U. S.
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-2918
DUPREE MUTUAL FUNDS
(Exact Name of Registrant as Specified in Charter)
125 South Mill Street, Vine Center, Suite 100
Lexington, Kentucky 40507
(Address of Principal Executive Offices) (Zip Code)
Thomas P. Dupree
125 South Mill Street, Vine Center, Suite 100
Lexington, Kentucky 40507
(Name and address of agent for service)
Registrant’s Telephone Number, including Area Code (859) 254-7741
Date of fiscal year end: June 30, 2012
Date of reporting period: July 1, 2011 through June 30, 2012
Item 1. Report to Stockholders
June 30, 2012
ANNUAL REPORT
TO SHAREHOLDERS
ABOUT DUPREE MUTUAL FUNDS
In 1941, Dupree & Company, Inc. began business in Harlan, Kentucky as a small securities brokerage firm specializing in tax-exempt municipal bonds.
Over the years the firm, which in 1963 moved its offices to Lexington, Kentucky, grew to become a regional leader in public finance, helping to structure complex and innovative municipal bond financing for some of the largest public projects in the Commonwealth of Kentucky.
In 1979, Dupree & Company began what is now Dupree Mutual Funds with the Kentucky Tax-Free Income Series and became the Fund’s investment adviser. The Fund was one of the first single-state municipal bond funds in the country, and the first mutual fund to invest solely in Kentucky municipal bonds. Since then, several new offerings have been added to the Dupree Mutual Funds family:
Kentucky Tax-Free Short-to-Medium Series in 1987;
Intermediate Government Bond Series in 1992;
Tennessee Tax-Free Income Series in 1993;
Tennessee Tax-Free Short-to-Medium Series in 1994;
North Carolina Tax-Free Income Series in 1995;
North Carolina Tax-Free Short-to-Medium Series in 1995;
Alabama Tax-Free Income Series in 2000;
Mississippi Tax-Free Income Series in 2000; and
Taxable Municipal Bond Series in 2010.
Today, after more than 60 years in business, Dupree continues to be a pioneer in the industry. Our Kentucky, Tennessee, and Mississippi Series are currently the ONLY 100% “no-load” municipal bond funds available in those states. No-load means simply that shares of the funds are offered directly to investors with no front or back-end sales charges, as opposed to load funds which are sold through brokerage firms or other institutions.
At Dupree Mutual Funds, our goal is a simple one: to offer investors a high-quality, low-cost way to invest in municipal and government bonds while providing superior service to our shareholders. We encourage you to let us know how we’re doing.
TABLE OF CONTENTS
Management’s Discussion of Fund Performance: | Unaudited |
Twelve Months Ended June 30, 2012i
The investment objective of our tax-free municipal bond funds is to provide a high level of tax-free income derived from state-specific municipal bonds without incurring undue risk to principal. The investment objectives of our government bond fund and taxable municipal bond fund are to provide a high level of taxable income derived from securities of the U.S. government and its agencies and taxable municipal securities, respectively, without incurring undue risk to principal.
This report covers the 12-month period from June 30, 2011 through June 30, 2012 (the “reporting period”). During the second half of 2011, the economy grew at a modest pace. Real gross domestic product (GDP) increased at a 1.8 percent annual rate during the third quarter of 2011 and at a 3.0 percent annual rate during the fourth quarter. Economic growth slowed during the first half of 2012 with real GDP in the first quarter of 2012 increasing at a 1.9 percent annual rate. Real GDP for the second quarter of 2012 increased at an even slower pace of 1.5 percent annually (advance estimate). Historically, the average growth rate in the United States has been around 3.5 percent. The staff at the Federal Reserve projects that real GDP will accelerate gradually through 2014, supported by accommodative monetary policy, easing credit conditions, and rising consumer and business sentiment.
Retail sales, industrial production, private spending, and business investment continued to be negatively impacted by a number of factors during the reporting period. This included ongoing concerns about Europe’s financial condition, uncertainty about the path of U.S. fiscal policy, a still-weak housing market, and tight credit conditions. On a global level, the European fiscal crisis continued to be a major source of strain for financial markets. In the U.S., uncertainty about the future path of fiscal policy and the general health of the economy has kept individuals and businesses more cautious than normal.
In the labor market, the unemployment rate remained elevated during the period under review. The seasonally adjusted national unemployment rate was 9.2 percent in June 2011 and ended the reporting period at 8.2 percent. The labor market showed some temporary signs of improvement during the second half of 2011, but then exhibited some signs of softening during the first half of 2012. The Federal Reserve has projected that the unemployment rate will remain elevated and in the range of 7.0 to 8.2 percent through 2014.
Key measures of inflation remained subdued during the twelve month period ended June 30, 2012. The Federal Reserve’s preferred inflation index, the personal consumption expenditure core price index (PCE), increased 1.8 percent on a year-over-year basis through June which is below the 2 percent target rate set by the Federal Reserve. Near-term and long-term inflation expectations have remained stable.
Against this backdrop, the Federal Open Market Committee (FOMC) took steps to provide additional monetary accommodation during the first half of 2012. In particular, the FOMC extended its pledge to keep the federal funds target rate at exceptionally low levels (currently at 0 to 1/4 percent) until late 2014 and announced a continuation of its maturity extension program through the end of the year. These monetary policies are designed to put downward pressure on long-term interest rates and help support the economy.
State and local governments continued to successfully address ongoing fiscal challenges during the reporting period. According to data compiled by The Nelson A. Rockefeller Institute of Government, state tax revenue grew by 4.7 percent in the first quarter of 2012. This was the ninth consecutive quarter that states reported growth in collections on a year-over-year basis. Overall, state tax revenues are now above prerecession levels. Preliminary data for April and May 2012 indicate that state tax revenues continued to grow, with overall collections in forty six early-reporting states increasing by approximately 5.8 percent compared to the same months of 2011. Notwithstanding this positive revenue trend, states and local governments continue to face tough choices in connection with balancing their budgets.
Local property tax revenues, however, declined by 0.9 percent in the first quarter of 2012. In contrast to states, local governments rely primarily on property taxes. Tax collections at the local level have declined as a sharp drop in housing prices has continued to negatively impact real property assessments. The decline in property tax collections is likely to persist for some time as housing prices are still declining in many jurisdictions. However, there are some preliminary signs that the housing market is nearing a bottom and that prices are stabilizing.
According to the U.S. Commerce Department, state and local government spending and investment fell at a rate of 2.1 percent in the second quarter of 2012, the eleventh consecutive quarterly drop. Local governments cut approximately 66,000 jobs in the past year. State aid, which accounts for approximately 34 percent of revenue for local governments, has also continued to decline. At the same time, pension and healthcare costs are rising despite efforts to restructure those benefits.
i
The municipal bond market exhibited strong performance during the period under review. The Barclays Capital Municipal Bond Index, which tracks investment grade municipal securities across all sectors and maturities, had a total return of 9.90 percent for the twelve month period ended June 30, 2012. By way of comparison, the Barclays U.S. Treasury Index, which tracks U.S. Treasuries across all maturities, had a total return of 9.04 percent during the same time period. Both Treasuries and municipal bonds benefited from a flight-to-safety bid as global financial markets continued to experience higher than normal levels of volatility.
Strong demand for municipal bonds coupled with little new-issue supply resulted in lower yields and higher prices for municipal bonds. The Fed’s announcement in late January that the fed funds rate would remain at “exceptionally low levels” through late 2014 led to a marked increase in demand for municipal bonds. Although the primary supply of municipal bonds actually increased on a year-over-year basis, the majority of new issuance during the last twelve months was for refunding purposes and did not add to net available bond supply. Thus, the combination of strong demand and limited supply pushed bond prices higher and yields lower. The yield on benchmark 10-year AAA rated municipal bonds ended the reporting period at approximately 1.86 percent which was near the historical low of 1.65 percent. Long-dated bonds outperformed other parts of the yield curve during the reporting period.
The municipal bond market continued to experience some “headline risk” during the review period as several cities in California elected to seek protection from their creditors in bankruptcy court. News stories about public employee pension plan liabilities and two new accounting standards adopted by the Governmental Accounting Standards Board caused some fixed-income investors to question whether governments will report materially higher unfunded liabilities in the future. Many observers believe the California municipal bankruptcy cases are fact specific situations and not necessarily indicative of more widespread credit problems in the municipal bond sector. Despite a few isolated instances of severe credit stress, the default rate for investment grade municipal bonds during the past twelve months was actually below historical averages.
The Kentucky Tax-Free Income Series provided shareholders a total return of 8.97 percent for the twelve months ended June 30, 2012. The Kentucky Tax-Free Short-to-Medium Series provided shareholders with a total return of 5.10 percent during the period under review. The Kentucky Tax-Free Income Series’ slight underperformance of the index is attributable to the index’s slightly longer duration and the expense ratio of the fund. The Kentucky Tax-Free Short-to-Medium Series holds bonds significantly shorter than the average maturity and duration of the index, which led to its relative underperformance compared with the index.
Kentucky’s economy is still recovering from the national recession that ended in June 2009. For the fiscal year that ended June 30, 2012, General Fund receipts were 3.8 percent higher than FY 2011 tax collections. This was the second consecutive year that tax collections rose following two years of decline. The positive revenue trend allowed the state to close out FY 2012 with a budget surplus. The state’s annual average unemployment rate at the end of June stood at 8.2 percent which was down from 9.6 percent a year earlier. In 2011, Kentucky had a per capita personal income (personal income divided by population) of $33,667 which ranked 47th in the nation.
The state’s appropriation supported debt was rated Aa3 by Moody’s and A+ by Standard & Poor’s as of June 30, 2012. Kentucky had net tax-supported debt per capita of $2,035 as of calendar year-end 2011, which was substantially above the national net tax-supported debt median of $1,117 (Source: Moody’s Investors Services, 2012 State Debt Medians Report, May 22, 2012).
The Tennessee Tax-Free Income Series provided shareholders with a total return of 8.43 percent for the twelve months ended June 30, 2012. The Tennessee Tax-Free Short-to-Medium Series had a total return of 3.74 percent for the period under review. The Tennessee Tax-Free Income Series’ slight underperformance against the index is attributable to the index’s slightly longer duration and the expense ratio of the fund. The Tennessee Tax-Free Short-to-Medium Series holds bonds significantly shorter than the average maturity and duration of the index, which led to its relative underperformance compared with the index.
Tennessee’s economy has also continued to slowly recover from the national recession. During the recession the state experienced a severe contraction in the manufacturing and construction sectors. However, both of these sectors showed continued signs of stabilization during the period under review. The state’s annual average unemployment rate at the end of June was 8.1 percent which was down from 9.4 percent a year earlier. In 2011, the state had a per capita personal income of $36,533 which ranked 36th in the nation.
Tennessee relies on a combination of a state sales tax, corporate income taxes, and the Hall income tax for its revenue. The state’s fiscal condition improved considerably during the period under review. Total state revenue collections through June (the 11th month of the state’s fiscal year) were $554 million more than budgeted and came in 5.56 percent above the total budgeted for that period. The state expects to close out FY 2012 in July with a budget surplus.
ii
Tennessee’s general obligation (G.O.) bonds were rated Aaa by Moody’s and AA+ by Standard & Poor’s as of June 30, 2012. Tennessee had net tax-supported debt per capita of $343 as of calendar year-end 2011, which was substantially below the national net tax-supported debt median of $1,117 (Source: Moody’s Investors Services, 2012 State Debt Medians Report, May 22, 2012).
The North Carolina Tax-Free Income Series provided shareholders with a total return of 9.87 percent for the twelve months ended June 30, 2012. The North Carolina Tax-Free Short-to-Medium Series provided shareholders with a total return of 4.98 percent for the period under review. The North Carolina Tax-Free Income Series performed in line with the index. The North Carolina Tax-Free Short-to-Medium Series holds bonds significantly shorter than the average maturity and duration of the index, which led to its relative underperformance compared with the index.
North Carolina’s economy is also gradually recovering from the national recession. North Carolina’s recession wasn’t as severe as that experienced in many areas of the country. However, the job market contracted sharply nonetheless. Finance and manufacturing businesses account for a greater share of North Carolina’s economy than the national norm. The state’s average annual unemployment rate at the end of June was 9.4 percent which was down from 10.6 percent a year earlier. North Carolina has recovered or replaced about 35 percent of the jobs lost in the recession. Fortunately, North Carolina’s real estate markets avoided much of the speculative fever that plagued other jurisdictions so real estate prices have remained relatively stable throughout the state. In 2011, North Carolina had a per capita personal income of $36,164 which ranked 38th in the nation.
North Carolina’s G.O. bonds were rated Aaa by Moody’s and AAA by Standard & Poor’s as of June 30, 2012. North Carolina had net tax-supported debt per capita of $815 as of calendar year-end 201,1 which was below the national net tax-supported debt median of $1,117 (Source: Moody’s Investors Services, 2012 State Debt Medians Report, May 22, 2012).
The Alabama Tax-Free Income Series provided shareholders with a total return of 9.78 percent for the twelve months ended June 30, 2012. During the review period, the Alabama Tax-Free Income Series performed in line with the index.
Alabama’s economy didn’t contract as sharply as the national economy but the state’s recovery has lagged the pace of the national recovery. Durable manufacturing (motor vehicles) and retail trade, together with government activities, account for a bigger share of Alabama’s economy than the national average. Alabama is home to a number of large automobile manufacturing plants which are helping support the economy. Alabama’s relatively small energy sector (oil and gas drilling and coal production) has also helped the state’s economy rebound.
Alabama’s job market contracted more sharply than the national economy but has showed signs of stabilization. The state’s average annual unemployment rate at the end of June stood at 7.8 percent which was down from 9.3 percent a year earlier. In 2011, Alabama had a per capita personal income of $34,650 which ranked 42nd in the nation.
Alabama’s G.O. bonds were rated Aa1 by Moody’s and AA by Standard & Poor’s as of June 30, 2012. Alabama had net tax-supported debt per capita of $839 as of calendar year-end 2011, which was lower than the national net tax-supported debt median of $1,117 (Source: Moody’s Investors Services, 2012 State Debt Medians Report, May 22, 2012).
The Mississippi Tax-Free Income Series had a total return of 9.87 percent for the twelve month period ended June 30, 2012. During the reporting period, the Mississippi Tax-Free Income Series performed in line with the index.
Mississippi’s economy is dominated by manufacturing and service industries which were hit hard by the national recession. During the review period, the state’s economy continued to grow but at a slightly slower pace than the national economy. Overall, state General Fund revenues for FY 2012 were up over 5 percent in FY 2012 over the same period in FY 2011. Several new projects announced in 2011 continue to bolster the state’s economy with Chevron’s $1.4 billion expansion of its Pascagoula facilities leading the way.
The state’s average annual unemployment rate at the end of June was 8.8 percent which was down from 10.8 percent a year earlier. In 2011, Mississippi had a per capita personal income of $32,176 which ranked last in the nation.
The state’s G.O. bonds were rated Aa2 by Moody’s and AA by Standard & Poor’s as of June 30, 2012. Mississippi has net tax-supported debt per capita of $1,734 as of calendar year-end 2011, which was higher than the national net tax-supported debt median of $1,117 (Source: Moody’s Investors Services, 2012 State Debt Medians Report, May 22, 2012).
