersey, State Agency Revenue, Transportation Trust Fund Authority, Residual Certificates, Series 224, 144A, 7.605%, 6/15/2016, Leverage Factor at purchase date: 2 to 1 |
|
|
New Jersey, State Transportation Corporate Certificates, Series B, 6.0%, 9/15/2015 (a) (d) | 10,380,000 | 11,131,045 |
Trust: New Jersey, State Revenue Lease, Transportation Trust Fund Authority, RITES-PA 785, 144A, 7.965%, 9/15/2015, Leverage Factor at purchase date: 2 to 1 |
|
|
New Jersey, State Turnpike Authority Revenue, Series C, 6.5%, 1/1/2016 (a) (d) | 7,660,000 | 8,841,134 |
Trust: New Jersey, Transportation/Tolls Revenue, Turnpike Authority, RITES-PA 614, 144A, 8.945%, 1/1/2016, Leverage Factor at purchase date: 2 to 1 |
|
|
New Jersey, State Turnpike Authority Revenue, Prerefunded, Series C, 6.5%, 1/1/2016 (a) (d) | 42,340,000 | 48,868,617 |
Trust: New Jersey, Transportation/Tolls Revenue, Turnpike Authority, RITES-PA 613, 144A, 9.045%, 1/1/2016, Leverage Factor at purchase date: 2 to 1 |
|
|
| 127,747,921 | |
New York 0.8% | ||
Monroe County, NY, Airport Authority Revenue, Greater Rochester International Airport, AMT, 5.75%, 1/1/2014 (a) (d) | 4,010,000 | 4,406,048 |
Trust: Monroe County, NY, Airport Revenue, RITES-PA 585A, AMT, 144A, 7.555%, 1/1/2014, Leverage Factor at purchase date: 2 to 1 |
|
|
Monroe County, NY, Airport Authority Revenue, Greater Rochester International Airport, AMT, 5.75%, 1/1/2015 (a) (d) | 5,030,000 | 5,565,041 |
Trust: Monroe County, NY, Airport Revenue, RITES-PA 585B, AMT, 144A, 7.555%, 1/1/2015, Leverage Factor at purchase date: 2 to 1 |
|
|
Monroe County, NY, Airport Authority Revenue, Greater Rochester International Airport, AMT, 5.875%, 1/1/2016 (a) (d) | 3,830,000 | 4,293,717 |
Trust: Monroe County, NY, Airport Revenue, RITES-PA 585C, AMT, 144A, 7.805%, 1/1/2016, Leverage Factor at purchase date: 2 to 1 |
|
|
New York, Metropolitan Transportation Authority Revenue, Series A, 5.5%, 11/15/2017 (a) (d) | 15,000,000 | 16,340,250 |
Trust: New York, Municipal Securities Trust Certificates, Series 7001-B, 144A, 7.14%, 11/15/2017, Leverage Factor at purchase date: 2 to 1 |
|
|
| 30,605,056 | |
Ohio 0.5% | ||
Columbus, OH, General Obligation, Series A, 5.0%, 9/1/2021 (d) | 8,725,000 | 9,453,126 |
Columbus, OH, General Obligation, Series A, 5.0%, 9/1/2022 (d) | 8,725,000 | 9,453,126 |
Trust: Columbus, OH, General Obligation, Series 2365, 8.477%, 9/1/2021, Leverage Factor at purchase date: 4 to 1 |
|
|
| 18,906,252 | |
Pennsylvania 1.9% | ||
Allegheny County, PA, Airport Revenue, Pittsburgh International Airport, Series A-1, AMT, 5.75%, 1/1/2011 (a) (d) | 3,000,000 | 3,181,290 |
Trust: Allegheny County, PA, Airport Revenue, AMT, RITES-PA 567B, 144A, 7.485%, 1/1/2011, Leverage Factor at purchase date: 2 to 1 |
|
|
Allegheny County, PA, Airport Revenue, Pittsburgh International Airport, Series A-1, AMT, 5.75%, 1/1/2013 (a) (d) | 6,320,000 | 6,875,749 |
Trust: Allegheny County, PA, Airport Revenue, AMT, RITES-PA 567C, 144A, 7.485%, 1/1/2013, Leverage Factor at purchase date: 2 to 1 |
|
|
Allegheny County, PA, Airport Revenue, Pittsburgh International Airport, Series A-1, AMT, 5.75%, 1/1/2014 (a) (d) | 10,500,000 | 11,537,033 |
Trust: Allegheny County, PA, Airport Revenue, AMT, RITES-PA 567D, 144A, 7.485%, 1/1/2014, Leverage Factor at purchase date: 2 to 1 |
|
|
Delaware Valley, PA, Regional Financial Authority, Local Government Revenue, 5.75%, 7/1/2017 (d) | 25,000,000 | 28,518,375 |
Trust: Delaware Valley, PA, Core City General Obligation, Regional Financial Authority, RITES-PA 1028, 144A, 7.55%, 7/1/2017, Leverage Factor at purchase date: 2 to 1 |
|
|
Pennsylvania, State General Obligation, Series 2, 5.5%, 5/1/2019 (a) (d) | 20,000,000 | 21,816,500 |
Trust: Pennsylvania, State General Obligation, RITES-PA 1035R, 144A, 10.129%, 5/1/2019, Leverage Factor at purchase date: 4 to 1 |
|
|
| 71,928,947 | |
Puerto Rico 1.9% | ||
Puerto Rico Commonwealth, Public Improvements, Series A, 5.5%, 7/1/2019 (a) (d) | 7,440,000 | 8,330,754 |
Trust: Puerto Rico, Sales & Special Tax Revenue, RITES-PA 944RA, 144A, 7.11%, 7/1/2019, Leverage Factor at purchase date: 2 to 1 |
|
|
Puerto Rico Commonwealth, Public Improvements, Series A, 5.5%, 7/1/2019 (a) (d) | 22,650,000 | 25,517,150 |
Trust: Puerto Rico, Sales & Special Tax Revenue, RITES-PA 943R, 144A, 7.11%, 7/1/2019, Leverage Factor at purchase date: 2 to 1 |
|
|
Puerto Rico Commonwealth, Public Improvements, Series A, 5.5%, 7/1/2021 (a) (d) | 6,000,000 | 6,771,150 |
Trust: Puerto Rico, Sales & Special Tax Revenue, RITES-PA 994RC, 144A, 7.11%, 7/1/2021, Leverage Factor at purchase date: 2 to 1 |
|
|
Puerto Rico Commonwealth, General Obligation, 6.0%, 7/1/2013 (a) (d) | 5,000,000 | 5,633,150 |
Trust: Puerto Rico, Sales & Special Tax Revenue, RITES-PA 620A, 144A, 8.095%, 7/1/2013, Leverage Factor at purchase date: 2 to 1 |
|
|
Puerto Rico Commonwealth, Highway & Transportation Authority Revenue, 5.5%, 7/1/2028 (a) (d) | 19,500,000 | 22,214,843 |
Trust: Puerto Rico, UBS Municipal (CRVS), Various States, Series 07-1036, 144A, 14.024%, 7/1/2028, Leverage Factor at purchase date: 6 to 1 |
|
|
Puerto Rico Commonwealth, General Obligation, 6.0%, 7/1/2016 (a) (d) | 2,000,000 | 2,333,260 |
Trust: Puerto Rico Commonwealth, General Obligation, RITES-PA 620C, 144A, 8.095%, 7/1/2016, Leverage Factor at purchase date: 2 to 1 |
|
|
| 70,800,307 | |
Tennessee 0.5% | ||
Knox County, TN, Health, Educational, & Housing Facilities, Hospital Revenue, Fort Sanders Alliance, 5.75%, 1/1/2012 (a) (d) | 17,880,000 | 19,395,241 |
Trust: Knox County, TN, Hospital & Healthcare Revenue, RITES-PA 750, 144A, 7.535%, 1/1/2012, Leverage Factor at purchase date: 2 to 1 |
|
|
Texas 2.3% | ||
Dallas County, TX, Utility & Reclamation District, 5.25%, 2/15/2018 (a) (d) | 7,830,000 | 8,348,150 |
Trust: Dallas County, TX, Utility & Reclamation District, RITES-A-PA 1136, 144A, 6.5%, 2/15/2018, Leverage Factor at purchase date: 2 to 1 |
|
|
Dallas County, TX, Utility & Reclamation District, 5.25%, 2/15/2019 (a) (d) | 8,220,000 | 8,763,958 |
Trust: Dallas County, TX, Utility & Reclamation District, RITES-B-PA 1136, 144A, 6.5%, 2/15/2019, Leverage Factor at purchase date: 2 to 1 |
|
|
Dallas, County TX, Utility & Reclamation District, 5.25%, 2/15/2020 (a) (d) | 10,250,000 | 10,928,294 |
Trust: Dallas County, TX, Utility & Reclamation District, RITES-C-PA 1136, 144A, 6.5%, 2/15/2020, Leverage Factor at purchase date: 2 to 1 |
|
|
Houston, TX, Airport Systems Revenue, Series B, 5.0%, 7/1/2027 (a) (d) | 21,025,000 | 21,617,649 |
Trust: Houston, TX, UBS Municipal (CRVS), Various States, Series 07-1030, 144A, 9.641%, 7/1/2027, Leverage Factor at purchase date: 5 to 1 |
|
|
Texas, Dallas-Fort Worth International Airport Revenue, AMT, Series A, 5.5%, 11/1/2019 (a) (d) | 15,750,000 | 16,651,924 |
Texas, Dallas-Fort Worth International Airport Revenue, AMT, Series A, 5.5%, 11/1/2020 (a) (d) | 20,000,000 | 21,145,300 |
Trust: Texas, Dallas-Fort Worth International Airport Revenue, Series 350, AMT, 144A, 7.062%, 11/1/2019, Leverage Factor at purchase date: 2 to 1 |
|
|
| 87,455,275 | |
Total Municipal Inverse Floating Rate Notes (Cost $761,804,700) | 805,190,933 | |
| ||
Government & Agency Obligations 0.1% | ||
US Treasury Bill, 3.7%***, 1/17/2008 (e) (Cost $1,943,483) | 1,952,000 | 1,944,721 |
| % of Net Assets | Value ($) |
|
| |
Total Investment Portfolio (Cost $3,901,515,758)+ | 111.1 | 4,197,620,768 |
Other Assets and Liabilities, Net | (11.1) | (420,133,857) |
Net Assets | 100.0 | 3,777,486,911 |
** Floating rate notes are securities whose yields vary with a designated market index or market rate, such as the coupon-equivalent of the US Treasury bill rate. These securities are shown at their current rate as of November 30, 2007.