The Intermediate Government Bond Series had a total return of 9.83 percent for the twelve months ended June 30, 2012. The Barclays Capital U.S. Intermediate Government Bond Index had a total return of 5.01 percent for the one year period ended June 30, 2012. The fund’s average duration and maturity is longer than that of the index, and the fund primarily holds non-callable bonds. During the reporting period, longer bonds without call features dramatically outperformed shorter/callable bonds, leading to the relative outperformance of the fund as compared to the index.
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The Taxable Municipal Bond Series had a total return of 17.77 percent for the twelve month period ended June 30, 2012. The Barclays Capital Municipal Bond Taxable Index had a total return of 18.819 percent for the same period. The Taxable Municipal Bond Series performed in line with the index.
Please note that index information is provided for reference only. No index can perfectly match the investments that make up a fund’s portfolio. In making investment decisions for our portfolios we do not attempt to track indices. The Barclays Capital Municipal Bond index is national in scope and does not necessarily reflect the performance of state-specific municipal bond funds. Indices do not take into account any operating expenses or transaction costs. An investment cannot be made directly in an index.
i Data are from the Bureau of Economic Analysis, the U.S. Department of Labor Bureau of Labor Statistics, and various other sources management deems to be reliable. Some of the quoted data are preliminary in nature and may be subject to revision. Any opinions expressed herein are those of the funds’ portfolio management and are current as of June 30, 2012. They are not guarantees of performance or investment results and should not be taken as investment advice. Past performance is not a guarantee of future performance and you may lose money investing in the funds.
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| | | | | | |
| | The illustrations below provide each Fund’s sector allocation and summarize key information about each Fund’s investments. | | | Unaudited | |
| | | | |
Tennessee Tax-Free Income Series | |
| CREDIT QUALITY (reflects highest credit rating) | | % of Net Assets
at Fair Value | |
Aaa/AAA | | | 2.39% | |
Aa/AA | | | 72.10% | |
A | | | 20.18% | |
Baa/BBB | | | 3.11% | |
Not Rated | | | 2.22% | |
| | | | | |
| | | | 100.00% | |
| | | | | |
| COMPOSITION | | | |
| | | % of Net Assets | |
Insured Municipal | | | 45.03% | |
General Obligation | | | 12.22% | |
Municipal Utility Revenue | | | 11.31% | |
University Consolidated Education and Building Revenue | | | 7.71% | |
Hospital and Healthcare Revenue | | | 7.50% | |
State and Local Mortgage Revenue | | | 6.30% | |
Lease Revenue | | | 2.86% | |
Prerefunded | | | 2.85% | |
Escrowed to Maturity | | | 1.93% | |
Industrial Revenue | | | 0.97% | |
Public Facilities Revenue | | | 0.55% | |
Other Assets Less Liabilities | | | 0.77% | |
| | | | | |
| | | | 100.00% | |
| | | | | |
| | | | |
Tennessee Tax-Free Short-to-Medium Series | |
| CREDIT QUALITY (reflects highest credit rating) | | % of Net Assets
at Fair Value | |
Aaa/AAA | | | 18.48% | |
Aa/AA | | | 65.79% | |
A | | | 13.62% | |
Baa/BBB | | | 2.11% | |
| | | | | |
| | | | 100.00% | |
| | | | | |
| | |
| COMPOSITION | | | |
| | | % of Net Assets | |
Insured Municipal | | | 45.13% | |
General Obligation | | | 18.33% | |
Prerefunded | | | 15.77% | |
Lease Revenue | | | 6.00% | |
Municipal Utility Revenue | | | 5.34% | |
State and Local Mortgage Revenue | | | 4.50% | |
Public Facilities Revenue | | | 3.85% | |
Other Assets Less Liabilities | | | 1.08% | |
| | | | | |
| | | | 100.00% | |
| | | | | |
| | | | |
North Carolina Tax-Free Income Series | |
| CREDIT QUALITY (reflects highest credit rating) | | % of Net Assets
at Fair Value | |
Aaa/AAA | | | 3.74% | |
Aa/AA | | | 74.25% | |
A | | | 20.62% | |
Baa/BBB | | | 1.39% | |
| | | | | |
| | | | 100.00% | |
| | | | | |
| COMPOSITION | | | |
| | | % of Net Assets | |
Insured Municipal | | | 45.47% | |
Certificates of Participation | | | 15.52% | |
Hospital and Healthcare Revenue | | | 8.73% | |
University Consolidated Education and Building Revenue | | | 8.33% | |
Public Facilities Revenue | | | 6.66% | |
Lease Revenue | | | 6.12% | |
Municipal Utility Revenue | | | 4.13% | |
General Obligation | | | 2.64% | |
Prerefunded | | | 1.62% | |
Other Assets Less Liabilities | | | 0.78% | |
| | | | | |
| | | | 100.00% | |
| | | | | |
| | | | |
North Carolina Tax-Free Short-to-Medium Series | |
| CREDIT QUALITY (reflects highest credit rating) | | % of Net Assets
at Fair Value | |
Aaa/AAA | | | 19.10% | |
Aa/AA | | | 59.11% | |
A | | | 20.10% | |
Not Rated | | | 1.69% | |
| | | | | |
| | | | 100.00% | |
| | | | | |
| COMPOSITION | | | |
| | | % of Net Assets | |
Insured Municipal | | | 52.93% | |
Certificates of Participation | | | 18.81% | |
Municipal Utility Revenue | | | 9.45% | |
Prerefunded | | | 5.45% | |
Hospital and Healthcare Revenue | | | 3.60% | |
Public Facilities Revenue | | | 3.03% | |
University Consolidated Education and Building Revenue | | | 2.79% | |
Lease Revenue | | | 1.04% | |
State and Local Mortgage Revenue | | | 1.00% | |
General Obligation | | | 0.53% | |
Other Assets Less Liabilities | | | 1.37% | |
| | | | | |
| | | | 100.00% | |
| | | | | |
v
| | | | | | |
| | The illustrations below provide each Fund’s sector allocation and summarize key information about each Fund’s investments. | | | Unaudited | |
| | | | |
Kentucky Tax-Free Income Series | | | |
| CREDIT QUALITY (reflects highest credit rating) | | % of Net Assets
at Fair Value | |
Aaa/AAA | | | 9.16% | |
Aa/AA | | | 81.32% | |
A | | | 3.52% | |
Baa/BBB | | | 4.95% | |
Not Rated | | | 1.05% | |
| | | | | |
| | | | 100.00% | |
| | | | | |
| COMPOSITION | | | |
| | | % of Net Assets | |
Insured Municipal | | | 49.82% | |
Prerefunded | | | 11.34% | |
Lease Revenue | | | 10.67% | |
Turnpikes and Toll Roads Revenue | | | 7.74% | |
Municipal Utility Revenue | | | 5.93% | |
Hospital and Healthcare Revenue | | | 3.63% | |
Escrowed to Maturity | | | 3.62% | |
State and Local Mortgage Revenue | | | 3.49% | |
University Consolidated Education and Building Revenue | | | 1.62% | |
Public Facilities Revenue | | | 0.74% | |
General Obligation | | | 0.12% | |
Other Assets Less Liabilities | | | 1.28% | |
| | | | | |
| | | | 100.00% | |
| | | | | |
| | | | |
Kentucky Tax-Free Short-to-Medium Series | | | |
| CREDIT QUALITY (reflects highest credit rating) | | % of Net Assets
at Fair Value | |
Aaa/AAA | | | 13.03% | |
Aa/AA | | | 81.34% | |
A | | | 4.54% | |
Baa/BBB | | | 1.09% | |
Not Rated | | | 0.00% | |
| | | | | |
| | | | 100.00% | |
| | | | | |
| COMPOSITION | | | |
| | | % of Net Assets | |
Insured Municipal | | | 73.86% | |
Lease Revenue | | | 12.77% | |
Municipal Utility Revenue | | | 3.11% | |
State and Local Mortgage Revenue | | | 2.61% | |
Hospital and Healthcare Revenue | | | 2.16% | |
Turnpikes and Toll Roads Revenue | | | 1.11% | |
Prerefunded | | | 1.07% | |
Certificates of Participation | | | 0.86% | |
University Consolidated Education and Building Revenue | | | 0.56% | |
Public Facilities Revenue | | | 0.12% | |
Other Assets Less Liabilities | | | 1.77% | |
| | | | | |
| | | | 100.00% | |
| | | | | |
| | | | |
Alabama Tax-Free Income Series | | | |
| CREDIT QUALITY (reflects highest credit rating) | | % of Net Assets
at Fair Value | |
Aaa/AAA | | | 6.18% | |
Aa/AA | | | 71.60% | |
A | | | 15.50% | |
Baa/BBB | | | 1.14% | |
Not Rated | | | 5.58% | |
| | | | | |
| | | | 100.00% | |
| | | | | |
| COMPOSITION | | | |
| | | % of Net Assets | |
Insured Municipal | | | 68.99% | |
University Consolidated Education and Building Revenue | | | 8.82% | |
General Obligation | | | 7.91% | |
Municipal Utility Revenue | | | 5.05% | |
Lease Revenue | | | 3.03% | |
Prerefunded | | | 2.61% | |
Escrowed to Maturity | | | 1.53% | |
Public Facilities Revenue | | | 0.44% | |
Industrial Revenue | | | 0.11% | |
Other Assets Less Liabilities | | | 1.51% | |
| | | | | |
| | | | 100.00% | |
| | | | | |
| | | | |
Mississippi Tax-Free Income Series | | | |
| CREDIT QUALITY (reflects highest credit rating) | | % of Net Assets
at Fair Value | |
Aaa/AAA | | | 9.81% | |
Aa/AA | | | 73.64% | |
A | | | 12.75% | |
Baa/BBB | | | 2.72% | |
Not Rated | | | 1.08% | |
| | | | | |
| | | | 100.00% | |
| | | | | |
| COMPOSITION | | | |
| | | % of Net Assets | |
Insured Municipal | | | 60.94% | |
University Consolidated Education and Building Revenue | | | 12.97% | |
General Obligation | | | 7.42% | |
Prerefunded | | | 6.11% | |
Public Facilities Revenue | | | 4.25% | |
Turnpikes and Toll Roads Revenue | | | 3.12% | |
Lease Revenue | | �� | 3.10% | |
Escrowed to Maturity | | | 0.42% | |
Other Assets Less Liabilities | | | 1.67% | |
| | | | | |
| | | | 100.00% | |
| | | | | |
vi
| | | | | | |
| | The illustrations below provide each Fund’s sector allocation and summarize key information about each Fund’s investments. | | | Unaudited | |
| | | | |
Intermediate Government Bond Series | | | |
| CREDIT QUALITY (reflects highest credit rating) | | % of Net Assets
at Fair Value | |
Aaa/AAA | | | 100.00% | |
| | | | | |
| | |
| COMPOSITION | | | |
| | | % of Net Assets | |
Federal Farm Credit | | | 59.82% | |
Federal Home Loan Bank | | | 27.36% | |
Federal Home Loan Mortgage | | | 5.53% | |
Student Loan Marketing Association | | | 3.89% | |
Other Assets Less Liabilities | | | 3.40% | |
| | | | | |
| | | | 100.00% | |
| | | | | |
| | | | |
Taxable Municipal Bond Series | | | |
| CREDIT QUALITY (reflects highest credit rating) | | % of Net Assets
at Fair Value | |
Aaa/AAA | | | 0.00% | |
Aa/AA | | | 92.32% | |
A | | | 7.68% | |
| | | | | |
| | | | 100.00% | |
| | | | | |
| COMPOSITION | | | |
| | | % of Net Assets | |
Insured Municipal | | | 22.06% | |
General Obligation | | | 18.44% | |
Certificates of Participation | | | 17.92% | |
Lease Revenue | | | 14.93% | |
Municipal Utility Revenue | | | 11.22% | |
Public Facilities Revenue | | | 5.97% | |
University Consolidated Education and Building Revenue | | | 3.92% | |
Turnpikes and Toll Roads Revenue | | | 2.15% | |
State and Local Mortgage Revenue | | | 1.98% | |
Other Assets Less Liabilities | | | 1.41% | |
| | | | | |
| | | | 100.00% | |
| | | | | |
vii
PERFORMANCE COMPARISON (Unaudited)
The following graphs compare the change in value of a $10,000 investment in each series of Dupree Mutual Funds with the change in value of a $10,000 investment in a comparable index. The comparisons are made over 10 years or since the inception of the series, if shorter than ten years. Results are for the fiscal years ended June 30.
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xiii
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xviii
Notes on Graphs:
Results reflect reinvestment of all dividend and capital gain distributions. No index can perfectly match the investments that make up a fund’s portfolio. For each series, we have selected an index that we believe gives the most accurate picture of how the series performed during the reporting period. The investor should understand that an index is a mathematical hypothesis and does not reflect a real market situation. For example, the portfolio of each index is replaced with an entirely different portfolio each year without reflecting operating expenses or transaction costs, an impossibility in reality. On the other hand, the fund’s performance reflects not only these factors but management costs as well. Past performance is not indicative of future results.
The performance tables and the graphs above do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares.
Please note that all legacy Lehman Brothers benchmark indices were rebranded as Barclays Capital (“BarCap”) indices in November 2008.
xix
DUPREE MUTUAL FUNDS — ALABAMA TAX-FREE INCOME SERIES | |
SCHEDULE OF PORTFOLIO INVESTMENTS
Alabama Municipal Bonds — 100% of Net Assets
June 30, 2012
| | | | | | | | | | | | | | | | | | |
| Bond Description | | Coupon | | | Maturity
Date | | | Rating# | | Par Value | | | Fair Value | |
| | | | | | | | | | | | | | | | | | |
| INSURED MUNICIPAL BONDS | | | | | | | | | | | | | | | | | | |
| 68.99% of Net Assets | | | | | | | | | | | | | | | | | | |
AL Drinking Water Finance Authority Revolving Fund Loan | | | 4.750 | % | | | 08/15/2027 | | | NR | | $ | 75,000 | | | $ | 76,193 | |
AL Housing Finance Authority Single Family Mortgage Revenue | | | 5.375 | | | | 10/01/2033 | | | Aaa | | | 175,000 | | | | 185,311 | |
AL Private College & Universities Facilities Authority Revenue | | | 4.750 | | | | 09/01/2026 | | | AA-* | | | 500,000 | | | | 513,005 | |
AL State Board Education Bishop State Community College | | | 4.600 | | | | 01/01/2021 | | | A1 | | | 100,000 | | | | 101,053 | |
AL State University Revenue General Tuition and Fee | | | 5.250 | | | | 09/01/2034 | | | Aa3/AA-* | | | 75,000 | | | | 83,408 | |
AL Water Pollution Control Authority Revolving Fund Loan | | | 4.800 | | | | 08/15/2018 | | | NR | | | 50,000 | | | | 50,029 | |
AL Water Pollution Control Authority Revolving Fund Loan | | | 4.800 | | | | 08/15/2022 | | | NR | | | 170,000 | | | | 170,995 | |
AL Water Pollution Control Authority Revolving Fund Loan | | | 5.000 | | | | 08/15/2026 | | | NR | | | 130,000 | | | | 130,454 | |
Albertville AL Warrants | | | 5.000 | | | | 02/01/2035 | | | AA-* | | | 110,000 | | | | 122,365 | |
Anniston AL Public Building Authority | | | 5.000 | | | | 03/01/2032 | | | Aa3/AA-* | | | 400,000 | | | | 443,892 | |
Auburn AL Capital Improvement School Warrants | | | 5.000 | | | | 08/01/2030 | | | Aa2/AA+* | | | 260,000 | | | | 275,696 | |
Auburn University AL General Fee Revenue — Series A | | | 5.000 | | | | 06/01/2032 | | | Aa2/AA-* | | | 45,000 | | | | 49,460 | |
Auburn University AL General Fee Revenue — Series A | | | 5.000 | | | | 06/01/2027 | | | Aa2/AA-* | | | 300,000 | | | | 331,887 | |
Auburn University AL General Fee Revenue — Series A | | | 5.000 | | | | 06/01/2033 | | | Aa2/AA-* | | | 420,000 | | | | 456,158 | |
Auburn University AL General Fee Revenue — Series A | | | 5.000 | | | | 06/01/2038 | | | Aa2/AA-* | | | 600,000 | | | | 644,562 | |
Baldwin County AL Water and Sewer Series A General Obligation | | | 5.000 | | | | 01/01/2025 | | | Aa1/AA+* | | | 295,000 | | | | 318,163 | |
Bessemer AL Public Educational Building Authority Revenue | | | 5.000 | | | | 07/01/2030 | | | AA-* | | | 250,000 | | | | 281,180 | |
Chatom AL Industrial Board Gulf Opportunity Zone | | | 5.000 | | | | 08/01/2037 | | | Aa3/AA-*/A-@ | | | 150,000 | | | | 163,739 | |
Choctaw County AL Revenue School Warrants | | | 4.700 | | | | 03/01/2017 | | | NR | | | 200,000 | | | | 195,722 | |
Cullman AL Utility Board Water Revenue | | | 4.750 | | | | 09/01/2037 | | | Aa3/AA-* | | | 400,000 | | | | 431,416 | |
Cullman County AL Water Revenue | | | 5.000 | | | | 05/01/2021 | | | Baa2/A+* | | | 125,000 | | | | 133,970 | |
Daphne AL Warrants | | | 5.000 | | | | 04/01/2023 | | | Aa2/AA* | | | 250,000 | | | | 274,050 | |
Elmore County AL Limited Obligation School Warrants | | | 5.000 | | | | 02/01/2022 | | | Aa3/AA-* | | | 190,000 | | | | 203,163 | |
Elmore County AL Public Education Cooperative | | | 5.000 | | | | 08/01/2032 | | | Aa3 | | | 50,000 | | | | 52,468 | |
Enterprise AL Warrants General Obligation | | | 5.000 | | | | 10/01/2019 | | | NR | | | 55,000 | | | | 58,394 | |
Enterprise AL Warrants General Obligation | | | 5.000 | | | | 10/01/2023 | | | NR | | | 450,000 | | | | 470,866 | |
Huntsville AL Health Care Authority — Series A | | | 5.000 | | | | 06/01/2024 | | | A1/BBB* | | | 100,000 | | | | 105,209 | |
Huntsville AL Public Building Authority Lease Revenue | | | 5.000 | | | | 10/01/2027 | | | Aa1/AA+* | | | 375,000 | | | | 406,260 | |
Huntsville AL Public Building Authority Lease Revenue | | | 5.000 | | | | 10/01/2033 | | | Aa1/AA+* | | | 175,000 | | | | 186,872 | |
Huntsville AL Water Systems Revenue | | | 5.000 | | | | 11/01/2033 | | | Aa1/AAA* | | | 300,000 | | | | 326,205 | |
Jacksonville AL State University Revenue Tuition and Fee | | | 5.125 | | | | 12/01/2033 | | | AA-* | | | 450,000 | | | | 484,475 | |
Lee County AL School Warrants Limited Obligation | | | 5.000 | | | | 02/01/2021 | | | Aa2 | | | 75,000 | | | | 76,313 | |
Limestone County AL Water & Sewer Authority Water Revenue | | | 5.000 | | | | 12/01/2029 | | | A+* | | | 275,000 | | | | 286,151 | |
Lowndes County AL Warrants | | | 5.250 | | | | 02/01/2037 | | | Aa3/AA-* | | | 250,000 | | | | 270,660 | |
Madison County AL Board of Education Capital Outlay Tax | | | 4.950 | | | | 09/01/2025 | | | Aa3/AA-* | | | 100,000 | | | | 111,325 | |
Madison County AL Board of Education Capital Outlay Tax | | | 5.100 | | | | 09/01/2028 | | | Aa3/AA-* | | | 285,000 | | | | 315,267 | |
Madison County AL Board of Education Capital Outlay Tax | | | 5.125 | | | | 09/01/2034 | | | Aa3/AA-* | | | 505,000 | | | | 547,257 | |
Mobile AL Limited Obligation Tax Warrants | | | 5.500 | | | | 02/15/2023 | | | Ba2 | | | 35,000 | | | | 35,414 | |
Mobile AL Public Education Building Authority | | | 5.000 | | | | 03/01/2033 | | | Aa3/AA-*/AA-@ | | | 200,000 | | | | 215,516 | |
Montgomery AL Waterworks & Sanitation Sewer Board Revenue | | | 5.000 | | | | 03/01/2025 | | | Aa1/AAA* | | | 250,000 | | | | 279,538 | |
Montgomery County AL Warrants | | | 5.000 | | | | 03/01/2028 | | | Aa1/AA* | | | 175,000 | | | | 191,503 | |
Montgomery County AL Public Building Authority Revenue | | | 5.000 | | | | 03/01/2031 | | | Aa2/AA-* | | | 175,000 | | | | 184,272 | |
Morgan County AL Water and Sewer General Obligation Warrants | | | 5.000 | | | | 04/01/2028 | | | Aa3 | | | 100,000 | | | | 102,974 | |
Morgan County AL Warrants | | | 5.000 | | | | 04/01/2029 | | | Aa3 | | | 25,000 | | | | 25,696 | |
Muscle Shoals AL Refunded Warrants | | | 4.600 | | | | 08/01/2024 | | | Aa3 | | | 250,000 | | | | 258,600 | |
North Marshall AL Utilities Board Water Revenue | | | 5.100 | | | | 10/01/2030 | | | AA-* | | | 375,000 | | | | 413,963 | |
Opelika AL Water Board Revenue | | | 5.000 | | | | 06/01/2037 | | | Aa3/AA-* | | | 250,000 | | | | 274,148 | |
Oxford AL Warrants — Series A | | | 5.000 | | | | 10/01/2036 | | | Aa2 | | | 50,000 | | | | 52,654 | |
Phenix City AL Schools Warrants — Series B | | | 5.000 | | | | 08/01/2024 | | | A+* | | | 200,000 | | | | 217,381 | |
Phenix City AL Water & Sewer Revenue | | | 5.000 | | | | 08/15/2034 | | | Aa3/AA-*/AA-@ | | | 90,000 | | | | 98,864 | |
St Clair County AL Board Education School Tax Warrants | | | 4.400 | | | | 02/01/2022 | | | Aa3/AA-* | | | 50,000 | | | | 51,052 | |
Shelby County AL Board of Education Special Tax School Warrants | | | 5.000 | | | | 02/01/2025 | | | Aa3/A+* | | | 300,000 | | | | 329,592 | |
Talladega County AL Industrial Development Revenue | | | 4.700 | | | | 01/01/2022 | | | Baa3 | | | 100,000 | | | | 100,327 | |
Tallassee AL Water Gas & Sewer Warrants | | | 5.125 | | | | 05/01/2036 | | | Aa3/AA-* | | | 75,000 | | | | 83,724 | |
Troy AL Public Educational Building Authority Educational | | | 5.250 | | | | 12/01/2036 | | | Aa3/AA-* | | | 225,000 | | | | 248,319 | |
Trussville AL Warrants | | | 4.800 | | | | 10/01/2021 | | | Aa2 | | | 85,000 | | | | 86,369 | |
The accompanying footnotes are an integral part of the financial statements.
1
DUPREE MUTUAL FUNDS — ALABAMA TAX-FREE INCOME SERIES | |
SCHEDULE OF PORTFOLIO INVESTMENTS
Alabama Municipal Bonds — 100% of Net Assets
June 30, 2012
| | | | | | | | | | | | | | | | | | |
| Bond Description | | Coupon | | | Maturity
Date | | | Rating# | | Par Value | | | Fair Value | |
| | | | | | | | | | | | | | | | | | |
Tuscaloosa AL Warrants | | | 5.000 | % | | | 01/01/2030 | | | Aa1/AA+* | | $ | 150,000 | | | $ | 157,040 | |
Tuscaloosa AL Public Education Building Authority Student | | | 6.375 | | | | 07/01/2028 | | | AA-* | | | 250,000 | | | | 292,758 | |
Tuscaloosa AL Public Education Building Authority Student | | | 6.750 | | | | 07/01/2033 | | | AA-* | | | 495,000 | | | | 583,511 | |
University of AL General Revenue — Series A | | | 5.000 | | | | 07/01/2032 | | | Aa2/AA-*/AA+@ | | | 500,000 | | | | 552,990 | |
University of AL General Revenue — Series A | | | 5.000 | | | | 07/01/2034 | | | Aa2/AA-*/AA+@ | | | 350,000 | | | | 366,660 | |
University of AL General Revenue — Series A | | | 5.000 | | | | 07/01/2028 | | | Aa2/AA-*/AA+@ | | | 325,000 | | | | 361,422 | |
University South AL University Revenues Refunding Tuition | | | 5.000 | | | | 12/01/2029 | | | Aa1/AA+* | | | 105,000 | | | | 117,935 | |
University of Southern AL University Revenues Facilities | | | 5.000 | | | | 08/01/2029 | | | Aa1/AA+* | | | 550,000 | | | | 603,086 | |
University of South AL University Revenues Facilities | | | 4.750 | | | | 08/01/2033 | | | Aa1/AA+* | | | 100,000 | | | | 106,516 | |
West Morgan East Lawrence AL Water & Sewer Revenue | | | 4.750 | | | | 08/15/2030 | | | AA-* | | | 75,000 | | | | 81,635 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 15,807,052 | |
| UNIVERSITY CONSOLIDATED EDUCATION AND BUILDING REVENUE BONDS | |
| 8.82% of Net Assets | | | | | | | | | | | | | | | | | | |
AL State Public School & College Authority Captial Improvement | | | 5.000 | | | | 12/01/2024 | | | Aa1/AA* | | | 100,000 | | | | 114,566 | |
AL State Public School & College Authority Capital Improvement | | | 5.000 | | | | 12/01/2025 | | | Aa1/AA* | | | 640,000 | | | | 730,758 | |
AL State Public Schools & College Authority Refinancing | | | 5.000 | | | | 05/01/2024 | | | Aa1/AA*/AA+@ | | | 125,000 | | | | 145,724 | |
Auburn University AL General Fee Revenue | | | 5.000 | | | | 06/01/2022 | | | Aa2/AA-* | | | 50,000 | | | | 58,185 | |
Auburn University General Fee Revenue — Series A | | | 5.000 | | | | 06/01/2036 | | | Aa2/AA-* | | | 150,000 | | | | 168,210 | |
Mobile AL Spring Hill College Educational Building | | | 5.100 | | | | 09/01/2019 | | | Ba2 | | | 120,000 | | | | 120,544 | |
Shelby County AL Board of Education Capital Outlay Warrants | | | 5.000 | | | | 02/01/2031 | | | Aa2/A* | | | 615,000 | | | | 681,937 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 2,019,924 | |
| GENERAL OBLIGATION BONDS | | | | | | | | | | | | | | | | | | |
| 7.91% of Net Assets | | | | | | | | | | | | | | | | | | |
AL State — Series A | | | 4.625 | | | | 09/01/2022 | | | Aa1/AA* | | | 100,000 | | | | 102,420 | |
Mobile AL Refunding Warrants — Series A | | | 5.000 | | | | 02/15/2027 | | | Aa2/AA-* | | | 335,000 | | | | 373,280 | |
Montgomery AL Warrants — Series A | | | 5.000 | | | | 02/01/2030 | | | Aa2/AA+* | | | 300,000 | | | | 338,271 | |
Montgomery AL Warrants — Series C General Obligation Unlimited | | | 5.000 | | | | 01/01/2023 | | | Aa2/AA+* | | | 80,000 | | | | 89,352 | |
Opelika AL Warrants | | | 5.000 | | | | 11/01/2031 | | | Aa2/AA* | | | 150,000 | | | | 171,510 | |
Scottsboro AL Warrants | | | 5.000 | | | | 07/01/2028 | | | A+* | | | 250,000 | | | | 277,120 | |
Sumter County AL Limited Obligation School Warrants | | | 5.100 | | | | 02/01/2034 | | | A* | | | 100,000 | | | | 104,660 | |
Tuscaloosa AL Warrants — Series A | | | 5.000 | | | | 10/15/2034 | | | Aa1/AA+* | | | 175,000 | | | | 191,538 | |
Tuscaloosa AL Warrants — Series A | | | 5.125 | | | | 01/01/2039 | | | Aa1/AA+* | | | 150,000 | | | | 163,707 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 1,811,858 | |
| MUNICIPAL UTILITY REVENUE BONDS | | | | | | | | | | | | | | | | | | |
| 5.05% of Net Assets | | | | | | | | | | | | | | | | | | |
Birmingham AL Waterworks Board Water Revenue — Series A | | | 5.000 | | | | 01/01/2026 | | | Aa2/AA-* | | | 80,000 | | | | 89,574 | |
Jasper AL Water Works and Sewer Board Utility Revenue | | | 5.000 | | | | 06/01/2030 | | | A+* | | | 455,000 | | | | 501,519 | |
Muscle Shoals AL Utilities Board Water & Sewer Revenue | | | 5.750 | | | | 12/01/2033 | | | AA-* | | | 430,000 | | | | 487,048 | |
Opelika AL Water Board Revenue | | | 5.250 | | | | 06/01/2036 | | | Aa3/A+* | | | 70,000 | | | | 78,306 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 1,156,447 | |
| LEASE REVENUE BONDS | | | | | | | | | | | | | | | | | | |
| 3.03% of Net Assets | | | | | | | | | | | | | | | | | | |
AL Incentives Financing Authority Special Obligation | | | 5.000 | | | | 09/01/2029 | | | AA+* | | | 125,000 | | | | 138,466 | |
Anniston AL Public Building Authority DHR Project | | | 5.250 | | | | 05/01/2030 | | | AA-* | | | 50,000 | | | | 56,206 | |
Anniston AL Public Building Authority Revenue | | | 5.500 | | | | 05/01/2033 | | | AA-* | | | 200,000 | | | | 226,180 | |
University of Alabama General Revenue — Series A | | | 5.000 | | | | 07/01/2034 | | | Aa2/AA-* | | | 250,000 | | | | 272,980 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 693,832 | |
| PREREFUNDED BONDS | | | | | | | | | | | | | | | | | | |
| 2.61% of Net Assets | | | | | | | | | | | | | | | | | | |
AL State Board of Education Revenue Calhoun Community | | | 5.000 | | | | 05/01/2022 | | | A1 | | | 450,000 | | | | 492,876 | |
Gadsden AL Warrants — Series B | | | 4.600 | | | | 08/01/2022 | | | NR | | | 100,000 | | | | 105,610 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 598,486 | |
| ESCROWED TO MATURITY BONDS | | | | | | | | | | | | | | | | | | |
| 1.53% of Net Assets | | | | | | | | | | | | | | | | | | |
West Morgan — East Lawrence Water Authority AL Water Revenue | | | 5.000 | | | | 08/15/2025 | | | Aa3/AA-* | | | 300,000 | | | | 351,150 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 351,150 | |
The accompanying footnotes are an integral part of the financial statements.