*** Annualized yield at time of purchase; not a coupon rate.
+ The cost for federal income tax purposes was $3,896,220,234. At November 30, 2007, net unrealized appreciation for all securities based on tax cost was $301,400,534. This consisted of aggregate gross unrealized appreciation for all securities in which there was an excess of value over tax cost of $317,401,799 and aggregate gross unrealized depreciation for all securities in which there was an excess of tax cost over value of $16,001,265.
(a) Bond is insured by one of these companies:
Insurance Coverage | As a % of Total Investment Portfolio |
| Ambac Financial Group | 10.2 |
| Financial Guaranty Insurance Company | 11.0 |
| Financial Security Assurance Inc. | 10.2 |
| MBIA Corp. | 29.2 |
| XL Capital Assurance | 0.2 |
(c) When-issued security.
(d) Security forms part of the below tender option bond trust. The principal amount and value shown take into account the leverage factor.
(e) At November 30, 2007, this security has been pledged, in whole or in part, to cover initial margin requirements for open futures contracts.
(f) Partial interest paying security. The rate shown represents 85% of the original coupon rate.
144A: Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers.
AMT: Subject to alternative minimum tax.
CRVS: Custodial Residual and Variable Securities
ETM: Bonds bearing the description ETM (escrow to maturity) are collateralized usually by US Treasury securities which are held in escrow and used to pay principal and interest on bonds so designated.
Prerefunded: Bonds which are prerefunded are collateralized usually by US Treasury securities which are held in escrow and are used to pay principal and interest on tax-exempt issues and to retire the bonds in full at the earliest refunding date.
RITES: Residual Interest Tax Exempt Security
At November 30, 2007, open futures contracts sold were as follows:
Futures | Expiration Date | Contracts | Aggregated Face Value ($) | Value ($) | Unrealized |
| 10 Year US Treasury Note | 3/19/2008 | 357 | 40,111,212 | 40,413,516 | (302,304) |
At November 30, 2007, open interest rate swaps were as follows:
Effective/ | Notional Amount ($) | Cash Flows Paid by the Fund | Cash Flows Received by the Fund | Unrealized Depreciation ($) |
5/16/2008 | 9,700,0001 | Fixed — 5.237% | Floating — LIBOR | (443,069) |
5/19/2008 | 5,100,0002 | Fixed — 5.237% | Floating — LIBOR | (226,974) |
5/30/2008 | 43,150,0001 | Fixed — 4.948% | Floating -— LIBOR | (363,409) |
Total unrealized depreciation on open interest rate swaps | (1,033,452) | |||
| Counterparties: 1 JPMorgan Chase Bank, N.A. 2 Lehman Brothers, Inc. LIBOR: Represents the London InterBank Offered Rate. | ||||
The accompanying notes are an integral part of the financial statements.
Statement of Assets and Liabilities as of November 30, 2007 (Unaudited) | |
Assets | |
| Investments in securities, at value (cost $3,901,515,758) | $ 4,197,620,768 |
| Receivable for investments sold | 430,000 |
| Interest receivable | 57,935,941 |
| Receivable for Fund shares sold | 1,090,083 |
| Receivable for daily variation margin on open futures contracts | 22,313 |
| Other assets | 56,407 |
| Total assets | 4,257,155,512 |
Liabilities | |
| Cash overdraft | 2,705,022 |
| Payable for investments purchased | 7,748,100 |
| Payable for investments purchased — when issued securities | 19,638,279 |
| Distributions payable | 1,881,502 |
| Payable for floating rate notes issued | 439,361,726 |
| Payable for Fund shares redeemed | 4,795,017 |
| Unrealized depreciation on swap contracts | 1,033,452 |
| Accrued management fee | 1,055,563 |
| Other accrued expenses and payables | 1,449,940 |
| Total liabilities | 479,668,601 |
Net assets, at value | $ 3,777,486,911 |
Net Assets Consist of: | |
| Undistributed net investment income | 614,801 |
| Net unrealized appreciation (depreciation) on: Investments | 296,105,010 |
Futures | (302,304) |
Interest rate swaps | (1,033,452) |
| Accumulated net realized gain (loss) | (12,809,985) |
| Paid-in capital | 3,494,912,841 |
Net assets, at value | $ 3,777,486,911 |
The accompanying notes are an integral part of the financial statements.
Statement of Assets and Liabilities as of November 30, 2007 (Unaudited) (continued) | |
Net Asset Value | |
Class A Net Asset Value and redemption price(a) per share ($1,785,352,046 ÷ 198,393,792 outstanding shares of beneficial interest, $.01 par value, unlimited number of shares authorized) | $ 9.00 |
| Maximum offering price per share (100 ÷ 95.5 of $9.00) | $ 9.42 |
Class B Net Asset Value, offering and redemption price(a) (subject to contingent deferred sales charge) per share ($14,922,112 ÷ 1,657,945 outstanding shares of beneficial interest, $.01 par value, unlimited number of shares authorized) | $ 9.00 |
Class C Net Asset Value, offering and redemption price(a) (subject to contingent deferred sales charge) per share ($22,600,240 ÷ 2,511,772 outstanding shares of beneficial interest, $.01 par value, unlimited number of shares authorized) | $ 9.00 |
Class S Net Asset Value, offering and redemption price(a) per share ($1,950,950,463 ÷ 216,506,426 outstanding shares of beneficial interest, $.01 par value, unlimited number of shares authorized) | $ 9.01 |
Institutional Class Net Asset Value, offering and redemption price(a) per share ($3,662,050 ÷ 406,954 outstanding shares of beneficial interest, $.01 par value, unlimited number of shares authorized) | $ 9.00 |
The accompanying notes are an integral part of the financial statements.
Statement of Operations for the six months ended November 30, 2007 (Unaudited) | |
Investment Income | |
| Income: Interest | $ 105,288,989 |
| Expenses: Management fee | 6,228,778 |
| Administration fee | 1,898,025 |
| Services to shareholders | 1,474,352 |
| Custodian fee | 47,198 |
| Distribution and service fees | 2,350,968 |
| Professional fees | 98,026 |
| Trustees' fees and expenses | 75,702 |
| Reports to shareholders | 125,530 |
| Interest expense and fees on floating rate notes | 6,705,854 |
| Registration fees | 46,439 |
| Other | 121,683 |
| Total expenses before expense reductions | 19,172,555 |
| Expense reductions | (621,626) |
| Total expenses after expense reductions | 18,550,929 |
Net investment income | 86,738,060 |
Realized and Unrealized Gain (Loss) | |
| Net realized gain (loss) from: Investments | 8,443,046 |
| Futures | (9,237,181) |
| Interest rate swaps | 5,202,971 |
| | 4,408,836 |
| Change in net unrealized appreciation (depreciation) on: Investments | 7,273,522 |
| Futures | (302,304) |
| Interest rate swaps | (2,872,162) |
| | 4,099,056 |
Net gain (loss) | 8,507,892 |
Net increase (decrease) in net assets resulting from operations | $ 95,245,952 |
The accompanying notes are an integral part of the financial statements.
Statement of Cash Flows for the six months ended November 30, 2007 (Unaudited) | |
Cash Flows from Operating Activities: | |
| Investment income received* | $ 98,631,369 |
| Payment of operating expenses | (11,764,499) |
| Payment of interest expense on floating rate notes | (6,705,854) |
| Proceeds from sales and maturities of investments | 1,081,070,590 |
| Purchases of investments | (1,131,426,677) |
| Net purchases, sales and maturities of short-term investments | (1,926,286) |
| Net receipt (payment) on swap contracts | 5,202,971 |
| Net receipt (payment) on futures contracts | (9,561,798) |
Cash provided (used) by operating activities | $ 23,519,816 |
Cash Flows from Financing Activities: | |
| Net increase (decrease) in payable for floating rate notes issued | 139,249,226 |
| Proceeds from shares sold | 140,727,101 |
| Cost of shares redeemed | (269,305,001) |
| Distributions paid (net of reinvestment of distributions) | (35,307,041) |
Cash provided (used) by financing activities | (24,635,715) |
| Increase (decrease) in cash | (1,115,899) |
| Cash (overdraft) at beginning of period | (1,589,123) |
Cash (overdraft) at end of period | $ (2,705,022) |
Reconciliation of Net Increase (Decrease) in Net Assets Resulting from Operations to Cash Provided (Used) by Operating Activities: | |
| Increase (decrease) in net assets resulting from operations | $ 95,245,952 |
| (Increase) decrease in cost of investments | (100,978,763) |
| (Increase) decrease in unrealized appreciation (depreciation) on investments | (7,273,522) |
| (Increase) decrease in unrealized appreciation (depreciation) on interest rate swaps | 2,872,162 |
| (Increase) decrease in receivable for investments sold | 3,697,887 |
| (Increase) decrease in interest receivable | 2,511,458 |
| (Increase) decrease in other assets | 35,703 |
| Increase (decrease) in payable for investments purchased | 27,386,379 |
| (Increase) decrease in daily variation margin on open futures contracts | (22,313) |
| Increase (decrease) in accrued expenses and payables | 44,873 |
Cash provided (used) by operating activities | $ 23,519,816 |
Non-Cash Financing Activities: | |
| Reinvestment of distributions | $ 56,033,462 |
The accompanying notes are an integral part of the financial statements.