2
DUPREE MUTUAL FUNDS — ALABAMA TAX-FREE INCOME SERIES | |
SCHEDULE OF PORTFOLIO INVESTMENTS
Alabama Municipal Bonds — 100% of Net Assets
June 30, 2012
| | | | | | | | | | | | | | | | | | |
| Bond Description | | Coupon | | | Maturity
Date | | | Rating# | | Par Value | | | Fair Value | |
| | | | | | | | | | | | | | | | | | |
| PUBLIC FACILITIES REVENUE BONDS | | | | | | | | | | | | | | | | | | |
| .44% of Net Assets | | | | | | | | | | | | | | | | | | |
Sumter County AL Limited Obligation School Warrants | | | 5.200 | % | | | 02/01/2039 | | | A* | | $ | 95,000 | | | $ | 99,912 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 99,912 | |
| INDUSTRIAL REVENUE BONDS | | | | | | | | | | | | | | | | | | |
| .11% of Net Assets | | | | | | | | | | | | | | | | | | |
Auburn AL Industrial Development Board Facilities Revenue | | | 6.200 | | | | 11/01/2020 | | | A* | | | 25,000 | | | | 25,028 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 25,028 | |
| | | | | | | | | | | | | | | | | | |
Total Investments (cost $21,221,868)(See (a) below for further explanation) 98.49% of Net Assets | | | | | | | | | $ | 22,563,689 | |
| | | | | | | | | | | | | | | | | | |
| | * | | Standard and Poor’s Corporation |
| | @ | | Fitch’s Investors Service |
| | | | (All other ratings by Moody’s Investors Service, Inc.) |
| | # | | Bond ratings are unaudited and not covered by Report of Independent Registered Public Accounting Firm. |
| (a) | | Represents cost for financial reporting and federal income tax purposes and differs from fair value by net unrealized appreciation of securities as follows: |
| | | | | | |
| | | | | | |
| | Unrealized appreciation | | $ | 1,369,303 | |
| | Unrealized depreciation | | | (27,482 | ) |
| | | | | | |
| | Net unrealized appreciation | | $ | 1,341,821 | |
| | | | | | |
Other Information
The following is a summary of the inputs used, as of June 30, 2012 involving the Fund’s investments in securities carried at fair value. The inputs or methodology used for valuing securities may not be an indication of the risk associated with investing in those securities. For more information on valuation inputs, and their aggregation into the levels used in the table below, please refer to the Security Valuation section in the accompanying Notes to Financial Statements.
| | | | | | |
| | | | | | |
| | | Valuation Inputs | | Municipal Bonds | |
Level 1 | | Quoted Prices | | $ | — | |
Level 2 | | Other Significant Observable Inputs | | | 22,563,689 | |
Level 3 | | Significant Unobservable Inputs | | | — | |
| | | | | | |
| | | | $ | 22,563,689 | |
| | | | | | |
The accompanying footnotes are an integral part of the financial statements.
3
ALABAMA TAX-FREE INCOME SERIES
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2012
| | | | | | | | |
ASSETS: | | | | | | | | |
Investments in securities, at fair value (Cost: $21,221,868) | | | | | | $ | 22,563,689 | |
Cash | | | | | | | 161,126 | |
Interest receivable | | | | | | | 306,606 | |
| | | | | | | | |
Total assets | | | | | | | 23,031,421 | |
LIABILITIES: | | | | | | | | |
Payable for: | | | | | | | | |
Distributions to shareholders | | | 98,459 | | | | | |
Fund shares redeemed | | | 2,968 | | | | | |
Investment advisory fee | | | 7,409 | | | | | |
Transfer agent fee | | | 3,497 | | | | | |
Trustees fees | | | 61 | | | | | |
Accrued expenses | | | 8,144 | | | | | |
| | | | | | | | |
Total liabilities | | | | | | | 120,538 | |
| | | | | | | | |
NET ASSETS: | | | | | | | | |
Capital | | | | | | | 21,552,869 | |
Accumulated net investment income | | | | | | | 427 | |
Net accumulated realized gain on investment transactions | | | | | | | 15,766 | |
Net unrealized appreciation in value of investments | | | | | | | 1,341,821 | |
| | | | | | | | |
Net assets at value | | | | | | $ | 22,910,883 | |
| | | | | | | | |
NET ASSET VALUE, offering price and redemption price per share ($22,910,883 -:- 1,846,465
shares outstanding; unlimited number of shares authorized; no par value) | | | | | | $ | 12.41 | |
| | | | | | | | |
STATEMENT OF OPERATIONS
For the year ended June 30, 2012
| | | | |
Net investment income: | | | | |
Interest income | | $ | 930,380 | |
| | | | |
Expenses: | | | | |
Investment advisory fee | | | 108,756 | |
Transfer agent fee | | | 32,995 | |
Custodian expense | | | 6,642 | |
Professional fees | | | 1,459 | |
Trustees fees | | | 3,013 | |
Other expenses | | | 18,354 | |
| | | | |
Total expenses | | | 171,219 | |
Fees waived by Adviser | | | (22,407 | ) |
Custodian expense reduction | | | (84 | ) |
| | | | |
Net expenses | | | 148,728 | |
| | | | |
Net investment income | | | 781,652 | |
| | | | |
Realized and unrealized gain/(loss) on investments: | | | | |
Net realized gain | | | 64,847 | |
Net change in unrealized appreciation/depreciation | | | 1,168,601 | |
| | | | |
Net realized and unrealized gain on investments | | | 1,233,448 | |
| | | | |
Net increase in net assets resulting from operations | | $ | 2,015,100 | |
| | | | |
The accompanying notes are an integral part of the financial statements.
4
ALABAMA TAX-FREE INCOME SERIES
STATEMENTS OF CHANGES IN NET ASSETS
For the years ended June 30, 2012 and 2011
| | | | | | | | |
| | | 2012 | | | 2011 | |
Operations: | | | | | | | | |
Net investment income | | $ | 781,652 | | | $ | 774,546 | |
Net realized gain on investments | | | 64,847 | | | | 29,066 | |
Net change in unrealized appreciation/depreciation | | | 1,168,601 | | | | (138,138 | ) |
| | | | | | | | |
Net increase in net assets resulting from operations | | | 2,015,100 | | | | 665,474 | |
Distributions from net investment income | | | (781,225 | ) | | | (774,546 | ) |
Distributions from capital gains | | | (12,037 | ) | | | — | |
Net fund share transactions (Note 4) | | | 454,495 | | | | 1,490,590 | |
| | | | | | | | |
Total increase | | | 1,676,333 | | | | 1,381,518 | |
Net assets: | | | | | | | | |
Beginning of year | | | 21,234,550 | | | | 19,853,032 | |
| | | | | | | | |
End of year | | $ | 22,910,883 | | | $ | 21,234,550 | |
| | | | | | | | |
Accumulated Net Investment Income | | $ | 427 | | | $ | — | |
| | | | | | | | |
FINANCIAL HIGHLIGHTS
| | | | | | | | | | | | | | | | | | | | |
| Selected data for a share outstanding: | | For the years ended June 30, | |
| | | 2012 | | | 2011 | | | 2010 | | | 2009 | | | 2008 | |
Net asset value, beginning of year | | | $11.72 | | | | $11.77 | | | | $11.40 | | | | $11.43 | | | | $11.59 | |
| | | | | | | | | | | | | | | | | | | | |
Income from investment operations: | | | | | | | | | | | | | | | | | | | | |
Net investment income | | | 0.44 | | | | 0.45 | | | | 0.46 | | | | 0.46 | | | | 0.46 | |
Net gains/(losses) on securities, both realized and unrealized | | | 0.70 | | | | (0.05 | ) | | | 0.37 | | | | (0.03 | ) | | | (0.14 | ) |
| | | | | | | | | | | | | | | | | | | | |
Total from investment operations | | | 1.14 | | | | 0.40 | | | | 0.83 | | | | 0.43 | | | | 0.32 | |
Less distributions: | | | | | | | | | | | | | | | | | | | | |
Distributions from net investment income | | | (0.44 | ) | | | (0.45 | ) | | | (0.46 | ) | | | (0.46 | ) | | | (0.46 | ) |
Distributions from capital gains | | | (0.01 | ) | | | — | | | | — | | | | — | | | | (0.02 | ) |
| | | | | | | | | | | | | | | | | | | | |
Total distributions | | | (0.45 | ) | | | (0.45 | ) | | | (0.46 | ) | | | (0.46 | ) | | | (0.48 | ) |
| | | | | | | | | | | | | | | | | | | | |
Net asset value, end of year | | | $12.41 | | | | $11.72 | | | | $11.77 | | | | $11.40 | | | | $11.43 | |
| | | | | | | | | | | | | | | | | | | | |
Total return | | | 9.81% | | | | 3.45% | | | | 7.40% | | | | 3.95% | | | | 2.84% | |
Net assets, end of year (in thousands) | | | $22,911 | | | | $21,235 | | | | $19,853 | | | | $14,262 | | | | $13,537 | |
Ratio of net expenses to average net assets (a) | | | 0.68% | | | | 0.60% | | | | 0.47% | | | | 0.45% | | | | 0.45% | |
Ratio of net investment income to average net assets | | | 3.59% | | | | 3.83% | | | | 3.94% | | | | 4.14% | | | | 4.00% | |
Portfolio turnover | | | 7.80% | | | | 4.70% | | | | 15.73% | | | | 14.06% | | | | 8.46% | |
| (a) | | Percentages are after expenses waived by Adviser and Custodian. No recovery of these waivers and reductions will be sought. Expenses waived by Adviser and Custodian were: .10 and 0% for 2012;.18% and 0% for 2011; .33% and 0% for 2010; .37% and .03% for 2009; and .35% and .04% for 2008, respectively. |
The accompanying notes are an integral part of the financial statements.
5
DUPREE MUTUAL FUNDS — KENTUCKY TAX-FREE INCOME SERIES
SCHEDULE OF PORTFOLIO INVESTMENTS
Kentucky Municipal Bonds — 100% of Net Assets
June 30, 2012
| | | | | | | | | | | | | | | | | | |
| Bond Description | | Coupon | | | Maturity
Date | | | Rating# | | Par Value | | | Fair Value | |
| | | | | | | | | | | | | | | | | | |
| INSURED MUNICIPAL BONDS | | | | | | | | | | | | | | | | | | |
| 49.82% of Net Assets | | | | | | | | | | | | | | | | | | |
Boone County KY Pollution Control Revenue — Dayton Power | | | 4.700 | % | | | 01/01/2028 | | | A3/BBB+* | | $ | 6,195,000 | | | $ | 6,364,371 | |
Boyle County KY College Improvement — Centre College — A | | | 4.750 | | | | 06/01/2032 | | | Aa3/AA-* | | | 5,330,000 | | | | 5,655,930 | |
Bullitt County KY School District Finance Corporation | | | 4.500 | | | | 10/01/2024 | | | Aa3 | | | 2,720,000 | | | | 2,850,098 | |
Campbell & Kenton Counties Sanitary District No. 1 | | | 5.000 | | | | 08/01/2025 | | | Aa2/AA* | | | 2,395,000 | | | | 2,717,367 | |
Campbell & Kenton Counties Sanitary Sewer | | | 5.000 | | | | 08/01/2026 | | | Aa2/AA* | | | 4,175,000 | | | | 4,734,784 | |
Campbell & Kenton Counties Sanitary Sewer | | | 5.000 | | | | 08/01/2027 | | | Aa2/AA* | | | 4,385,000 | | | | 4,936,940 | |
Campbell & Kenton Counties Sanitary District No. 1 | | | 5.000 | | | | 08/01/2037 | | | Aa2/AA* | | | 11,220,000 | | | | 12,315,857 | |
Campbell County KY School District Finance Corporation | | | 4.500 | | | | 08/01/2023 | | | Aa3 | | | 980,000 | | | | 1,075,717 | |
Eastern Kentucky University Consolidated Educational Building | | | 5.000 | | | | 05/01/2021 | | | A1/A* | | | 1,580,000 | | | | 1,672,477 | |
Franklin County School Building Revenue | | | 4.750 | | | | 05/01/2027 | | | Aa3 | | | 3,570,000 | | | | 3,954,453 | |
Greater KY Housing Assistance Corporation — Chenowith Woods | | | 6.100 | | | | 01/01/2024 | | | Baa2/BBB* | | | 425,000 | | | | 425,621 | |
Greater KY Housing Assistance Corporation — Northside Apts | | | 6.200 | | | | 02/01/2025 | | | AA+* | | | 3,320,000 | | | | 3,322,922 | |
Hardin County School District Finance Corporation | | | 4.750 | | | | 06/01/2027 | | | Aa3 | | | 1,250,000 | | | | 1,339,325 | |
Jefferson County KY Health Facilities University Medical Center | | | 5.500 | | | | 07/01/2017 | | | Baa2/BBB* | | | 8,675,000 | | | | 8,677,342 | |
Jefferson County KY School District Finance Corporation | | | 4.750 | | | | 12/01/2026 | | | Aa2/AA-* | | | 3,770,000 | | | | 4,073,711 | |
Jefferson County KY School District Finance Corporation | | | 4.500 | | | | 07/01/2023 | | | Aa2/AA-* | | | 2,500,000 | | | | 2,704,325 | |
Jefferson County KY School District Finance Corporation | | | 4.625 | | | | 07/01/2025 | | | Aa2/AA-* | | | 7,545,000 | | | | 8,095,785 | |
Jefferson County KY School District Finance Corporation | | | 5.000 | | | | 07/01/2026 | | | Aa2/AA-* | | | 5,025,000 | | | | 5,472,979 | |
Jefferson County KY Health Facilities — Alliant Health | | | 5.125 | | | | 10/01/2017 | | | Baa2/BBB*/A-@ | | | 1,410,000 | | | | 1,411,692 | |
Jefferson County School District Finance Corporation | | | 4.750 | | | | 06/01/2027 | | | Aa2/AA-* | | | 3,000,000 | | | | 3,227,130 | |
KY Asset Liability Commission General Fund | | | 5.000 | | | | 05/01/2020 | | | Aa3/A+*/AA-@ | | | 2,000,000 | | | | 2,177,460 | |
KY Asset Liability Commission Project Notes | | | 5.000 | | | | 05/01/2023 | | | Aa3/A+*/AA-@ | | | 5,600,000 | | | | 6,037,080 | |
KY Asset Liability Commission General Fund | | | 5.000 | | | | 05/01/2024 | | | Aa3/A+*/AA-@ | | | 5,880,000 | | | | 6,328,820 | |
KY Asset Liability Commission | | | 5.000 | | | | 05/01/2025 | | | Aa3/A+*/AA-@ | | | 1,000,000 | | | | 1,080,340 | |
KY Asset Liability Commission Federal Highway | | | 5.250 | | | | 09/01/2019 | | | Aa2/AA*/AA-@ | | | 1,765,000 | | | | 2,168,956 | |
KY Asset Liability Commission University of KY Project Notes | | | 5.000 | | | | 10/01/2024 | | | Aa2/AA-* | | | 5,445,000 | | | | 6,220,804 | |
KY Asset Liability Commission University of KY Project Notes | | | 5.000 | | | | 10/01/2026 | | | Aa2/AA-* | | | 6,090,000 | | | | 6,918,788 | |
KY Asset Liability Commission University of KY Project Notes | | | 5.000 | | | | 10/01/2023 | | | Aa2/AA-* | | | 8,075,000 | | | | 8,901,719 | |
KY Asset Liability Commission University of KY Project Notes | | | 5.000 | | | | 10/01/2024 | | | Aa2/AA-* | | | 7,405,000 | | | | 8,135,948 | |
KY Asset Liability Commission University of KY Project Notes | | | 5.000 | | | | 10/01/2025 | | | Aa2/AA-* | | | 3,700,000 | | | | 4,046,801 | |
KY Economic Development Finance Authority — Christian Care | | | 5.375 | | | | 11/20/2035 | | | AA+* | | | 1,905,000 | | | | 2,019,605 | |
KY Housing Corporation | | | 4.400 | | | | 01/01/2017 | | | Aaa/AAA* | | | 1,000,000 | | | | 1,023,570 | |
KY Housing Corporation | | | 4.650 | | | | 07/01/2023 | | | Aaa/AAA* | | | 3,595,000 | | | | 3,595,360 | |
KY Housing Corporation Country Place Apartments | | | 4.750 | | | | 04/20/2031 | | | AA+* | | | 935,000 | | | | 976,477 | |
KY Housing Corporation | | | 5.750 | | | | 07/01/2039 | | | Aaa/AAA* | | | 505,000 | | | | 531,533 | |
KY State Property & Building #93 | | | 5.250 | | | | 02/01/2025 | | | Aa3/AA-*/AA-@ | | | 7,250,000 | | | | 8,311,763 | |
KY State Property & Building #93 | | | 4.875 | | | | 02/01/2028 | | | Aa3/AA-*/AA-@ | | | 500,000 | | | | 550,945 | |
KY State Property & Building #93 | | | 5.250 | | | | 02/01/2028 | | | Aa3/AA-*/AA-@ | | | 10,000,000 | | | | 11,323,000 | |
KY State Property & Building #93 | | | 5.000 | | | | 02/01/2029 | | | Aa3/AA-*/AA-@ | | | 500,000 | | | | 554,635 | |
KY State Property & Building #93 | | | 5.250 | | | | 02/01/2029 | | | Aa3/AA-*/AA-@ | | | 22,390,000 | | | | 25,266,667 | |
KY State Property & Building #76 | | | 5.500 | | | | 08/01/2021 | | | Aa3/A+*/AA-@ | | | 1,400,000 | | | | 1,773,408 | |
KY State Property & Building #87 | | | 5.000 | | | | 03/01/2019 | | | Aa3/A+*/AA-@ | | | 3,000,000 | | | | 3,426,810 | |
KY State Property & Building #83 | | | 5.000 | | | | 10/01/2017 | | | Aa3/A+*/AA-@ | | | 5,000,000 | | | | 5,928,350 | |
KY State Property & Building #83 | | | 5.000 | | | | 10/01/2018 | | | Aa3/A+*/AA-@ | | | 17,750,000 | | | | 21,328,400 | |
KY State Property & Building #83 | | | 5.250 | | | | 10/01/2020 | | | Aa3/A+*/AA-@ | | | 24,220,000 | | | | 29,974,188 | |
KY State Property & Building #84 | | | 5.000 | | | | 08/01/2019 | | | Aa3/A+*/AA-@ | | | 10,000,000 | | | | 12,113,100 | |
KY State Property & Building #84 | | | 5.000 | | | | 08/01/2021 | | | Aa3/A+*/AA-@ | | | 310,000 | | | | 379,713 | |
KY State Property & Building #84 | | | 5.000 | | | | 08/01/2022 | | | Aa3/A+*/AA-@ | | | 17,500,000 | | | | 21,502,250 | |
KY State Property & Building #87 | | | 5.000 | | | | 03/01/2022 | | | Aa3/A+*/AA-@ | | | 1,665,000 | | | | 1,852,079 | |
KY State Property & Building #87 | | | 5.000 | | | | 03/01/2023 | | | Aa3/A+*/AA-@ | | | 5,175,000 | | | | 5,729,915 | |
KY State Property & Building #87 | | | 5.000 | | | | 03/01/2025 | | | Aa3/A+*/AA-@ | | | 14,835,000 | | | | 16,240,765 | |
KY State Property & Building #87 | | | 5.000 | | | | 03/01/2026 | | | Aa3/A+*/AA-@ | | | 8,230,000 | | | | 8,987,242 | |
KY State Property & Building #87 | | | 5.000 | | | | 03/01/2027 | | | Aa3/A+*/AA-@ | | | 10,290,000 | | | | 11,152,405 | |
KY State Property & Building #88 | | | 4.750 | | | | 11/01/2027 | | | Aa3/A+*/AA-@ | | | 5,800,000 | | | | 6,279,196 | |
KY State Property & Building #89 | | | 5.000 | | | | 11/01/2025 | | | Aa3/AA-*/AA-@ | | | 5,000,000 | | | | 5,637,700 | |
KY State Property & Building #89 | | | 5.000 | | | | 11/01/2026 | | | Aa3/AA-*/AA-@ | | | 13,390,000 | | | | 14,998,808 | |
The accompanying footnotes are an integral part of the financial statements.
6
DUPREE MUTUAL FUNDS — KENTUCKY TAX-FREE INCOME SERIES
SCHEDULE OF PORTFOLIO INVESTMENTS
Kentucky Municipal Bonds — 100% of Net Assets
June 30, 2012
| | | | | | | | | | | | | | | | | | |
| Bond Description | | Coupon | | | Maturity
Date | | | Rating# | | Par Value | | | Fair Value | |
| | | | | | | | | | | | | | | | | | |
KY State Property & Building #89 | | | 5.000 | % | | | 11/01/2027 | | | Aa3/AA-*/AA-@ | | $ | 4,900,000 | | | $ | 5,470,654 | |
KY State Property & Building #80 | | | 5.250 | | | | 05/01/2018 | | | Aa3/A+*/AA-@ | | | 2,940,000 | | | | 3,534,027 | |
KY State Property & Building #80 | | | 5.250 | | | | 05/01/2020 | | | Aa3/A+*/AA-@ | | | 1,000,000 | | | | 1,228,980 | |
KY State Property & Building #81 | | | 5.000 | | | | 11/01/2018 | | | A1/A+*/AA-@ | | | 1,720,000 | | | | 1,811,246 | |
KY State Property & Building #81 | | | 5.000 | | | | 11/01/2019 | | | A1/A+*/AA-@ | | | 2,385,000 | | | | 2,502,986 | |
KY State Property & Building #81 | | | 5.000 | | | | 11/01/2020 | | | A1/A+*/AA-@ | | | 3,560,000 | | | | 3,738,605 | |
KY State Property & Building #81 | | | 5.000 | | | | 11/01/2022 | | | A1/A+*/AA-@ | | | 3,930,000 | | | | 4,109,955 | |
KY State Turnpike Economic Development | | | 5.000 | | | | 07/01/2022 | | | Aa2/AA+*/AA-@ | | | 1,625,000 | | | | 1,793,041 | |
KY State Turnpike Economic Development | | | 5.000 | | | | 07/01/2023 | | | Aa2/AA+*/AA-@ | | | 4,325,000 | | | | 4,766,842 | |
KY State Turnpike Economic Development | | | 5.000 | | | | 07/01/2024 | | | Aa2/AA+*/AA-@ | | | 3,770,000 | | | | 4,139,988 | |
KY State Turnpike Economic Development | | | 5.000 | | | | 07/01/2025 | | | Aa2/AA+*/AA-@ | | | 2,000,000 | | | | 2,184,560 | |
KY State Turnpike Economic Development | | | 5.000 | | | | 07/01/2026 | | | Aa2/AA+*/AA-@ | | | 4,720,000 | | | | 5,279,838 | |
Laurel County KY School District Finance Corporation | | | 4.625 | | | | 08/01/2026 | | | Aa3 | | | 3,150,000 | | | | 3,334,274 | |
Laurel County KY School District Finance Corporation | | | 4.750 | | | | 06/01/2026 | | | Aa3 | | | 1,000,000 | | | | 1,075,230 | |
Louisville & Jefferson County KY Metropolitan Sewer | | | 5.000 | | | | 05/15/2025 | | | Aa3/AA*/AA-@ | | | 3,270,000 | | | | 3,625,155 | |
Louisville & Jefferson County KY Metropolitan Sewer | | | 5.000 | | | | 05/15/2026 | | | Aa3/AA*/AA-@ | | | 3,230,000 | | | | 3,576,999 | |
Louisville & Jefferson County KY Metropolitan Sewer | | | 5.000 | | | | 05/15/2032 | | | Aa3/AA*/AA-@ | | | 4,590,000 | | | | 4,918,277 | |
Louisville & Jefferson County KY Metropolitan Sewer | | | 5.000 | | | | 05/15/2036 | | | Aa3/AA*/AA-@ | | | 2,000,000 | | | | 2,121,980 | |
Louisville & Jefferson County KY Metropolitan Sewer | | | 5.000 | | | | 05/15/2036 | | | Aa3/AA*/AA-@ | | | 1,230,000 | | | | 1,242,804 | |
Louisville & Jefferson County KY Metropolitan Sewer | | | 5.000 | | | | 05/15/2038 | | | Aa3/AA*/AA-@ | | | 12,500,000 | | | | 13,295,750 | |
Louisville & Jefferson County KY Metropolitan Sewer | | | 5.000 | | | | 05/15/2024 | | | Aa3/AA* | | | 7,000,000 | | | | 7,890,260 | |
Louisville & Jefferson County KY Metropolitan Sewer | | | 5.000 | | | | 05/15/2022 | | | Aa3/AA*/AA-@ | | | 2,855,000 | | | | 3,168,650 | |
Louisville & Jefferson County KY Metropolitan Sewer | | | 5.000 | | | | 05/15/2023 | | | Aa3/AA*/AA-@ | | | 2,990,000 | | | | 3,280,060 | |
Louisville & Jefferson County KY Metropolitan Sewer | | | 5.000 | | | | 05/15/2024 | | | Aa3/AA*/AA-@ | | | 3,135,000 | | | | 3,425,206 | |
Louisville & Jefferson County KY Metropolitan Sewer | | | 5.000 | | | | 05/15/2025 | | | Aa3/AA*/AA-@ | | | 3,285,000 | | | | 3,560,118 | |
Louisville & Jefferson County KY Metropolitan Sewer | | | 5.000 | | | | 05/15/2026 | | | Aa3/AA*/AA-@ | | | 14,000,000 | | | | 15,107,260 | |
Louisville & Jefferson County KY Metropolitan Sewer | | | 5.000 | | | | 05/15/2025 | | | Aa3/AA* | | | 5,185,000 | | | | 5,950,410 | |
Louisville & Jefferson County KY Visitors & Convention Center | | | 4.500 | | | | 12/01/2023 | | | Aa3/AA-* | | | 2,340,000 | | | | 2,425,783 | |
Louisville & Jefferson County KY Visitors & Convention Center | | | 4.500 | | | | 12/01/2024 | | | Aa3/AA-* | | | 2,250,000 | | | | 2,326,928 | |
Louisville & Jefferson County KY Visitors & Convention Center | | | 4.600 | | | | 12/01/2025 | | | Aa3/AA-* | | | 1,490,000 | | | | 1,540,868 | |
Louisville & Jefferson County KY Student Housing | | | 5.000 | | | | 06/01/2025 | | | NR | | | 2,030,000 | | | | 2,130,526 | |
Northern KY Water District | | | 4.125 | | | | 02/01/2021 | | | Aa3 | | | 1,380,000 | | | | 1,406,303 | |
Northern KY Water District | | | 4.500 | | | | 02/01/2022 | | | Aa3 | | | 1,385,000 | | | | 1,472,476 | |
Northern KY Water District | | | 6.500 | | | | 02/01/2033 | | | Aa3 | | | 1,585,000 | | | | 1,854,070 | |
Northern KY Water District | | | 6.000 | | | | 02/01/2028 | | | Aa3 | | | 1,010,000 | | | | 1,161,076 | |
Northern KY Water District | | | 6.000 | | | | 02/01/2031 | | | Aa3 | | | 1,000,000 | | | | 1,144,240 | |
Owensboro Water Revenue | | | 5.000 | | | | 09/15/2025 | | | Aa3 | | | 545,000 | | | | 613,888 | |
Pike County KY Mortgage Revenue — Phelps Regional Health | | | 5.350 | | | | 09/20/2012 | | | NR | | | 5,000 | | | | 5,006 | |
Taylor County Detention Facility | | | 4.750 | | | | 09/01/2027 | | | Aa3 | | | 2,110,000 | | | | 2,223,202 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 492,940,947 | |
| PREREFUNDED BONDS | | | | | | | | | | | | | | | | | | |
| 11.34% of Net Assets | | | | | | | | | | | | | | | | | | |
Ballard County KY School District Finance Corporation | | | 5.000 | | | | 06/01/2020 | | | Aa3 | | | 1,240,000 | | | | 1,349,095 | |
Barren County KY School District Finance Corporation | | | 4.750 | | | | 08/01/2022 | | | Aa3 | | | 3,085,000 | | | | 3,363,853 | |
Boone County KY Public Property Corporation — Judicial Facilities | | | 5.125 | | | | 09/01/2022 | | | Aa3 | | | 1,750,000 | | | | 1,782,253 | |
Boone County KY School District Finance Corporation | | | 5.000 | | | | 05/01/2023 | | | Aa3 | | | 4,070,000 | | | | 4,410,252 | |
Boone County KY School District Finance Corporation | | | 5.000 | | | | 05/01/2024 | | | Aa3 | | | 4,265,000 | | | | 4,621,554 | |
Bullitt County KY School District Finance Corporation | | | 4.750 | | | | 07/01/2022 | | | Aa3 | | | 2,440,000 | | | | 2,645,131 | |
Daviess County KY School District Finance Corporation | | | 5.000 | | | | 06/01/2021 | | | Aa3 | | | 1,155,000 | | | | 1,255,231 | |
Fayette County KY School District Finance Corporation | | | 4.500 | | | | 03/01/2022 | | | Aa2/AA* | | | 4,100,000 | | | | 4,216,932 | |
Fayette County KY School District Finance Corporation | | | 5.000 | | | | 04/01/2024 | | | Aa2/AA* | | | 6,985,000 | | | | 7,848,136 | |
Fayette County KY School District Finance Corporation | | | 5.000 | | | | 04/01/2025 | | | Aa2/AA* | | | 7,340,000 | | | | 8,247,004 | |
Kenton County KY School District Finance Corporation | | | 5.000 | | | | 06/01/2021 | | | Aa3 | | | 4,055,000 | | | | 4,410,948 | |
Kenton County KY School District Finance Corporation | | | 5.000 | | | | 06/01/2023 | | | Aa3 | | | 4,465,000 | | | | 4,856,938 | |
Kenton County KY School District Finance Corporation | | | 5.000 | | | | 06/01/2024 | | | Aa3 | | | 4,665,000 | | | | 5,074,494 | |
KY State Property & Building #73 | | | 5.000 | | | | 11/01/2021 | | | Aa2/AA-*/AA-@ | | | 1,000,000 | | | | 1,016,250 | |
KY State Property & Building #73 | | | 5.000 | | | | 11/01/2019 | | | Aa2/AA-*/AA-@ | | | 1,360,000 | | | | 1,382,100 | |
KY State Property & Building #73 | | | 5.000 | | | | 11/01/2020 | | | Aa2/AA-*/AA-@ | | | 3,255,000 | | | | 3,307,894 | |
The accompanying footnotes are an integral part of the financial statements.