Statement of Changes in Net Assets | ||
Increase (Decrease) in Net Assets | Six Months Ended November 30, 2007 (Unaudited) | Year Ended May 31, 2007 |
| Operations: Net investment income | $ 86,738,060 | $ 175,912,778 |
| Net realized gain (loss) | 4,408,836 | 6,999,379 |
| Change in net unrealized appreciation (depreciation) | 4,099,056 | (6,363,006) |
| Net increase (decrease) in net assets resulting from operations | 95,245,952 | 176,549,151 |
| Distributions to shareholders from: Net investment income: Class A | (39,874,619) | (81,134,304) |
Class B | (307,545) | (798,783) |
Class C | (409,815) | (781,530) |
Class AARP | — | (7,707,402) |
Class S | (45,484,775) | (83,654,513) |
Institutional Class | (83,971) | (145,018) |
| Net realized gains: Class A | (1,887,516) | (11,303,769) |
Class B | (15,784) | (134,424) |
Class C | (23,835) | (129,588) |
Class AARP | — | — |
Class S | (2,057,143) | (12,041,412) |
Institutional Class | (3,863) | (13,596) |
| Total distributions | (90,148,866) | (197,844,339) |
| Fund share transactions: Proceeds from shares sold | 139,557,086 | 137,657,733 |
| Reinvestment of distributions | 56,033,462 | 121,849,776 |
| Cost of shares redeemed | (271,419,924) | (493,717,543) |
| Redemption fees | 1,153 | 6,885 |
| Net increase (decrease) in net assets from Fund share transactions | (75,828,223) | (234,203,149) |
Increase (decrease) in net assets | (70,731,137) | (255,498,337) |
| Net assets at beginning of period | 3,848,218,048 | 4,103,716,385 |
| Net assets at end of period (including undistributed net investment income of $614,801 and $37,466, respectively) | $ 3,777,486,911 | $ 3,848,218,048 |
The accompanying notes are an integral part of the financial statements.
Class A Years Ended May 31, | 2007a | 2007 | 2006 | 2005 | 2004 | 2003 |
Selected Per Share Data | ||||||
Net asset value, beginning of period | $ 8.99 | $ 9.04 | $ 9.20 | $ 9.04 | $ 9.50 | $ 9.12 |
Income from investment operations: Net investment income | .20 | .39 | .40 | .42 | .43 | .42 |
Net realized and unrealized gain (loss) | .02 | .00*** | (.16) | .16 | (.46) | .41 |
Total from investment operations | .22 | .39 | .24 | .58 | (.03) | .83 |
Less distributions from: Net investment income | (.20) | (.39) | (.40) | (.42) | (.43) | (.42) |
Net realized gains | (.01) | (.05) | (.00)*** | (.00)*** | — | (.03) |
Total distributions | (.21) | (.44) | (.40) | (.42) | (.43) | (.45) |
| Redemption fees | .00*** | .00*** | .00*** | .00*** | — | — |
Net asset value, end of period | $ 9.00 | $ 8.99 | $ 9.04 | $ 9.20 | $ 9.04 | $ 9.50 |
| Total Return (%)b | 2.45c** | 4.36c | 2.65c | 6.53 | (.31) | 9.41 |
Ratios to Average Net Assets and Supplemental Data | ||||||
| Net assets, end of period ($ millions) | 1,785 | 1,843 | 1,949 | 2,147 | 2,183 | 2,454 |
| Ratio of expenses before expense reductions (including interest expense) (%)d | 1.11* | 1.04 | 1.11 | .88 | .84 | .87 |
| Ratio of expenses after expense reductions (including interest expense) (%)d | 1.08* | 1.02 | 1.09 | .88 | .84 | .87 |
| Ratio of expenses after expense reductions (excluding interest expense) (%) | .73* | .73 | .74 | .74 | .75 | .75 |
| Ratio of net investment income (%) | 4.47* | 4.29 | 4.38 | 4.56 | 4.61 | 4.66 |
| Portfolio turnover rate (%) | 28** | 19 | 28 | 31 | 24 | 22 |
| a For the six months ended November 30, 2007 (Unaudited). b Total return does not reflect the effect of any sales charges. c Total return would have been lower had certain expenses not been reduced. d Interest expense represents interest and fees on short term floating rate notes issued in conjunction with inverse floating rate securities. Interest income from such transactions is included in income from investment operations. * Annualized. ** Not annualized. *** Amount is less than $.005. | ||||||
Class B Years Ended May 31, | 2007a | 2007 | 2006 | 2005 | 2004 | 2003 |
Selected Per Share Data | ||||||
Net asset value, beginning of period | $ 8.99 | $ 9.04 | $ 9.20 | $ 9.04 | $ 9.50 | $ 9.11 |
Income from investment operations: Net investment income | .17 | .32 | .33 | .35 | .36 | .35 |
Net realized and unrealized gain (loss) | .01 | .00*** | (.16) | .16 | (.46) | .42 |
Total from investment operations | .18 | .32 | .17 | .51 | (.10) | .77 |
Less distributions from: Net investment income | (.16) | (.32) | (.33) | (.35) | (.36) | (.35) |
Net realized gains | (.01) | (.05) | (.00)*** | (.00)*** | — | (.03) |
Total distributions | (.17) | (.37) | (.33) | (.35) | (.36) | (.38) |
| Redemption fees | .00*** | .00*** | .00*** | .00*** | — | — |
Net asset value, end of period | $ 9.00 | $ 8.99 | $ 9.04 | $ 9.20 | $ 9.04 | $ 9.50 |
| Total Return (%)b | 2.07c** | 3.59c | 1.88c | 5.70c | (1.07) | 8.52 |
Ratios to Average Net Assets and Supplemental Data | ||||||
| Net assets, end of period ($ millions) | 15 | 19 | 26 | 34 | 47 | 66 |
| Ratio of expenses before expense reductions (including interest expense (%)d | 1.93* | 1.84 | 1.88 | 1.68 | 1.61 | 1.65 |
| Ratio of expenses after expense reductions (including interest expense (%)d | 1.83* | 1.77 | 1.84 | 1.67 | 1.61 | 1.65 |
| Ratio of expenses after expense reductions (excluding interest expense) (%) | 1.48* | 1.48 | 1.49 | 1.53 | 1.52 | 1.53 |
| Ratio of net investment income (%) | 3.72* | 3.54 | 3.63 | 3.77 | 3.84 | 3.88 |
| Portfolio turnover rate (%) | 28** | 19 | 28 | 31 | 24 | 22 |
| a For the six months ended November 30, 2007 (Unaudited). b Total return does not reflect the effect of any sales charges. c Total return would have been lower had certain expenses not been reduced. d Interest expense represents interest and fees on short term floating rate notes issued in conjunction with inverse floating rate securities. Interest income from such transactions is included in income from investment operations. * Annualized. ** Not annualized. *** Amount is less than $.005. | ||||||
Class C Years Ended May 31, | 2007a | 2007 | 2006 | 2005 | 2004 | 2003 |
Selected Per Share Data | ||||||
Net asset value, beginning of period | $ 8.99 | $ 9.04 | $ 9.20 | $ 9.04 | $ 9.50 | $ 9.11 |
Income from investment operations: Net investment income | .17 | .32 | .33 | .35 | .36 | .35 |
Net realized and unrealized gain (loss) | .01 | .00*** | (.16) | .16 | (.46) | .42 |
Total from investment operations | .18 | .32 | .17 | .51 | (.10) | .77 |
Less distributions from: Net investment income | (.16) | (.32) | (.33) | (.35) | (.36) | (.35) |
Net realized gains | (.01) | (.05) | (.00)*** | (.00)*** | — | (.03) |
Total distributions | (.17) | (.37) | (.33) | (.35) | (.36) | (.38) |
| Redemption fees | .00*** | .00*** | .00*** | .00*** | — | — |
Net asset value, end of period | $ 9.00 | $ 8.99 | $ 9.04 | $ 9.20 | $ 9.04 | $ 9.50 |
| Total Return (%)b | 2.07c** | 3.59c | 1.86c | 5.72 | (1.09) | 8.52 |
Ratios to Average Net Assets and Supplemental Data | ||||||
| Net assets, end of period ($ millions) | 23 | 22 | 22 | 24 | 25 | 24 |
| Ratio of expenses before expense reductions (including interest expense) (%)d | 1.87* | 1.81 | 1.88 | 1.65 | 1.63 | 1.68 |
| Ratio of expenses after expense reductions (including interest expense) (%)d | 1.84* | 1.78 | 1.85 | 1.65 | 1.63 | 1.68 |
| Ratio of expenses after expense reductions (excluding interest expense) (%) | 1.49* | 1.49 | 1.50 | 1.51 | 1.54 | 1.56 |
| Ratio of net investment income (%) | 3.71* | 3.53 | 3.62 | 3.80 | 3.82 | 3.85 |
| Portfolio turnover rate (%) | 28** | 19 | 28 | 31 | 24 | 22 |
| a For the six months ended November 30, 2007 (Unaudited). b Total return does not reflect the effect of any sales charges. c Total return would have been lower had certain expenses not been reduced. d Interest expense represents interest and fees on short term floating rate notes issued in conjunction with inverse floating rate securities. Interest income from such transactions is included in income from investment operations. * Annualized. ** Not annualized. *** Amount is less than $.005. | ||||||
Class S Years Ended May 31, | 2007a | 2007 | 2006 | 2005 | 2004 | 2003 |
Selected Per Share Data | ||||||
Net asset value, beginning of period | $ 9.00 | $ 9.05 | $ 9.21 | $ 9.05 | $ 9.50 | $ 9.12 |
Income from investment operations: Net investment income | .21 | .41 | .42 | .44 | .45 | .44 |
Net realized and unrealized gain (loss) | .02 | .00*** | (.16) | .16 | (.45) | .41 |
Total from investment operations | .23 | .41 | .26 | .60 | — | .85 |
Less distributions from: Net investment income | (.21) | (.41) | (.42) | (.44) | (.45) | (.44) |
Net realized gains | (.01) | (.05) | (.00)*** | (.00)*** | — | (.03) |
Total distributions | (.22) | (.46) | (.42) | (.44) | (.45) | (.47) |
| Redemption fees | .00*** | .00*** | .00*** | .00*** | — | — |
Net asset value, end of period | $ 9.01 | $ 9.00 | $ 9.05 | $ 9.21 | $ 9.05 | $ 9.50 |
| Total Return (%) | 2.57b** | 4.59b | 2.88 | 6.81 | (.01)b | 9.49 |
Ratios to Average Net Assets and Supplemental Data | ||||||
| Net assets, end of period ($ millions) | 1,951 | 1,961 | 771 | 789 | 798 | 837 |
| Ratio of expenses before expense reductions (including interest expense) (%)c | .90* | .82 | .86 | .63 | .65 | .68 |
| Ratio of expenses after expense reductions (including interest expense) (%)c | .86* | .79 | .86 | .63 | .64 | .68 |
| Ratio of expenses after expense reductions (excluding interest expense) (%) | .51* | .50 | .51 | .49 | .55 | .56 |
| Ratio of net investment income (%) | 4.69* | 4.52 | 4.61 | 4.82 | 4.81 | 4.85 |
| Portfolio turnover rate (%) | 28** | 19 | 28 | 31 | 24 | 22 |
| a For the six months ended November 30, 2007 (Unaudited). b Total return would have been lower had certain expenses not been reduced. c Interest expense represents interest and fees on short term floating rate notes issued in conjunction with inverse floating rate securities. Interest income from such transactions is included in income from investment operations. * Annualized. ** Not annualized. *** Amount is less than $.005. | ||||||
Institutional Class Years Ended May 31, | 2007a | 2007 | 2006 | 2005 | 2004 | 2003b |
Selected Per Share Data | ||||||
Net asset value, beginning of period | $ 8.99 | $ 9.04 | $ 9.21 | $ 9.05 | $ 9.50 | $ 9.33 |
Income from investment operations: Net investment income | .21 | .41 | .42 | .45 | .44 | .31 |
Net realized and unrealized gain (loss) | .02 | .00*** | (.17) | .16 | (.45) | .20 |
Total from investment operations | .23 | .41 | .25 | .61 | (.01) | .51 |
Less distributions from: Net investment income | (.21) | (.41) | (.42) | (.45) | (.44) | (.31) |
Net realized gains | (.01) | (.05) | (.00)*** | (.00)*** | — | (.03) |
Total distributions | (.22) | (.46) | (.42) | (.45) | (.44) | (.34) |
| Redemption fees | .00*** | .00*** | .00*** | .00*** | — | — |
Net asset value, end of period | $ 9.00 | $ 8.99 | $ 9.04 | $ 9.21 | $ 9.05 | $ 9.50 |
| Total Return (%) | 2.58** | 4.62 | 2.82 | 6.86c | (.06)c | 5.94** |
Ratios to Average Net Assets and Supplemental Data | ||||||
| Net assets, end of period ($ millions) | 4 | 4 | 4 | .45 | .01 | .001 |
| Ratio of expenses before expense reductions (including interest expense) (%)d | .84* | .78 | .88 | .66 | .75 | .66* |
| Ratio of expenses after expense reductions (including interest expense) (%)d | .84* | .78 | .88 | .63 | .63 | .66* |
| Ratio of expenses after expense reductions (excluding interest expense) (%) | .49* | .49 | .53 | .49 | .54 | .54* |
| Ratio of net investment income (%) | 4.71* | 4.53 | 4.59 | 4.81 | 4.82 | 4.74* |
| Portfolio turnover rate (%) | 28** | 19 | 28 | 31 | 24 | 22 |
| a For the six months ended November 30, 2007 (Unaudited). b For the period from August 19, 2002 (commencement of operations of Institutional Class shares) to May 31, 2003. c Total returns would have been lower had certain expenses not been reduced. d Interest expense represents interest and fees on short term floating rate notes issued in conjunction with inverse floating rate securities. Interest income from such transactions is included in income from investment operations. * Annualized ** Not annualized *** Amount is less than $.005. | ||||||
Notes to Financial Statements (Unaudited)
A. Significant Accounting Policies
DWS Managed Municipal Bond Fund (the "Fund") is a diversified series of DWS Municipal Trust (the "Trust") which is registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end management investment company organized as a Massachusetts business trust.
The Fund offers multiple classes of shares which provide investors with different purchase options. Class A shares are offered to investors subject to an initial sales charge. Class B shares are offered to investors without an initial sales charge but are subject to higher ongoing expenses than Class A shares and a contingent deferred sales charge payable upon certain redemptions. Class B shares automatically convert to Class A shares six years after issuance. Class C shares are offered to investors without an initial sales charge but are subject to higher ongoing expenses than Class A shares and a contingent deferred sales charge payable upon certain redemptions within one year of purchase. Class C shares do not convert into another class. Institutional Class shares are offered to a limited group of investors, are not subject to initial or contingent deferred sales charges and have lower ongoing expenses than other classes. Class S shares are not subject to initial or contingent deferred sales charges and are generally not available to new investors except under certain circumstances.
Investment income, realized and unrealized gains and losses and certain fund-level expenses and expense reductions, if any, are borne pro rata on the basis of relative net assets by the holders of all classes of shares, except that each class bears certain expenses unique to that class such as distribution and services fees, services to shareholders and certain other class-specific expenses. Differences in class-level expenses may result in payment of different per share dividends by class. All shares of the Fund have equal rights with respect to voting subject to class-specific arrangements.
The Fund's financial statements are prepared in accordance with accounting principles generally accepted in the United States of America which require the use of management estimates. Actual results could differ from those estimates. The policies described below are followed consistently by the Fund in the preparation of its financial statements.
Security Valuation. Investments are stated at value determined as of the close of regular trading on the New York Stock Exchange on each day the exchange is open for trading. Debt securities are valued by independent pricing services approved by the Trustees of the Fund, whose valuations are intended to reflect the mean between the bid and asked prices, as applicable, obtained from a broker-dealer. If the pricing services are unable to provide valuations, the securities are valued at the mean of the most recent bid and asked quotations or evaluated prices obtained from a broker-dealer. Such services may use various pricing techniques which take into account appropriate factors such as yield, quality, coupon rate, maturity, type of issue, trading characteristics and other data, as well as broker quotes.
Securities and other assets for which market quotations are not readily available or for which the above valuation procedures are deemed not to reflect fair value are valued in a manner that is intended to reflect their fair value as determined in accordance with procedures approved by the Trustees.
In September 2006, the Financial Accounting Standards Board ("FASB") released Statement of Financial Accounting Standards No. 157, "Fair Value Measurements" ("FAS 157"). FAS 157 defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. FAS 157 is effective for fiscal years beginning after November 15, 2007. As of November 30, 2007, management does not believe the adoption of FAS 157 will impact the amounts reported in the financial statements, however, additional disclosures will be required about the inputs used to develop the measurements of fair value and the effect of certain of the measurements reported in the statement of operations for a fiscal period.
Swap Agreements. The Fund may enter into interest rate swap transactions to reduce the interest rate risk inherent in the Fund's underlying investments. The use of interest rate swaps is a highly specialized activity that involves investment techniques and risks different from those associated with ordinary portfolio security transactions. In an interest rate swap, the Fund would agree to pay to the other party to the interest rate swap (which is known as the "counterparty") a fixed rate payment in exchange for the counterparty agreeing to pay to the Fund a variable rate payment, or the Fund would agree to receive from the counterparty a fixed rate payment in exchange for the counterparty agreeing to receive from the Fund a variable rate payment. The payment obligations would be based on the notional amount of the swap. Certain risks may arise when entering into swap transactions including counterparty default, liquidity or unfavorable changes in interest rates. Payments received or made at the end of the measurement period are recorded as realized gain or loss in the Statement of Operations. The value of the swap is adjusted daily based upon a price supplied by the counterparty and the change in value is recorded as unrealized appreciation or depreciation.