7
DUPREE MUTUAL FUNDS — KENTUCKY TAX-FREE INCOME SERIES
SCHEDULE OF PORTFOLIO INVESTMENTS
Kentucky Municipal Bonds — 100% of Net Assets
June 30, 2012
| | | | | | | | | | | | | | | | | | |
| Bond Description | | Coupon | | | Maturity
Date | | | Rating# | | Par Value | | | Fair Value | |
| | | | | | | | | | | | | | | | | | |
KY State Property & Building #85 | | | 5.000 | % | | | 08/01/2020 | | | Aa2/AA-* | | $ | 5,760,000 | | | $ | 6,534,432 | |
KY State Property & Building #85 | | | 5.000 | | | | 08/01/2022 | | | Aa2/AA-* | | | 8,200,000 | | | | 9,302,490 | |
KY State Property & Building #85 | | | 5.000 | | | | 08/01/2024 | | | Aa2/AA-* | | | 8,300,000 | | | | 9,415,935 | |
KY State Property & Building #85 | | | 5.000 | | | | 08/01/2025 | | | Aa2/AA-* | | | 2,500,000 | | | | 2,836,125 | |
Knox County General Obligation | | | 5.625 | | | | 06/01/2036 | | | NR | | | 2,490,000 | | | | 2,907,623 | |
Letcher County KY School District Finance Corporation | | | 5.000 | | | | 06/01/2022 | | | Aa3 | | | 1,755,000 | | | | 1,909,772 | |
Letcher County KY School District Finance Corporation | | | 5.000 | | | | 06/01/2024 | | | Aa3 | | | 1,930,000 | | | | 2,100,207 | |
Louisville & Jefferson Metropolitan Health — St Mary’s | | | 6.125 | | | | 02/01/2037 | | | Aaa/A-* | | | 1,300,000 | | | | 1,661,244 | |
Louisville KY General Obligation — Series A | | | 5.000 | | | | 10/01/2020 | | | Aa1/AA+* | | | 4,165,000 | | | | 4,213,272 | |
Marshall County KY School District Finance Corporation | | | 5.000 | | | | 06/01/2022 | | | Aa3 | | | 1,400,000 | | | | 1,520,918 | |
Montgomery County KY School District Finance Corporation | | | 4.375 | | | | 04/01/2023 | | | Aa3 | | | 3,105,000 | | | | 3,200,417 | |
Nelson County KY School District Finance Corporation | | | 4.500 | | | | 04/01/2021 | | | Aa3 | | | 1,130,000 | | | | 1,166,036 | |
Nelson County KY School District Finance Corporation | | | 4.500 | | | | 04/01/2023 | | | Aa3 | | | 2,505,000 | | | | 2,583,732 | |
Shelby County KY School District Finance Corporation | | | 5.000 | | | | 05/01/2022 | | | Aa3 | | | 1,815,000 | | | | 1,971,308 | |
Spencer County KY School District Finance Corporation | | | 5.000 | | | | 07/01/2023 | | | Aa3 | | | 1,000,000 | | | | 1,090,110 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 112,201,686 | |
| LEASE REVENUE BONDS | | | | | | | | | | | | | | | | | | |
| 10.67% of Net Assets | | | | | | | | | | | | | | | | | | |
Bracken County Public Property | | | 5.000 | | | | 08/01/2029 | | | Aa3 | | | 840,000 | | | | 960,532 | |
Danville KY Multi-City Lease Campbellsville Water & Sewer | | | 3.500 | | | | 07/01/2012 | | | A1 | | | 415,000 | | | | 415,029 | |
Fayette County School District Finance Corporation | | | 5.000 | | | | 06/01/2031 | | | Aa2/AA* | | | 3,705,000 | | | | 4,246,819 | |
Franklin County Public Properties Justice Center | | | 5.000 | | | | 04/01/2029 | | | Aa3 | | | 2,630,000 | | | | 2,927,243 | |
Hardin County School District Finance Corporation | | | 5.000 | | | | 05/01/2030 | | | Aa3 | | | 450,000 | | | | 500,189 | |
Hardin County School District Finance Corporation | | | 5.000 | | | | 05/01/2031 | | | Aa3 | | | 470,000 | | | | 518,293 | |
Kenton County School District Finance Corporation | | | 5.000 | | | | 02/01/2029 | | | Aa3 | | | 3,270,000 | | | | 3,596,673 | |
KY Area Development Districts Financing Lease — Ewing | | | 4.700 | | | | 06/01/2024 | | | NR | | | 2,625,000 | | | | 2,730,026 | |
KY Asset Liability Project | | | 5.000 | | | | 09/01/2021 | | | Aa2/AA*/AA-@ | | | 1,570,000 | | | | 1,898,413 | |
Kentucky Asset Liability Highway Trust | | | 5.000 | | | | 09/01/2022 | | | Aa2/AA*/AA-@ | | | 3,500,000 | | | | 4,191,600 | |
KY Association of Counties | | | 5.000 | | | | 02/01/2030 | | | A+* | | | 625,000 | | | | 686,369 | |
KY Association of Counties | | | 5.000 | | | | 02/01/2032 | | | A+* | | | 1,000,000 | | | | 1,083,580 | |
KY Association of Counties | | | 5.000 | | | | 02/01/2035 | | | A+* | | | 995,000 | | | | 1,066,700 | |
KY Infrastructure Authority Wastewater & Drinking Water | | | 5.000 | | | | 02/01/2027 | | | Aaa/AAA*/AAA@ | | | 2,500,000 | | | | 2,923,875 | |
KY Infrastructure Authority Wastewater & Drinking Water | | | 5.000 | | | | 02/01/2028 | | | Aaa/AAA*/AAA@ | | | 2,000,000 | | | | 2,327,100 | |
KY State Property & Building #100 | | | 5.000 | | | | 08/01/2027 | | | Aa3/A+*/AA-@ | | | 1,110,000 | | | | 1,278,753 | |
KY State Property & Building #100 | | | 5.000 | | | | 08/01/2028 | | | Aa3/A+*/AA-@ | | | 4,000,000 | | | | 4,570,600 | |
KY State Property & Building #100 | | | 5.000 | | | | 08/01/2029 | | | Aa3/A+*/AA-@ | | | 2,500,000 | | | | 2,841,825 | |
KY State Property & Building #100 | | | 5.000 | | | | 08/01/2030 | | | Aa3/A+*/AA-@ | | | 7,980,000 | | | | 9,017,480 | |
KY State Property & Building #100 | | | 5.000 | | | | 08/01/2031 | | | Aa3/A+*/AA-@ | | | 5,100,000 | | | | 5,733,215 | |
KY State Property & Building #88 | | | 5.000 | | | | 11/01/2024 | | | Aa3/A+*/AA-@ | | | 1,355,000 | | | | 1,509,645 | |
KY State Property & Building #90 | | | 5.375 | | | | 11/01/2023 | | | Aa3/A+*/AA-@ | | | 1,200,000 | | | | 1,394,160 | |
KY State Property & Building #90 | | | 5.500 | | | | 11/01/2028 | | | Aa3/A+*/AA-@ | | | 24,805,000 | | | | 28,297,792 | |
KY State Property & Building #96 | | | 5.000 | | | | 11/01/2029 | | | Aa3/A+*/AA-@ | | | 5,000,000 | | | | 5,601,650 | |
KY State Property & Building #98 | | | 5.000 | | | | 08/01/2021 | | | Aa3/A+*/AA-@ | | | 2,505,000 | | | | 2,993,400 | |
KY State Property & Building #91 | | | 5.750 | | | | 04/01/2029 | | | A1/A+*/A+@ | | | 210,000 | | | | 237,699 | |
Lexington-Fayette Urban County Government Public Facilities | | | 5.000 | | | | 06/01/2033 | | | Aa3/A+*/AA-@ | | | 5,000,000 | | | | 5,466,100 | |
Pendleton County KY Multi-County Lease Revenue | | | 6.400 | | | | 03/01/2019 | | | B* | | | 3,000,000 | | | | 3,432,870 | |
Shelby County KY School District Finance Corporation | | | 5.000 | | | | 02/01/2028 | | | Aa3 | | | 500,000 | | | | 556,520 | |
Warren County Downtown Economic Development Authority | | | 5.000 | | | | 06/01/2038 | | | AA-* | | | 2,345,000 | | | | 2,627,174 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 105,631,324 | |
| TURNPIKES AND TOLL ROAD BONDS | | | | | | | | | | | | | | | | | | |
| 7.74% of Net Assets | | | | | | | | | | | | | | | | | | |
KY State Turnpike Economic Development | | | 5.000 | | | | 07/01/2020 | | | Aa2/AA+*/AA-@ | | | 1,000,000 | | | | 1,182,000 | |
KY State Turnpike Economic Development | | | 5.000 | | | | 07/01/2025 | | | Aa2/AA+*/AA-@ | | | 3,225,000 | | | | 3,668,146 | |
KY State Turnpike Economic Development | | | 5.000 | | | | 07/01/2027 | | | Aa2/AA+*/AA-@ | | | 9,530,000 | | | | 10,799,681 | |
KY State Turnpike Economic Development | | | 5.000 | | | | 07/01/2028 | | | Aa2/AA+*/AA-@ | | | 2,460,000 | | | | 2,742,851 | |
KY State Turnpike Economic Development | | | 5.000 | | | | 07/01/2026 | | | Aa2/AA+*/AA-@ | | | 4,440,000 | | | | 5,084,777 | |
KY State Turnpike Economic Development | | | 5.000 | | | | 07/01/2027 | | | Aa2/AA+*/AA-@ | | | 3,080,000 | | | | 3,520,933 | |
KY State Turnpike Economic Development | | | 5.000 | | | | 07/01/2029 | | | Aa2/AA+*/AA-@ | | | 10,035,000 | | | | 11,369,053 | |
The accompanying footnotes are an integral part of the financial statements.
8
DUPREE MUTUAL FUNDS — KENTUCKY TAX-FREE INCOME SERIES
SCHEDULE OF PORTFOLIO INVESTMENTS
Kentucky Municipal Bonds — 100% of Net Assets
June 30, 2012
| | | | | | | | | | | | | | | | | | |
| Bond Description | | Coupon | | | Maturity
Date | | | Rating# | | Par Value | | | Fair Value | |
| | | | | | | | | | | | | | | | | | |
KY State Turnpike Economic Development | | | 5.000 | % | | | 07/01/2025 | | | Aa2/AA+*/AA-@ | | $ | 3,775,000 | | | $ | 4,491,533 | |
KY State Turnpike Economic Development | | | 5.000 | | | | 07/01/2029 | | | Aa2/AA+*/AA-@ | | | 5,165,000 | | | | 5,997,030 | |
KY State Turnpike Economic Development | | | 5.000 | | | | 07/01/2030 | | | Aa2/AA+*/AA-@ | | | 1,845,000 | | | | 2,129,573 | |
KY State Turnpike Economic Development | | | 5.000 | | | | 07/01/2030 | | | Aa2/AA+*/AA-@ | | | 1,465,000 | | | | 1,708,366 | |
KY State Turnpike Economic Development | | | 5.000 | | | | 07/01/2031 | | | Aa2/AA+*/AA-@ | | | 9,350,000 | | | | 10,859,371 | |
KY State Turnpike Economic Development | | | 5.000 | | | | 07/01/2029 | | | Aa2/AA+*/AA-@ | | | 2,500,000 | | | | 2,931,750 | |
KY State Turnpike Economic Development | | | 5.000 | | | | 07/01/2032 | | | Aa2/AA+*/AA-@ | | | 8,755,000 | | | | 10,127,609 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 76,612,673 | |
| MUNICIPAL UTILITY REVENUE BONDS | | | | | | | | | | | | | | | | | | |
| 5.93% of Net Assets | | | | | | | | | | | | | | | | | | |
KY Rural Water Financial Corporation | | | 5.375 | | | | 02/01/2020 | | | A+* | | | 1,045,000 | | | | 1,057,080 | |
KY Rural Water Finance Corporation | | | 5.125 | | | | 02/01/2035 | | | A+* | | | 525,000 | | | | 575,180 | |
Louisville & Jefferson County KY Metropolitan Sewer | | | 5.000 | | | | 05/15/2021 | | | Aa3/AA* | | | 2,865,000 | | | | 3,440,893 | |
Louisville & Jefferson County KY Metropolitan Sewer | | | 5.000 | | | | 05/15/2023 | | | Aa3/AA* | | | 2,500,000 | | | | 2,937,025 | |
Louisville & Jefferson County KY Metropolitan Sewer | | | 5.000 | | | | 05/15/2034 | | | Aa3/AA*/AA-@ | | | 23,380,000 | | | | 26,301,331 | |
Louisville & Jefferson County KY Waterworks | | | 5.000 | | | | 11/15/2027 | | | Aaa/AAA* | | | 2,000,000 | | | | 2,250,240 | |
Louisville & Jefferson County KY Waterworks | | | 5.000 | | | | 11/15/2031 | | | Aaa/AAA* | | | 10,695,000 | | | | 12,004,496 | |
Northern KY Water District | | | 5.000 | | | | 02/01/2033 | | | Aa3 | | | 3,580,000 | | | | 4,009,099 | |
Northern KY Water District | | | 5.000 | | | | 02/01/2026 | | | Aa3 | | | 1,000,000 | | | | 1,163,750 | |
Northern KY Water District | | | 5.000 | | | | 02/01/2027 | | | Aa3 | | | 4,315,000 | | | | 4,974,979 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 58,714,073 | |
| HOSPITAL AND HEALTHCARE REVENUE BONDS | | | | | | | | | | | | | | | | | | |
| 3.63% of Net Assets | | | | | | | | | | | | | | | | | | |
KY Development Finance Authority — Kings Daughters | | | 5.000 | | | | 02/01/2030 | | | A1/A+*/A+@ | | | 4,000,000 | | | | 4,208,600 | |
KY Development Finance Authority — Baptist Heathcare | | | 5.375 | | | | 08/15/2024 | | | A1/AA-@ | | | 1,205,000 | | | | 1,366,940 | |
KY Development Finance Authority — Baptist Healthcare | | | 5.625 | | | | 08/15/2027 | | | A1/AA-@ | | | 4,855,000 | | | | 5,459,205 | |
KY Development Finance Authority — Catholic Health | | | 5.000 | | | | 05/01/2029 | | | Aa2/AA*/AA@ | | | 2,500,000 | | | | 2,605,124 | |
KY Development Finance Authority — Catholic Health | | | 5.000 | | | | 05/01/2029 | | | Aa2/AA*/AA@ | | | 2,410,000 | | | | 2,637,263 | |
Louisville & Jefferson County Catholic Health Initiatives | | | 5.000 | | | | 12/01/2030 | | | Aa2/AA*/AA@ | | | 1,000,000 | | | | 1,116,800 | |
Louisville & Jefferson County Catholic Health Initiatives | | | 5.000 | | | | 12/01/2031 | | | Aa2/AA*/AA@ | | | 2,750,000 | | | | 3,056,625 | |
KY Development Finance Authority — St. Elizabeth | | | 5.125 | | | | 05/01/2029 | | | AA-*/AA-@ | | | 2,750,000 | | | | 2,989,910 | |
KY Development Finance Authority — St. Elizabeth | | | 5.375 | | | | 05/01/2034 | | | AA-*/AA-@ | | | 2,560,000 | | | | 2,791,040 | |
KY Development Finance Authority — Catholic Health | | | 5.125 | | | | 10/01/2021 | | | A1/AA-*/AA-@ | | | 1,000,000 | | | | 1,011,010 | |
Louisville & Jefferson Metropolitan Government Health | | | 5.000 | | | | 10/01/2026 | | | A-*/A-@ | | | 575,000 | | | | 590,910 | |
Louisville & Jefferson County Metropolitan Health — Norton | | | 5.000 | | | | 10/01/2030 | | | A-*/A-@ | | | 2,000,000 | | | | 2,078,220 | |
Louisville & Jefferson County Metropolitan Health — Norton | | | 5.250 | | | | 10/01/2036 | | | A-*/A-@ | | | 3,460,000 | | | | 3,570,028 | |
Pike County KY Mortgage Revenue — Phelps Regional Health | | | 5.650 | | | | 09/20/2027 | | | NR | | | 2,435,000 | | | | 2,436,851 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 35,918,526 | |
| ESCROWED TO MATURITY BONDS | | | | | | | | | | | | | | | | | | |
| 3.62% of Net Assets | | | | | | | | | | | | | | | | | | |
Jefferson County KY Health Facilities — Alliant Health | | | 5.125 | | | | 10/01/2017 | | | BBB* | | | 3,980,000 | | | | 4,267,038 | |
Jefferson County KY Health Facilities — Alliant Health | | | 5.125 | | | | 10/01/2018 | | | BBB* | | | 29,605,000 | | | | 31,543,239 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 35,810,277 | |
| STATE AND LOCAL MORTGAGE REVENUE BONDS | | | | | | | | | | | | | | | | | | |
| 3.49% of Net Assets | | | | | | | | | | | | | | | | | | |
KY Housing Corporation | | | 4.850 | | | | 01/01/2024 | | | Aaa/AAA* | | | 7,380,000 | | | | 7,495,792 | |
KY Housing Corporation | | | 4.950 | | | | 01/01/2033 | | | Aaa/AAA* | | | 3,470,000 | | | | 3,502,514 | |
KY Housing Corporation | | | 4.750 | | | | 07/01/2032 | | | Aaa/AAA* | | | 1,265,000 | | | | 1,304,797 | |
KY Housing Corporation | | | 4.875 | | | | 07/01/2023 | | | Aaa/AAA* | | | 1,535,000 | | | | 1,613,147 | |
KY Housing Corporation | | | 4.750 | | | | 07/01/2035 | | | Aaa/AAA* | | | 4,140,000 | | | | 4,287,964 | |
KY Housing Corporation | | | 5.375 | | | | 07/01/2033 | | | Aaa/AAA* | | | 4,175,000 | | | | 4,485,996 | |
KY Housing Corporation | | | 5.450 | | | | 07/01/2038 | | | Aaa/AAA* | | | 3,060,000 | | | | 3,201,862 | |
KY Housing Corporation | | | 4.900 | | | | 07/01/2028 | | | Aaa/AAA* | | | 2,000,000 | | | | 2,090,140 | |
KY Housing Corporation | | | 4.850 | | | | 07/01/2029 | | | Aaa/AAA* | | | 3,200,000 | | | | 3,384,480 | |
KY Housing Corporation | | | 5.150 | | | | 07/01/2039 | | | Aaa/AAA* | | | 2,480,000 | | | | 2,608,562 | |
KY Housing Corporation | | | 4.625 | | | | 07/01/2033 | | | Aaa/AAA* | | | 510,000 | | | | 526,478 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 34,501,732 | |
The accompanying footnotes are an integral part of the financial statements.