Inverse Floaters. Inverse floating rate notes are debt instruments with a weekly floating rate of interest that bears an inverse relationship to changes in short-term market interest rates. Investments in this type of instrument involve special risks as compared to investments in a fixed rate municipal security. The debt instrument in which the Fund may invest is a tender option bond trust (the "trust") which can be established by the Fund, a financial institution, or broker, consisting of underlying municipal obligations with intermediate to long maturities and a fixed interest rate. Other investors in the trust usually consist of money market fund investors receiving weekly floating interest rate payments who have put options with the financial institutions. The Fund may enter into shortfall and forbearance agreements by which a Fund agrees to reimburse the trust, in certain circumstances, for the difference between the liquidation value of the fixed rate municipal security held by the trust and the liquidation value of the floating rate notes. Certain inverse floating rate securities held by the Fund have been created with bonds purchased by the Fund and subsequently transferred to the trust. These transactions are considered a form of financing for accounting purposes. As a result, the Fund includes the original transferred bond and a corresponding liability equal to the floating rate note issued. The Fund does not consider the Fund's investment in inverse floaters borrowing within the meaning of the Investment Company Act of 1940. Inverse floating rate notes exhibit added interest rate sensitivity compared to other bonds with a similar maturity. Moreover, since these securities are in a trust form, a sale may take longer to settle than the standard two days after the trade date.
The weighted average outstanding daily balance of the floating rate notes issued during the six months ended November 30, 2007 was approximately $348,676,000, with a weighted average interest rate of 3.88%.
Futures Contracts. A futures contract is an agreement between a buyer or seller and an established futures exchange or its clearinghouse in which the buyer or seller agrees to take or make a delivery of a specific amount of a financial instrument at a specified price on a specific date (settlement date). The Fund may enter into futures contracts as a hedge against anticipated interest rate changes and for duration management, risk management and return enhancement purposes.
Upon entering into a futures contract, the Fund is required to deposit with a financial intermediary an amount ("initial margin") equal to a certain percentage of the face value indicated in the futures contract. Subsequent payments ("variation margin") are made or received by the Fund dependent upon the daily fluctuations in the value of the underlying security and are recorded for financial reporting purposes as unrealized gains or losses by the Fund. When entering into a closing transaction, the Fund will realize a gain or loss equal to the difference between the value of the futures contract to sell and the futures contract to buy. Futures contracts are valued at the most recent settlement price.
Certain risks may arise upon entering into futures contracts, including the risk that an illiquid secondary market will limit the Fund's ability to close out a futures contract prior to the settlement date and that a change in the value of a futures contract may not correlate exactly with the changes in the value of the securities hedged. When utilizing futures contracts to hedge, the Fund gives up the opportunity to profit from favorable price movements in the hedged positions during the term of the contract.
When Issued/Delayed Delivery Securities. The Fund may purchase securities with delivery or payment to occur at a later date beyond the normal settlement period. At the time the Fund enters into a commitment to purchase a security, the transaction is recorded and the value of the security is reflected in the net asset value. The price of such security and the date when the security will be delivered and paid for are fixed at the time the transaction is negotiated. The value of the security may vary with market fluctuations. No interest accrues to the Fund until payment takes place. At the time the Fund enters into this type of transaction it is required to segregate cash or other liquid assets at least equal to the amount of the commitment.
Certain risks may arise upon entering into when-issued or delayed delivery securities from the potential inability of counterparties to meet the terms of their contracts or if the issuer does not issue the securities due to political, economic, or other factors. Additionally, losses may arise due to changes in the value of the underlying securities.
Federal Income Taxes. The Fund's policy is to comply with the requirements of the Internal Revenue Code, as amended, which are applicable to regulated investment companies, and to distribute all of its taxable and tax-exempt income to its shareholders. Accordingly, the Fund paid no federal income taxes and no federal income tax provision was required.
From November 1, 2006 through May 31, 2007, the Fund incurred approximately $5,396,000 of net realized capital losses. As permitted by tax regulations, the Fund intends to elect to defer these losses and treat them as arising in the fiscal year ending May 31, 2008.
In July 2006, FASB issued Interpretation No. 48 ("FIN 48"), "Accounting for Uncertainty in Income Taxes — an interpretation of FASB Statement No. 109" (the "Interpretation"). The Interpretation establishes for the Fund a minimum threshold for financial statement recognition of the benefit of positions taken in filing tax returns. Management has evaluated the application of FIN 48 and has determined there is no impact on the Fund's financial statements.
Distribution of Income and Gains. Net investment income of the Fund is declared as a daily dividend and is distributed to shareholders monthly. Net realized gains from investment transactions, in excess of available capital loss carryforwards, would be taxable to the Fund if not distributed, and, therefore, will be distributed to shareholders at least annually.
The timing and characterization of certain income and capital gains distributions are determined annually in accordance with federal tax regulations which may differ from accounting principles generally accepted in the United States of America. These differences primarily relate to investments in futures contracts, certain securities sold at a loss and accretion of market discount on debt securities. As a result, net investment income (loss) and net realized gain (loss) on investment transactions for a reporting period may differ significantly from distributions during such period. Accordingly, the Fund may periodically make reclassifications among certain of its capital accounts without impacting the net asset value of the Fund.
The tax character of current year distributions will be determined at the end of the current fiscal year.
Redemption Fees. The Fund imposes a redemption fee of 2% of the total redemption amount on the Fund shares redeemed or exchanged within 15 days of buying them, either by purchase or exchange. This fee is assessed and retained by the Fund for the benefit of the remaining shareholders. The redemption fee is accounted for as an addition to paid-in capital.
Expenses. Expenses of the Trust arising in connection with a specific fund are allocated to that fund. Other Trust expenses which cannot be directly attributed to a fund are apportioned among the funds in the Trust.
Contingencies. In the normal course of business, the Fund may enter into contracts with service providers that contain general indemnification clauses. The Fund's maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet been made. However, based on experience, the Fund expects the risk of loss to be remote.
Other. Investment transactions are accounted for on a trade date plus one basis for daily net asset value calculations. However, for financial reporting purposes, investment security transactions are reported on trade date. Interest income is recorded on an accrual basis. Realized gains and losses from investment transactions are recorded on an identified cost basis. All premiums and discounts are amortized/accreted for financial reporting purposes.
Statement of Cash Flows. Information on financial transactions which have been settled through the receipt and disbursement of cash is presented in the Statement of Cash Flows. The end of period cash amount shown in the Statement of Cash Flows represents the cash (overdraft) position in the Fund's custodian bank at November 30, 2007. Non-cash activity from discount and premium amortization has been excluded from the Statement of Cash Flows.
B. Purchases and Sales of Securities
During the six months ended November 30, 2007, purchases and sales of investment securities (excluding short-term investments) aggregated $1,158,813,066 and $1,077,372,703, respectively.
C. Related Parties
Management Agreement. Under the Investment Management Agreement with Deutsche Investment Management Americas Inc. ("DIMA" or the "Advisor"), an indirect, wholly owned subsidiary of Deutsche Bank AG, the Advisor directs the investments of the Fund in accordance with its investment objectives, policies and restrictions. The Advisor determines the securities, instruments and other contracts relating to investments to be purchased, sold or entered into by the Fund.
Under the Investment Management Agreement with the Advisor, the Fund pays a monthly management fee based on the Fund's average daily net assets, computed and accrued daily and payable monthly, at the following annual rates:
| First $250 million of the Fund's average daily net assets | .365% |
| Next $750 million of such net assets | .345% |
| Next $1.5 billion of such net assets | .325% |
| Next $2.5 billion of such net assets | .315% |
| Next $2.5 billion of such net assets | .295% |
| Next $2.5 billion of such net assets | .275% |
| Next $2.5 billion of such net assets | .255% |
| Over $12.5 billion of such net assets | .235% |
Accordingly, for the six months ended November 30, 2007, the fee pursuant to the Investment Management Agreement was equivalent to an annualized effective rate of 0.33% of the Fund's average daily net assets.
For the period from June 1, 2007 through September 30, 2008, the Advisor has contractually agreed to waive all or a portion of its management fee and reimburse or pay certain operating expenses of the Fund (excluding certain expenses such as extraordinary expenses, taxes, brokerage and interest expenses) to the extent necessary to maintain the operating expenses of certain classes as follows:
| Class A | .73% |
| Class B | 1.48% |
| Class C | 1.49% |
| Institutional Class | .50% |
For Class S shares, for the period from June 1, 2007 through September 30, 2007, the Advisor had contractually agreed to waive all or a portion of its management fee and reimburse or pay certain operating expenses (excluding certain expenses such as extraordinary expenses, taxes, brokerage, interest, proxy and organizational and offering expenses) to the extent necessary to maintain the operating expenses at 0.50%.
Effective October 1, 2007 through September 30, 2008 for Class S shares, the Advisor has contractually agreed to waive all or a portion of its management fee and reimburse or pay certain operating expenses (excluding certain expenses such as extraordinary expense, taxes, brokerage and interest expenses) to the extent necessary to maintain the operating expenses at 0.52%.
Administration Fee. Pursuant to an Administrative Services Agreement, DIMA provides most administrative services to the Fund. For all services provided under the Administrative Services Agreement, the Fund pays the Advisor a fee ("Administration Fee") of 0.10% of the Fund's average daily net assets, computed and accrued daily and payable monthly. For the six months ended November 30, 2007, the Advisor received an Administration Fee of $1,898,025, of which $308,944 is unpaid.
Service Provider Fees. DWS Scudder Investments Service Company ("DWS-SISC"), an affiliate of the Advisor, is the transfer agent, dividend-paying agent and shareholder service agent of the Fund. Pursuant to a sub-transfer agency agreement between DWS-SISC and DST Systems, Inc. ("DST"), DWS-SISC has delegated certain transfer agent, dividend-paying agent and shareholder service agent functions to DST. DWS-SISC compensates DST out of the shareholder servicing fee it receives from the Fund. For the six months ended November 30, 2007, the amounts charged to the Fund by DWS-SISC were as follows:
Services to Shareholders | Total Aggregated | Waived | Unpaid at November 30, 2007 |
| Class A | $ 368,284 | $ 183,613 | $ 62,579 |
| Class B | 7,554 | 7,554 | — |
| Class C | 5,293 | 2,876 | 792 |
| Class S | 481,364 | 383,087 | 58,994 |
| Institutional Class | 391 | — | 109 |
| $ 862,886 | $ 577,130 | $ 122,474 |
Distribution and Service Fees. Under the Fund's Class B and Class C 12b-1 plans, DWS Scudder Distributors, Inc. ("DWS-SDI"), an affiliate of the Advisor, receives a fee ("Distribution Fee") of 0.75% of average daily net assets of Class B and C shares. Pursuant to the agreement, DWS-SDI enters into related selling group agreements with various firms at various rates for sales of Class B and C shares. For the six months ended November 30, 2007, the Distribution Fee was as follows:
Distribution Fee | Total Aggregated | Unpaid at November 30, 2007 |
| Class B | $ 62,738 | $ 10,490 |
| Class C | 83,659 | 14,072 |
| $ 146,397 | $ 24,562 |
In addition, DWS-SDI provides information and administrative services for a fee ("Service Fee") to Class A, B and C shareholders at an annual rate of up to 0.25% of average daily net assets for each such class. DWS-SDI in turn has various agreements with financial services firms that provide these services and pays these fees based upon the assets of shareholder accounts the firms service. For the six months ended November 30, 2007, the Service Fee was as follows:
Service Fee | Total Aggregated | Waived | Unpaid at November 30, 2007 | Annualized Effective Rate |
| Class A | $ 2,156,822 | $ — | $ 287,667 | .24% |
| Class B | 20,537 | 627 | 2,893 | .25% |
| Class C | 27,212 | — | 4,297 | .24% |
| $ 2,204,571 | $ 627 | $ 294,857 |
|
Underwriting Agreement and Contingent Deferred Sales Charge. DWS-SDI is the principal underwriter for the Fund. Underwriting commissions paid to DWS-SDI in connection with the distribution of Class A shares for the six months ended November 30, 2007 aggregated $33,066.
In addition, DWS-SDI receives any contingent deferred sales charge ("CDSC") from Class B share redemptions occurring within six years of purchase and Class C share redemptions occurring within one year of purchase. There is no such charge upon redemption of any share appreciation or reinvested dividends. The CDSC is based on declining rates ranging from 4% to 1% for Class B and 1% for Class C, of the value of the shares redeemed. For the six months ended November 30, 2007, the CDSC for Class B and C shares aggregated $25,698 and $989, respectively. A deferred sales charge of up to 0.85% is assessed on certain redemptions of Class A shares. For the six months ended November 30, 2007, SDI received $20 for Class A shares.
Typesetting and Filing Service Fees. Under an agreement with DIMA, DIMA is compensated for providing typesetting and certain regulatory filing services to the Fund. For the six months ended November 30, 2007, the amount charged to the Fund by DIMA included in the Statement of Operations under "report to shareholders" aggregated $17,251, of which $11,861 is unpaid.
Trustees' Fees and Expenses. As compensation for his or her services, each Independent Trustee receives an aggregated annual fee, plus a fee for each meeting attended (plus reimbursement for reasonable out-of-pocket expenses incurred in connection with his or her attendance at board and committee meetings) from each fund in the Fund Complex for which he or she serves. In addition, the Lead Trustee of the Board and the Chairperson of each committee of the Board receive additional compensation for their services. Payment of such fees and expenses is allocated among all such funds described above in direct proportion to their relative net assets.
D. Fee Reductions
The Fund has entered into an arrangement with its custodian and transfer agent whereby credits realized as a result of uninvested cash balances were used to reduce a portion of the Fund's custodian expenses. During the six months ended November 30, 2007, the custodian fee was reduced by $263 and $43,606, respectively, for custody and transfer agent credits earned.
E. Line of Credit
The Fund and other affiliated funds (the "Participants") share in a $750 million revolving credit facility administered by JPMorgan Chase Bank, N.A. for temporary or emergency purposes, including the meeting of redemption requests that otherwise might require the untimely disposition of securities. The Participants are charged an annual commitment fee which is allocated, based upon net assets, among each of the Participants. Interest is calculated at the Federal Funds Rate plus 0.35 percent. The Fund may borrow up to a maximum of 33 percent of its net assets under the agreement.
F. Share Transactions
The following table summarizes share and dollar activity in the Fund:
| Six Months Ended November 30, 2007 | Year Ended | ||
| Shares | Dollars | Shares | Dollars |
Shares sold | ||||
| Class A | 2,476,406 | $ 22,179,501 | 6,354,432 | $ 57,714,788 |
| Class B | 25,342 | 226,429 | 65,221 | 591,935 |
| Class C | 323,621 | 2,902,653 | 494,648 | 4,488,598 |
| Class AARP* | — | — | 307,088 | 2,773,392 |
| Class S | 12,790,346 | 114,111,522 | 7,734,371 | 70,611,518 |
| Institutional Class | 15,262 | 136,981 | 162,925 | 1,477,502 |
| |
| $ 139,557,086 |
| $ 137,657,733 |
Shares issued to shareholders in reinvestment of distributions | ||||
| Class A | 3,095,726 | $ 27,702,012 | 6,742,319 | $ 61,301,084 |
| Class B | 21,710 | 194,250 | 61,369 | 558,240 |
| Class C | 35,712 | 319,530 | 74,388 | 676,347 |
| Class AARP* | — | — | 374,916 | 3,355,516 |
| Class S | 3,097,397 | 27,752,555 | 6,130,080 | 55,876,234 |
| Institutional Class | 7,277 | 65,115 | 9,063 | 82,355 |
| |
| $ 56,033,462 |
| $ 121,849,776 |
Shares redeemed | ||||
| Class A | (12,290,794) | $ (109,858,314) | (23,636,071) | $ (214,768,829) |
| Class B | (455,157) | (4,072,746) | (940,157) | (8,544,516) |
| Class C | (308,373) | (2,768,282) | (554,224) | (5,034,774) |
| Class AARP* | — | — | (2,313,040) | (20,841,378) |
| Class S | (17,255,197) | (154,530,415) | (26,701,728) | (242,939,168) |
| Institutional Class | (21,350) | (190,167) | (173,491) | (1,588,878) |
| |
| $ (271,419,924) |
| $ (493,717,543) |
Shares converted* | ||||
| Class S | — | $ — | 145,539,546 | $ 1,310,876,971 |
| Class AARP | — | — | (145,519,980) | (1,310,876,971) |
Redemption fees | $ 1,153 |
| $ 6,885 | |
Net increase (decrease) | ||||
| Class A | (6,718,662) | $ (59,976,357) | (10,539,320) | $ (95,751,392) |
| Class B | (408,105) | (3,652,067) | (813,567) | (7,394,231) |
| Class C | 50,960 | 454,001 | 14,812 | 130,171 |
| Class AARP* | — | — | (147,151,016) | (1,325,589,441) |
| Class S | (1,367,454) | (12,665,729) | 132,702,269 | 1,194,430,765 |
| Institutional Class | 1,189 | 11,929 | (1,503) | (29,021) |
| |
| $ (75,828,223) |
| $ (234,203,149) |
Investment Management Agreement Approval
The Fund's Trustees approved the continuation of the Fund's current investment management agreement with DIMA in September 2007.
In terms of the process that the Trustees followed prior to approving the agreement, shareholders should know that:
At the present time, all but one of your Fund's Trustees are independent of DIMA and its affiliates.
The Trustees meet frequently to discuss fund matters. Each year, the Trustees dedicate part or all of several meetings to contract review matters. In connection with reviewing the Fund's investment management agreement, the Trustees also review the terms of the Fund's Rule 12b-1 plan, distribution agreement, administration agreement, transfer agency agreement and other material service agreements.
In connection with the Board's 2007 contract review, the Board formed a special committee to facilitate careful review of the funds' contractual arrangements. After reviewing the Fund's arrangements, that committee recommended that the Board vote to approve the continuation of the Fund's investment management agreement.
The Trustees regularly meet privately with their independent counsel to discuss contract review and other matters. In addition, the Trustees were also advised by two consultants, including the Fund's independent fee consultant, in the course of their 2007 review of the Fund's contractual arrangements. In particular, the Trustees considered the report prepared by the independent fee consultant in connection with their deliberations.
The Trustees believe that a long-term relationship with a capable, conscientious advisor is in the best interest of shareholders. As you may know, DIMA is part of Deutsche Bank, a major global banking institution that is engaged in a wide range of financial services. The Trustees believe that there are significant advantages to being part of a global asset management business that offers a wide range of investing expertise and resources, including hundreds of portfolio managers and analysts with research capabilities in many countries throughout the world.
Shareholders may focus primarily on fund performance and fees, but the Fund's Trustees consider these and many other factors, including the quality and integrity of DIMA's personnel and such other issues as back-office operations, fund valuations, and compliance policies and procedures.
In determining to approve the continuation of the Fund's current investment management agreement, the Board considered all factors that it believes relevant to the interests of Fund shareholders, including:
The investment management fee schedule for the Fund, including (i) comparative information provided by Lipper regarding investment management fee rates paid to other investment advisors by similar funds and (ii) fee rates paid to DIMA by similar funds and institutional accounts advised by DIMA (if any). With respect to management fees paid to other investment advisors by similar funds, the Trustees noted that the contractual fee rates paid by the Fund were higher than the median (3rd quartile) of the applicable Lipper peer group (based on Lipper data provided as of December 31, 2006). The Board gave a lesser weight to fees paid by similar institutional accounts advised by DIMA, in light of the material differences in the scope of services provided to mutual funds as compared to those provided to institutional accounts. Taking into account the foregoing, the Board concluded that the fee schedule in effect for the Fund represents reasonable compensation in light of the nature, extent and quality of the investment services being provided to the Fund.