9
DUPREE MUTUAL FUNDS — KENTUCKY TAX-FREE INCOME SERIES
SCHEDULE OF PORTFOLIO INVESTMENTS
Kentucky Municipal Bonds — 100% of Net Assets
June 30, 2012
| | | | | | | | | | | | | | | | | | |
| Bond Description | | Coupon | | | Maturity
Date | | | Rating# | | Par Value | | | Fair Value | |
| | | | | | | | | | | | | | | | | | |
| UNIVERSITY CONSOLIDATED EDUCATION AND BUILDING REVENUE BONDS | | | | | | | | |
| 1.62% of Net Assets | | | | | | | | | | | | | | | | | | |
Berea KY Educational Facilities Revenue | | | 4.125 | % | | | 06/01/2022 | | | Aaa | | $ | 2,190,000 | | | $ | 2,227,427 | |
KY Housing Corporation | | | 5.000 | | | | 07/01/2033 | | | Aaa/AAA* | | | 2,405,000 | | | | 2,492,109 | |
Louisville & Jefferson County — Papa Johns Stadium | | | 4.750 | | | | 03/01/2028 | | | Aa2/AA-* | | | 3,250,000 | | | | 3,544,483 | |
University of Louisville General Receipts | | | 5.000 | | | | 09/01/2029 | | | Aa2/AA-* | | | 2,280,000 | | | | 2,633,286 | |
University of Louisville General Receipts | | | 5.000 | | | | 09/01/2030 | | | Aa2/AA-* | | | 440,000 | | | | 505,520 | |
University of Louisville General Receipts | | | 5.000 | | | | 09/01/2031 | | | Aa2/AA-* | | | 2,580,000 | | | | 2,937,691 | |
Western KY University | | | 5.000 | | | | 05/01/2032 | | | Aa3/A+* | | | 1,500,000 | | | | 1,722,180 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 16,062,696 | |
| PUBLIC FACILITIES REVENUE BONDS | | | | | | | | | | | | | | | | | | |
| .74% of Net Assets | | | | | | | | | | | | | | | | | | |
Louisville & Jefferson County KY Parking Authority | | | 5.000 | | | | 12/01/2022 | | | Aa2/AA* | | | 625,000 | | | | 746,113 | |
Louisville & Jefferson County KY Parking Authority | | | 5.750 | | | | 12/01/2034 | | | Aa2/AA* | | | 2,750,000 | | | | 3,275,992 | |
Wolfe County Public Property | | | 5.000 | | | | 04/01/2030 | | | Aa3 | | | 2,855,000 | | | | 3,281,423 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 7,303,528 | |
| GENERAL OBLIGATION BONDS | | | | | | | | | | | | | | | | | | |
| .12% of Net Assets | | | | | | | | | | | | | | | | | | |
KY Bond Corporation Finance Program | | | 5.500 | | | | 02/01/2031 | | | A+* | | | 1,115,000 | | | | 1,231,250 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 1,231,250 | |
| | | | | | | | | | | | | | | | | | |
Total Investments (cost $907,636,311)(See (a) below for further explanation) 98.72% of Net Assets | | | | | | | | | $ | 976,928,712 | |
| | | | | | | | | | | | | | | | | | |
| | * | | Standard and Poor’s Corporation |
| | @ | | Fitch’s Investors Service |
| | | | All other ratings by Moody’s Investors Service, Inc. |
| | # | | Bond ratings are unaudited and not covered by Report of Independent Registered Public Accounting Firm. |
| (a) | | Represents cost for financial reporting and federal income tax purposes and differs from fair value by net unrealized appreciation of securities as follows: |
| | | | | | |
| | | | | | |
| | Unrealized appreciation | | $ | 69,875,628 | |
| | Unrealized depreciation | | | (583,227 | ) |
| | | | | | |
| | Net unrealized appreciation | | $ | 69,292,401 | |
| | | | | | |
Other Information
The following is a summary of the inputs used, as of June 30, 2012, involving the Fund’s investments in securities carried at fair value. The inputs or methodology used for valuing securities may not be an indication of the risk associated with investing in those securities. For more information on valuation inputs, and their aggregation into the levels used in the table below, please refer to the Security Valuation section in the accompanying Notes to Financial Statements.
| | | | | | |
| | | Valuation Inputs | | Municipal Bonds | |
| | | | | | |
Level 1 | | Quoted Prices | | $ | — | |
Level 2 | | Other Significant Observable Inputs | | | 976,928,712 | |
Level 3 | | Significant Unobservable Inputs | | | — | |
| | | | | | |
| | | | $ | 976,928,712 | |
| | | | | | |
The accompanying footnotes are an integral part of the financial statements.
10
KENTUCKY TAX-FREE INCOME SERIES
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2012
| | | | | | | | |
ASSETS: | | | | | | | | |
Investments in securities, at fair value (Cost: $907,636,311) | | | | | | $ | 976,928,712 | |
Cash | | | | | | | 3,578,886 | |
Receivable for fund shares sold | | | | | | | 315,755 | |
Interest receivable | | | | | | | 12,777,186 | |
| | | | | | | | |
Total assets | | | | | | | 993,600,539 | |
LIABILITIES: | | | | | | | | |
Payable for: | | | | | | | | |
Distributions to shareholders | | | 3,484,260 | | | | | |
Fund shares redeemed | | | 90,222 | | | | | |
Investment advisory fee | | | 303,503 | | | | | |
Transfer agent fee | | | 99,384 | | | | | |
Trustees fees | | | 36,155 | | | | | |
Accrued expenses | | | 183,047 | | | | | |
| | | | | | | | |
Total liabilities | | | | | | | 4,196,571 | |
| | | | | | | | |
NET ASSETS: | | | | | | | | |
Capital | | | | | | | 919,985,045 | |
Accumulated net investment income | | | | | | | 47,479 | |
Net accumulated realized gain on investment transactions | | | | | | | 79,043 | |
Net unrealized appreciation in value of investments | | | | | | | 69,292,401 | |
| | | | | | | | |
Net assets at value | | | | | | $ | 989,403,968 | |
| | | | | | | | |
NET ASSET VALUE, offering price and redemption price per share ($989,403,968 -:-123,779,261 shares outstanding; unlimited number of shares authorized; no par value) | | | | | | $ | 7.99 | |
| | | | | | | | |
STATEMENT OF OPERATIONS
For the year ended June 30, 2012
| | | | |
Net investment income: | | | | |
Interest income | | $ | 39,576,092 | |
| | | | |
Expenses: | | | | |
Investment advisory fee | | | 3,595,920 | |
Transfer agent fee | | | 1,168,064 | |
Custodian expense | | | 112,719 | |
Professional fees | | | 229,189 | |
Trustees fees | | | 131,585 | |
Other expenses | | | 189,554 | |
| | | | |
Total expenses | | | 5,427,031 | |
Custodian expense reduction | | | (3,626 | ) |
| | | | |
Net expenses | | | 5,423,405 | |
| | | | |
Net investment income | | | 34,152,687 | |
| | | | |
Realized and unrealized gain/(loss) on investments: | | | | |
Net realized gain | | | 714,806 | |
Net change in unrealized appreciation/depreciation | | | 45,703,274 | |
| | | | |
Net realized and unrealized loss on investments | | | 46,418,080 | |
| | | | |
Net increase in net assets resulting from operations | | $ | 80,570,767 | |
| | | | |
The accompanying notes are an integral part of the financial statements.
11
KENTUCKY TAX-FREE INCOME SERIES
STATEMENTS OF CHANGES IN NET ASSETS
For the years ended June 30, 2012 and 2011
| | | | | | | | |
| | | 2012 | | | 2011 | |
Operations: | | | | | | | | |
Net investment income | | $ | 34,152,687 | | | $ | 33,202,621 | |
Net realized gain on investments | | | 714,806 | | | | 4,995,471 | |
Net change in unrealized appreciation/depreciation | | | 45,703,274 | | | | (6,910,375 | ) |
| | | | | | | | |
Net increase in net assets resulting from operations | | | 80,570,767 | | | | 31,287,717 | |
Distributions from net investment income | | | (34,105,208 | ) | | | (33,202,621 | ) |
Distributions from capital gains | | | (3,744,261 | ) | | | (2,195,987 | ) |
Net fund share transactions (Note 4) | | | 50,057,645 | | | | 17,839,034 | |
| | | | | | | | |
Total increase | | | 92,778,943 | | | | 13,728,143 | |
Net assets: | | | | | | | | |
Beginning of year | | | 896,625,025 | | | | 882,896,882 | |
| | | | | | | | |
End of year | | $ | 989,403,968 | | | $ | 896,625,025 | |
| | | | | | | | |
Accumulated net investment income | | $ | 47,479 | | | $ | — | |
| | | | | | | | |
FINANCIAL HIGHLIGHTS
| | | | | | | | | | | | | | | | | | | | |
| Selected data for a share outstanding: | | For the years ended June 30, | |
| | | 2012 | | | 2011 | | | 2010 | | | 2009 | | | 2008 | |
Net asset value, beginning of year | | | $7.63 | | | | $7.67 | | | | $7.49 | | | | $7.39 | | | | $7.43 | |
| | | | | | | | | | | | | | | | | | | | |
Income from investment operations: | | | | | | | | | | | | | | | | | | | | |
Net investment income | | | 0.28 | | | | 0.29 | | | | 0.29 | | | | 0.29 | | | | 0.29 | |
Net gains/(losses) on securities, both realized and unrealized | | | 0.39 | | | | (0.02 | ) | | | 0.20 | | | | 0.11 | | | | (0.04 | ) |
| | | | | | | | | | | | | | | | | | | | |
Total from investment operations | | | 0.67 | | | | 0.27 | | | | 0.49 | | | | 0.40 | | | | 0.25 | |
Less distributions: | | | | | | | | | | | | | | | | | | | | |
Distributions from net investment income | | | (0.28 | ) | | | (0.29 | ) | | | (0.29 | ) | | | (0.29 | ) | | | (0.29 | ) |
Distributions from capital gains | | | (0.03 | ) | | | (0.02 | ) | | | (0.02 | ) | | | (0.01 | )(b) | | | — | |
| | | | | | | | | | | | | | | | | | | | |
Total distributions | | | (0.31 | ) | | | (0.31 | ) | | | (0.31 | ) | | | (0.30 | ) | | | (0.29 | ) |
| | | | | | | | | | | | | | | | | | | | |
Net asset value, end of year | | | $7.99 | | | | $7.63 | | | | $7.67 | | | | $7.49 | | | | $7.39 | |
| | | | | | | | | | | | | | | | | | | | |
Total return | | | 8.97% | | | | 3.57% | | | | 6.58% | | | | 5.65% | | | | 3.47% | |
Net assets, end of year (in thousands) | | | $989,404 | | | | $896,625 | | | | $882,897 | | | | $788,923 | | | | $734,613 | |
Ratio of net expenses to average net assets (a) | | | 0.57% | | | | 0.58% | | | | 0.58% | | | | 0.58% | | | | 0.58% | |
Ratio of net investment income to average net assets | | | 3.60% | | | | 3.78% | | | | 3.81% | | | | 3.99% | | | | 3.94% | |
Portfolio turnover | | | 8.39% | | | | 11.42% | | | | 4.76% | | | | 6.09% | | | | 5.69% | |
| (a) | | Percentages are after custodian reduction for which no recovery will be sought. Percentages before custodian reduction were: .57% for 2012; .58% for 2011; .58% for 2010; .58% for 2009; and .58% for 2008. |
| (b) | | Rounds to less than $0.01. |
The accompanying notes are an integral part of the financial statements.