The extent to which economies of scale would be realized as the Fund grows. In this regard, the Board noted that the Fund's investment management fee schedule includes fee breakpoints. The Board concluded that the Fund's fee schedule represents an appropriate sharing between Fund shareholders and DIMA of such economies of scale as may exist in the management of the Fund at current asset levels.
The total operating expenses of the Fund. In this regard, the Board noted that the total (net) operating expenses of the Fund (Class A shares) are expected to be lower than the median (1st quartile) of the applicable Lipper expense universe (based on Lipper data provided as of December 31, 2006, and in each case analyzing Class A expenses less any applicable distribution and/or service plan expenses). The Board considered the expenses of this class to be representative for purposes of evaluating other classes of shares. The Board also considered how the Fund's total (net) operating expenses compared to the total (net) operating expenses of a more customized peer group selected by Lipper (based on such factors as asset size). The Board also noted that the expense limitations agreed to by DIMA helped to ensure that the Fund's total (net) operating expenses would be competitive relative to the applicable Lipper universe.
The investment performance of the Fund and DIMA, both absolute and relative to various benchmarks and industry peer groups. The Board noted that for the one-, three- and five- year periods ended December 31, 2006, the Fund's performance (Class S shares) was in the 1st quartile, 2nd quartile and 1st quartile, respectively, of the applicable Lipper universe. The Board also observed that the Fund has outperformed its benchmark in the one-year period ended December 31, 2006 and has underperformed its benchmark in the three-year and five-year periods ended December 31, 2006. The Board recognized that DIMA has made significant changes in its investment personnel and processes in recent years in an effort to improve long-term performance.
The nature, extent and quality of the advisory services provided by DIMA. The Board considered extensive information regarding DIMA, including DIMA's personnel (including particularly those personnel with responsibilities for providing services to the Fund), resources, policies and investment processes. The Board also considered the terms of the current investment management agreement, including the scope of services provided under the agreement. In this regard, the Board concluded that the quality and range of services provided by DIMA have benefited and should continue to benefit the Fund and its shareholders.
The costs of the services to, and profits realized by, DIMA and its affiliates from their relationships with the Fund. The Board reviewed information concerning the costs incurred and profits realized by DIMA during 2006 from providing investment management services to the Fund (and, separately, to the entire DWS Scudder fund complex), and reviewed with DIMA the cost allocation methodology used to determine DIMA's profitability. In analyzing DIMA's costs and profits, the Board also reviewed the fees paid to and services provided by DIMA and its affiliates with respect to administrative services, transfer agent services, shareholder servicing and distribution (including fees paid pursuant to 12b-1 plans), as well as information regarding other possible benefits derived by DIMA and its affiliates as a result of DIMA's relationship with the Fund. As part of this review, the Board considered information provided by an independent accounting firm engaged to review DIMA's cost allocation methodology and calculations. The Board concluded that the Fund's investment management fee schedule represented reasonable compensation in light of the costs incurred by DIMA and its affiliates in providing services to the Fund. The Board also reviewed information regarding the profitability of certain similar investment management firms. The Board noted that while information regarding the profitability of such firms is limited (and in some cases is not necessarily prepared on a comparable basis), DIMA and its affiliates' overall profitability with respect to the DWS Scudder fund complex (after taking into account distribution and other services provided to the funds by DIMA and its affiliates) was lower than the overall profitability levels of many comparable firms for which such data was available.
The practices of DIMA regarding the selection and compensation of brokers and dealers executing portfolio transactions for the Fund. The Board considered that a portion of the Fund's brokerage may be allocated to affiliates of DIMA, subject to compliance with applicable SEC rules. The Board also considered that, subject to ongoing review by the Board, a limited portion of the Fund's brokerage may be allocated to brokers who acquire (and provide to DIMA and its affiliates) research services from third parties that are generally useful to DIMA and its affiliates in managing client portfolios. The Board indicated that it would continue to monitor the allocation of the Fund's brokerage to ensure that the principle of "best price and execution" remains paramount in the portfolio trading process.
DIMA's commitment to and record of compliance, including its written compliance policies and procedures. In this regard, the Board considered DIMA's commitment to indemnify the Fund against any costs and liabilities related to lawsuits or regulatory actions arising from allegations regarding market timing, revenue sharing, fund valuation or other subjects arising from or relating to pending regulatory inquiries. The Board also considered the significant attention and resources dedicated by DIMA to documenting and enhancing its compliance processes in recent years. The Board noted in particular (i) the experience and seniority of DIMA's chief compliance officer; (ii) the large number of compliance personnel who report to DIMA's chief compliance officer; and (iii) the substantial commitment of resources by DIMA and its affiliates to compliance matters.
Deutsche Bank's commitment to its US mutual fund business. The Board considered recent and ongoing efforts by Deutsche Bank to restructure its US mutual fund business to improve efficiency and competitiveness and to reduce compliance and operational risk. The Board considered assurances received from Deutsche Bank that it would commit the resources necessary to maintain high-quality services to the Fund and its shareholders. The Board also considered Deutsche Bank's strategic plans for its US mutual fund business, the potential benefits to Fund shareholders and Deutsche Bank's management of one of Europe's most successful fund groups.
Based on all of the foregoing, the Board determined to continue the Fund's current investment management agreement, and concluded that the continuation of such agreement was in the best interests of the Fund's shareholders.
In reaching this conclusion the Board did not give particular weight to any single factor identified above. The Board considered these factors over the course of numerous meetings, many of which were in executive session with only the Independent Trustees and their counsel present. It is possible that individual Trustees may have weighed these factors differently in reaching their individual decisions to approve the continuation of the current agreement.
Summary of Management Fee Evaluation by Independent Fee Consultant
October 26, 2007
Pursuant to an Order entered into by Deutsche Investment Management Americas and affiliates (collectively, "DeAM") with the Attorney General of New York, I, Thomas H. Mack, have been appointed the Independent Fee Consultant for the DWS Scudder Funds. My duties include preparing an annual written evaluation of the management fees DeAM charges the Funds, considering among other factors the management fees charged by other mutual fund companies for like services, management fees DeAM charges other clients for like services, DeAM's costs of supplying services under the management agreements and related profit margins, possible economies of scale if a Fund grows larger, and the nature and quality of DeAM's services, including fund performance. This report summarizes my evaluation for 2007, including my qualifications, the evaluation process for each of the DWS Scudder Funds, consideration of certain complex-level factors, and my conclusions.
Qualifications
For more than 30 years I have served in various professional capacities within the investment management business. I have held investment analysis and advisory positions, including securities analyst, portfolio strategist and director of investment policy with a large investment firm. I have also performed business management functions, including business development, financial management and marketing research and analysis.
Since 1991, I have been an independent consultant within the asset management industry. I have provided services to over 125 client organizations, including investment managers, mutual fund boards, product distributors and related organizations. Over the past several years I have completed a number of assignments for mutual fund boards, specifically including assisting boards with management contract renewal.
I hold a Master of Business Administration degree, with highest honors, from Harvard University; and Master of Science and Bachelor of Science (highest honors) degrees from the University of California at Berkeley. I am an independent director and audit committee financial expert for two closed-end mutual funds, serve on the board of directors of a private market research company, and have served in various leadership and financial oversight capacities with non-profit organizations.
Evaluation of Fees for each DWS Scudder Fund
My work focused primarily on evaluating, fund-by-fund, the fees charged to each of the 136 Fund portfolios in the DWS Scudder Fund family. For each Fund, I considered each of the key factors mentioned above, as well as any other relevant information. In doing so I worked closely with the Funds' Independent Directors in their annual contract renewal process, as well as in their approval of contracts for several new funds (documented separately).
In evaluating each Fund's fees, I reviewed comprehensive materials provided by or on behalf of DeAM, including expense information prepared by Lipper Analytical, comparative performance information, profitability data, manager histories, and other materials. I also accessed certain additional information from the Lipper, Strategic Insight, and Morningstar databases and drew on my industry knowledge and experience.
To facilitate evaluating this considerable body of information, I prepared for each Fund a document summarizing the key data elements in each area as well as additional analytics discussed below. This made it possible to consider each key data element in the context of the others.
In the course of contract renewal, DeAM agreed to implement a number of fee and expense adjustments requested by the Independent Directors which will favorably impact future fees and expenses, and my evaluation includes the effects of these changes.
Fees and Expenses Compared with Other Funds
The competitive fee and expense evaluation for each fund focused on two primary comparisons:
The Fund's contractual management fee (the advisory fee plus the administration fee where applicable) compared with those of a group of typically 12-15 funds in the same Lipper investment category (e.g. Large Capitalization Growth) having similar distribution arrangements and being of similar size.
The Fund's total expenses compared with a broader universe of funds from the same Lipper investment category and having similar distribution arrangements.
These two comparisons provide a view of not only the level of the fee compared with funds of similar scale but also the total expense the Fund bears for all the services it receives, in comparison with the investment choices available in the Fund's investment category and distribution channel. The principal figure-of-merit used in these comparisons was the subject Fund's percentile ranking against peers.
DeAM's Fees for Similar Services to Others
DeAM provided management fee schedules for all of its US domiciled fund and non-fund investment management accounts in any of the investment categories where there is a DWS Scudder Fund. These similar products included the other DWS Scudder Funds, non-fund pooled accounts, institutional accounts and sub-advisory accounts. Using this information, I calculated for each Fund the fee that would be charged to each similar product, at the subject Fund's asset level.
Evaluating information regarding non-fund products is difficult because there are varying levels of services required for different types of accounts, with mutual funds generally requiring considerably more regulatory and administrative types of service as well as having more frequent cash flows than other types of accounts. Also, while mutual fund fees for similar fund products can be expected to be similar, there will be some differences due to different pricing conditions in different distribution channels (e.g. retail funds versus those used in variable insurance products), differences in underlying investment processes and other factors.
Costs and Profit Margins
DeAM provided a detailed profitability analysis for each Fund. After making some adjustments so that the presentation would be more comparable to the available industry figures, I reviewed profit margins from investment management alone, from investment management plus other fund services (excluding distribution) provided to the Funds by DeAM (principally shareholder services), and DeAM profits from all sources, including distribution. A later section comments on overall profitability.
Economies of Scale
Economies of scale — an expected decline in management cost per dollar of fund assets as fund assets grow — are very rarely quantified and documented because of inherent difficulties in collecting and analyzing relevant data. However, in virtually every investment category that I reviewed, larger funds tend to have lower fees and lower total expenses than smaller funds. To see how each DWS Scudder Fund compares with this industry observation, I reviewed:
The trend in Fund assets over the last five years and the accompanying trend in total expenses. This shows if the Fund has grown and, if so, whether total expense (management fees as well as other expenses) have declined as a percent of assets.
Whether the Fund has break-points in its management fee schedule, the extent of the fee reduction built into the schedule and the asset levels where the breaks take effect, and in the case of a sub-advised Fund how the Fund's break-points compare with those of the sub-advisory fee schedule.
How the Fund's contractual fee schedule compares with trends in the industry data. To accomplish this, I constructed a chart showing how actual latest-fiscal-year contractual fees of the Fund and of other similar funds relate to average fund assets, with the subject Fund's contractual fee schedule superimposed.
Quality of Service — Performance
The quality-of-service evaluation focused on investment performance, which is the principal result of the investment management service. Each Fund's performance was reviewed over the past 1, 3, 5 and 10 years, as applicable, and compared with that of other funds in the same investment category and with a suitable market index.
In addition, I calculated and reviewed risk-adjusted returns relative to an index of similar mutual funds' returns and a suitable market index. The risk-adjusted returns analysis provides a way of determining the extent to which the Fund's return comparisons are mainly the product of investment value-added (or lack thereof) or alternatively taking considerably more or less risk than is typical in its investment category.
I also received and considered the history of portfolio manager changes for each Fund, as this provided an important context for evaluating the performance results.
Complex-Level Considerations
While this evaluation was conducted mainly at the individual fund level, there are some issues relating to the reasonableness of fees that can alternatively be considered across the whole fund complex:
I reviewed DeAM's profitability analysis for all DWS Scudder funds, with a view toward determining if the allocation procedures used were reasonable and how profit levels compared with public data for other investment managers.
I considered whether DeAM and affiliates receive any significant ancillary or "fall-out" benefits that should be considered in interpreting the direct profitability results. These would be situations where serving as the investment manager of the Funds is beneficial to another part of the Deutsche Bank organization.
I considered how aggregated DWS Scudder Fund expenses had varied over the years, by asset class and in the context of trends in asset levels.
I reviewed the structure of the DeAM organization, trends in staffing levels, and information on compensation of investment management and other professionals compared with industry data.
Findings
Based on the process and analysis discussed above, which included reviewing a wide range of information from management and external data sources and considering among other factors the fees DeAM charges other clients, the fees charged by other fund managers, DeAM's costs and profits associated with managing the Funds, economies of scale, possible fall-out benefits, and the nature and quality of services provided, in my opinion the management fees charged the DWS Scudder Funds are reasonable.
Thomas H. Mack
| |
For More Information | The automated telephone system allows you to access personalized account information and obtain information on other DWS funds using either your voice or your telephone keypad. Certain account types within Classes A, B, C and S also have the ability to purchase, exchange or redeem shares using this system. For more information, contact your financial advisor. You may also access our automated telephone system or speak with a DWS Scudder representative by calling the appropriate number below: For shareholders of Classes A, B, C and Institutional Class: (800) 621-1048For shareholders of Class S: (800) 728-3337 |
Web Site | www.dws-scudder.com View your account transactions and balances, trade shares, monitor your asset allocation, and change your address, 24 hours a day.Obtain prospectuses and applications, blank forms, interactive worksheets, news about DWS funds, subscription to fund updates by e-mail, retirement planning information, and more. |
Written Correspondence | DWS Scudder PO Box 219151Kansas City, MO 64121-9151 |
Proxy Voting | A description of the fund's policies and procedures for voting proxies for portfolio securities and information about how the fund voted proxies related to its portfolio securities during the 12-month period ended June 30 is available on our Web site — www.dws-scudder.com (click on "proxy voting"at the bottom of the page) — or on the SEC's Web site — www.sec.gov. To obtain a written copy of the fund's policies and procedures without charge, upon request, call us toll free at (800) 621-1048. |
Principal Underwriter | If you have questions, comments or complaints, contact: DWS Scudder Distributors, Inc. 222 South Riverside PlazaChicago, IL 60606-5808 (800) 621-1148 |
| Class A | Class B | Class C | Class S | Institutional Class |
Nasdaq Symbol | SMLAX | SMLBX | SMLCX | SCMBX | SMLIX |
CUSIP Number | 23337W-709 | 23337W-808 | 23337W-881 | 23337W-865 | 23337W-857 |
Fund Number | 466 | 666 | 766 | 2066 | 544 |
This privacy statement is issued by DWS Scudder Distributors, Inc., Deutsche Investment Management Americas Inc., DeAM Investor Services, Inc., DWS Trust Company and the DWS Funds.
We never sell customer lists or individual client information. We consider privacy fundamental to our client relationships and adhere to the policies and practices described below to protect current and former clients' information. Internal policies are in place to protect confidentiality, while allowing client needs to be served. Only individuals who need to do so in carrying out their job responsibilities may access client information. We maintain physical, electronic and procedural safeguards that comply with federal and state standards to protect confidentiality. These safeguards extend to all forms of interaction with us, including the Internet.
In the normal course of business, clients give us nonpublic personal information on applications and other forms, on our Web sites, and through transactions with us or our affiliates. Examples of the nonpublic personal information collected are name, address, Social Security number and transaction and balance information. To be able to serve our clients, certain of this client information is shared with affiliated and nonaffiliated third-party service providers such as transfer agents, custodians, and broker-dealers to assist us in processing transactions and servicing your account with us. In addition, we may disclose all of the information we collect to companies that perform marketing services on our behalf or to other financial institutions with which we have joint marketing agreements. The organizations described above that receive client information may only use it for the purpose designated by the DWS Scudder Companies listed in the first paragraph of this Privacy Statement.
We may also disclose nonpublic personal information about you to other parties as required or permitted by law. For example, we are required or we may provide information to government entities or regulatory bodies in response to requests for information or subpoenas, to private litigants in certain circumstances, to law enforcement authorities, or any time we believe it necessary to protect the firm.
Questions on this policy may be sent to:
DWS Scudder
Attention: Correspondence — Chicago
P.O. Box 219415
Kansas City, MO 64121-9415
September 2007
Notes
Notes
Notes
Notes
ITEM 2. | CODE OF ETHICS |
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| Not applicable. |
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ITEM 3. | AUDIT COMMITTEE FINANCIAL EXPERT |
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| Not applicable. |
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ITEM 4. | PRINCIPAL ACCOUNTANT FEES AND SERVICES |
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| Not applicable. |
ITEM 5. | AUDIT COMMITTEE OF LISTED REGISTRANTS |
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| Not Applicable |
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ITEM 6. | SCHEDULE OF INVESTMENTS |
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| Not Applicable |
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ITEM 7. | DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES |
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| Not applicable. |
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ITEM 8. | PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES |
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| Not applicable. |
ITEM 9. | PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS |
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| Not Applicable. |
ITEM 10. | SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS |
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| The Committee on Independent Trustees/Directors selects and nominates Independent Trustees/Directors. Fund shareholders may submit nominees that will be considered by the committee when a Board vacancy occurs. Submissions should be mailed to: c/o Dawn-Marie Driscoll, PO Box 100176, Cape Coral, FL 33910. |
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ITEM 11. | CONTROLS AND PROCEDURES |
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| (a) The Chief Executive and Financial Officers concluded that the Registrant's Disclosure Controls and Procedures are effective based on the evaluation of the Disclosure Controls and Procedures as of a date within 90 days of the filing date of this report. |
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| (b) There have been no changes in the registrant's internal control over financial reporting that occurred during the registrant's last half-year (the registrant's second fiscal half-year in the case of the annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal controls over financial reporting. |
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ITEM 12. | EXHIBITS |
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| (a)(1) Certification pursuant to Rule 30a-2(a) under the Investment Company Act of 1940 (17 CFR 270.30a-2(a)) is filed and attached hereto as Exhibit 99.CERT. |
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| (b) Certification pursuant to Rule 30a-2(b) under the Investment Company Act of 1940 (17 CFR 270.30a-2(b)) is furnished and attached hereto as Exhibit 99.906CERT. |
Form N-CSRS Item F
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: | DWS Managed Municipal Bond Fund, a series of DWS Municipal Trust |
By: | /s/Michael G. Clark |
| Michael G. Clark |
President
Date: | February 1, 2008 |
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.
Registrant: | DWS Managed Municipal Bond Fund, a series of DWS Municipal Trust |
By: | /s/Michael G. Clark |
| Michael G. Clark |
President
Date: | February 1, 2008 |
By: | /s/Paul Schubert |
| Paul Schubert |
Chief Financial Officer and Treasurer
Date: | February 1, 2008 |