12
DUPREE MUTUAL FUNDS — KENTUCKY TAX-FREE SHORT-TO-MEDIUM SERIES
SCHEDULE OF PORTFOLIO INVESTMENTS
Kentucky Municipal Bonds — 100% of Net Assets
June 30, 2012
| | | | | | | | | | | | | | | | | | |
| Bond Description | | Coupon | | | Maturity
Date | | | Rating# | | Par Value | | | Fair Value | |
| | | | | | | | | | | | | | | | | | |
| INSURED MUNICIPAL BONDS | | | | | | | | | | | | | | | | | | |
| 73.86% of Net Assets | | | | | | | | | | | | | | | | | | |
Boone County School District Finance Corporation | | | 4.000 | % | | | 08/01/2018 | | | Aa3 | | $ | 145,000 | | | $ | 156,997 | |
Bourbon County Public Project | | | 3.800 | | | | 02/01/2019 | | | Aa3 | | | 260,000 | | | | 284,123 | |
Bowling Green General Obligation — Series A | | | 4.000 | | | | 06/01/2016 | | | Aa2 | | | 375,000 | | | | 397,395 | |
Boyle County Centre College | | | 5.000 | | | | 06/01/2018 | | | Aa3/AA-* | | | 200,000 | | | | 232,576 | |
Boyle County Centre College | | | 5.000 | | | | 06/01/2020 | | | Aa3/AA-* | | | 150,000 | | | | 170,013 | |
Breathitt County School District Finance Corporation | | | 3.875 | | | | 07/01/2017 | | | Aa3 | | | 280,000 | | | | 302,736 | |
Bullitt County KY School District Finance Corporation | | | 4.000 | | | | 10/01/2014 | | | Aa3 | | | 150,000 | | | | 160,952 | |
Campbell County School District Finance Corporation | | | 4.375 | | | | 08/01/2019 | | | Aa3 | | | 875,000 | | | | 960,155 | |
Christian County School District Finance Corporation | | | 4.000 | | | | 08/01/2019 | | | Aa3 | | | 720,000 | | | | 768,269 | |
Clay County School District Finance Corporation | | | 3.750 | | | | 06/01/2017 | | | Aa3 | | | 210,000 | | | | 223,892 | |
Corbin KY Independent School District | | | 4.000 | | | | 02/01/2018 | | | Aa3 | | | 300,000 | | | | 333,558 | |
Fayette County KY School District Finance Corporation | | | 4.000 | | | | 06/01/2019 | | | Aa2/AA* | | | 140,000 | | | | 150,611 | |
Hardin County School District Finance Corporation | | | 4.000 | | | | 02/01/2019 | | | Aa3 | | | 1,475,000 | | | | 1,552,098 | |
Jefferson County School District Finance Corporation | | | 5.250 | | | | 01/01/2017 | | | Aa2/AA-* | | | 200,000 | | | | 236,096 | |
Jefferson County School District School Building Revenue | | | 4.250 | | | | 07/01/2017 | | | Aa2/AA-* | | | 175,000 | | | | 196,616 | |
Jessamine County KY School District | | | 4.100 | | | | 01/01/2018 | | | Aa3 | | | 100,000 | | | | 106,497 | |
KY Asset Liability Commission | | | 5.000 | | | | 05/01/2016 | | | Aa3/A+*/AA-@ | | | 1,000,000 | | | | 1,110,170 | |
KY Asset Liability Project Notes | | | 5.000 | | | | 09/01/2016 | | | Aa2/AA*/AA-@ | | | 2,000,000 | | | | 2,219,380 | |
KY Asset Liability Project Notes | | | 5.000 | | | | 09/01/2015 | | | Aa2/AA*/AA-@ | | | 275,000 | | | | 310,731 | |
KY Asset Liability Project Notes | | | 4.500 | | | | 09/01/2016 | | | Aa2/AA*/AA-@ | | | 175,000 | | | | 200,970 | |
KY Asset Liability Project Notes | | | 5.000 | | | | 09/01/2017 | | | Aa2/AA*/AA-@ | | | 1,500,000 | | | | 1,785,000 | |
KY Asset Liability Projects — Federal Highway | | | 4.200 | | | | 09/01/2018 | | | Aa2/AA*/AA-@ | | | 1,500,000 | | | | 1,692,825 | |
KY Asset Liability | | | 4.300 | | | | 09/01/2019 | | | Aa2/AA*/AA-@ | | | 1,400,000 | | | | 1,575,770 | |
KY Asset Liability Commission University of Kentucky Project | | | 5.000 | | | | 10/01/2019 | | | Aa2/AA-* | | | 320,000 | | | | 375,507 | |
KY Asset Liability — University of Kentucky | | | 4.000 | | | | 10/01/2019 | | | Aa2/AA-* | | | 100,000 | | | | 110,484 | |
KY Asset Liability University of Kentucky Project Notes | | | 5.000 | | | | 10/01/2016 | | | Aa2/AA-* | | | 1,250,000 | | | | 1,418,363 | |
KY Asset Liability Project Notes | | | 4.400 | | | | 10/01/2019 | | | Aa2/AA-* | | | 1,750,000 | | | | 1,922,935 | |
KY Asset Liability University of Kentucky Project Notes | | | 4.450 | | | | 10/01/2020 | | | Aa2/AA-* | | | 500,000 | | | | 547,520 | |
KY Economic Development Finance Authority — Norton Health | | | 6.000 | | | | 10/01/2018 | | | Baa2/BBB* | | | 560,000 | | | | 589,120 | |
KY Rural Water Finance Corporation | | | 3.625 | | | | 02/01/2016 | | | Baa2/A+* | | | 350,000 | | | | 359,279 | |
KY Rural Water Finance Corporation | | | 4.000 | | | | 02/01/2014 | | | Baa2/A+* | | | 300,000 | | | | 308,574 | |
KY Rural Water Finance Corporation | | | 4.500 | | | | 08/01/2021 | | | Baa2/A+* | | | 100,000 | | | | 108,255 | |
KY State Property & Building #84 | | | 5.000 | | | | 08/01/2019 | | | Aa3/A+*/AA-@ | | | 1,000,000 | | | | 1,211,310 | |
KY State Property & Building #93 | | | 5.250 | | | | 02/01/2021 | | | Aa3/AA-*/AA-@ | | | 200,000 | | | | 237,626 | |
KY State Property & Building #87 | | | 5.000 | | | | 03/01/2017 | | | Aa3/A+*/AA-@ | | | 850,000 | | | | 993,361 | |
KY State Property & Building #87 | | | 5.000 | | | | 03/01/2020 | | | Aa3/A+*/AA-@ | | | 4,500,000 | | | | 5,082,030 | |
KY State Property & Building #82 | | | 5.250 | | | | 10/01/2015 | | | Aa3/AA-*/AA-@ | | | 2,525,000 | | | | 2,868,703 | |
KY State Property & Building #82 | | | 5.250 | | | | 10/01/2017 | | | Aa3/AA-*/AA-@ | | | 1,260,000 | | | | 1,509,883 | |
KY State Property & Building #85 | | | 5.000 | | | | 08/01/2016 | | | Aa3/AA-*/AA-@ | | | 835,000 | | | | 939,049 | |
KY State Property & Building #88 | | | 5.000 | | | | 11/01/2014 | | | Aa3/A+*/AA-@ | | | 1,000,000 | | | | 1,099,560 | |
KY State Property & Building #88 | | | 5.000 | | | | 11/01/2015 | | | Aa3/A+*/AA-@ | | | 955,000 | | | | 1,083,151 | |
KY State Property & Building #76 | | | 5.500 | | | | 08/01/2017 | | | Aa3/A+*/AA-@ | | | 190,000 | | | | 228,857 | |
KY State Property & Building #76 | | | 5.500 | | | | 08/01/2018 | | | Aa3/A+*/AA-@ | | | 1,415,000 | | | | 1,735,766 | |
KY State Property & Building #83 | | | 5.000 | | | | 10/01/2016 | | | Aa3/A+*/AA-@ | | | 775,000 | | | | 903,821 | |
KY State Property & Building #83 | | | 5.000 | | | | 10/01/2017 | | | Aa3/A+*/AA-@ | | | 100,000 | | | | 118,567 | |
KY State Property & Building #83 | | | 5.000 | | | | 10/01/2019 | | | Aa3/A+*/AA-@ | | | 1,750,000 | | | | 2,118,655 | |
KY State Property & Building #89 | | | 5.000 | | | | 11/01/2014 | | | Aa3/AA-*/AA-@ | | | 2,000,000 | | | | 2,199,120 | |
KY State Property & Building #89 | | | 5.000 | | | | 11/01/2015 | | | Aa3/AA-*/AA-@ | | | 2,230,000 | | | | 2,526,099 | |
KY State Property & Building #89 | | | 3.750 | | | | 11/01/2017 | | | Aa3/AA-*/AA-@ | | | 100,000 | | | | 112,156 | |
KY State Property & Building #89 | | | 5.000 | | | | 11/01/2020 | | | Aa3/AA-*/AA-@ | | | 200,000 | | | | 235,025 | |
KY State Turnpike Authority Economic Development | | | 5.000 | | | | 07/01/2019 | | | AA2/AA+*/AA-@ | | | 2,250,000 | | | | 2,511,540 | |
KY State Turnpike Authority Economic Development | | | 5.000 | | | | 07/01/2017 | | | Aa2/AA+*/AA-@ | | | 2,570,000 | | | | 2,983,616 | |
Lexington-Fayette Urban County Government Public Facilities | | | 4.000 | | | | 10/01/2018 | | | Aa3 | | | 1,540,000 | | | | 1,689,426 | |
Lexington-Fayette Urban County Government Public Property | | | 4.000 | | | | 05/01/2017 | | | Aa2/AA* | | | 180,000 | | | | 202,545 | |
Louisville & Jefferson Metropolitan Sewer | | | 5.000 | | | | 05/15/2018 | | | Aa3/AA*/AA-@ | | | 1,220,000 | | | | 1,393,618 | |
Louisville & Jefferson Metropolitan Sewer | | | 5.000 | | | | 05/15/2016 | | | Aa3/AA*/AA-@ | | | 500,000 | | | | 559,465 | |
The accompanying footnotes are an integral part of the financial statements.
13
DUPREE MUTUAL FUNDS — KENTUCKY TAX-FREE SHORT-TO-MEDIUM SERIES
SCHEDULE OF PORTFOLIO INVESTMENTS
Kentucky Municipal Bonds — 100% of Net Assets
June 30, 2012
| | | | | | | | | | | | | | | | | | |
| Bond Description | | Coupon | | | Maturity
Date | | | Rating# | | Par Value | | | Fair Value | |
| | | | | | | | | | | | | | | | | | |
Louisville & Jefferson Metropolitian Sewer | | | 5.000 | % | | | 05/15/2016 | | | Aa3/AA* | | $ | 100,000 | | | $ | 115,755 | |
Madison County KY School District Finance Corporation | | | 3.600 | | | | 02/01/2017 | | | Aa3 | | | 300,000 | | | | 318,138 | |
Oldham County School Building Corporation | | | 4.375 | | | | 06/01/2018 | | | Aa3 | | | 2,570,000 | | | | 2,907,544 | |
Paducah Electric Plant | | | 3.000 | | | | 10/01/2014 | | | Aa3/A-@ | | | 750,000 | | | | 789,390 | |
Warren County KY School District Finance Corporation | | | 4.000 | | | | 02/01/2015 | | | Aa3 | | | 785,000 | | | | 844,817 | |
Warren County KY School District Finance Corporation | | | 4.000 | | | | 02/01/2016 | | | Aa3 | | | 1,330,000 | | | | 1,459,928 | |
Warren County KY School District Finance Corporation | | | 4.000 | | | | 04/01/2018 | | | Aa3 | | | 725,000 | | | | 816,893 | |
Western Kentucky University | | | 3.000 | | | | 09/01/2014 | | | Aa3/AA-* | | | 1,000,000 | | | | 1,044,400 | |
Western Kentucky University | | | 4.000 | | | | 09/01/2017 | | | Aa3/AA-* | | | 2,145,000 | | | | 2,419,989 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 66,127,270 | |
| LEASE REVENUE BONDS | | | | | | | | | | | | | | | | | | |
| 12.77% of Net Assets | | | | | | | | | | | | | | | | | | |
Bullitt County KY School District Finance Corporation | | | 4.100 | | | | 10/01/2018 | | | Aa3 | | | 165,000 | | | | 174,777 | |
Daviess County School District Finance Corporation | | | 4.250 | | | | 08/01/2019 | | | Aa3 | | | 100,000 | | | | 112,223 | |
Gallatin County School District Finance Corporation | | | 4.000 | | | | 05/01/2016 | | | Aa3 | | | 175,000 | | | | 193,883 | |
Grant County School District Finance Corporation | | | 3.750 | | | | 06/01/2017 | | | Aa3 | | | 190,000 | | | | 209,621 | |
Hazard KY Independent School District Finance Corporation | | | 3.850 | | | | 09/01/2017 | | | Aa3 | | | 200,000 | | | | 216,574 | |
KY Association of Counties | | | 4.250 | | | | 02/01/2017 | | | A+* | | | 500,000 | | | | 553,945 | |
KY Association of Counties | | | 4.000 | | | | 02/01/2018 | | | A+* | | | 115,000 | | | | 126,654 | |
KY Association of Counties | | | 4.250 | | | | 02/01/2019 | | | A+* | | | 255,000 | | | | 287,729 | |
KY Asset Liability Comission Revenue University of Kentucky | | | 4.125 | | | | 10/01/2019 | | | Aa2/AA-* | | | 150,000 | | | | 167,810 | |
KY Infrastructure Authority | | | 5.250 | | | | 08/01/2013 | | | AA* | | | 1,185,000 | | | | 1,243,906 | |
KY State Property & Building #94 | | | 5.000 | | | | 05/01/2014 | | | Aa2/A+*/AA-@ | | | 1,000,000 | | | | 1,077,450 | |
KY State Property & Building #94 | | | 5.000 | | | | 05/01/2015 | | | Aa2/A+*/AA-@ | | | 1,245,000 | | | | 1,386,619 | |
KY State Property & Building #94 | | | 5.000 | | | | 05/01/2017 | | | Aa2/A+*/AA-@ | | | 500,000 | | | | 584,940 | |
KY State Property & Building #93 | | | 5.250 | | | | 02/01/2018 | | | Aa3/A+*/AA-@ | | | 510,000 | | | | 609,736 | |
KY State Property & Building #87 | | | 5.000 | | | | 03/01/2018 | | | Aa3/A+*/AA-@ | | | 100,000 | | | | 115,244 | |
KY State Property & Building | | | 5.000 | | | | 11/01/2015 | | | Aa3/A+*/AA-@ | | | 250,000 | | | | 283,635 | |
KY State Property & Building #90 | | | 5.000 | | | | 11/01/2018 | | | Aa3/A+*/AA-@ | | | 250,000 | | | | 300,038 | |
KY State Property & Building #90 | | | 5.000 | | | | 11/01/2020 | | | Aa3/A+*/AA-@ | | | 345,000 | | | | 404,751 | |
KY State Property & Building | | | 5.000 | | | | 11/01/2014 | | | Aa3/A+*/AA-@ | | | 250,000 | | | | 274,890 | |
KY State Property & Building #100 | | | 5.000 | | | | 08/01/2017 | | | Aa3/A+*/AA-@ | | | 500,000 | | | | 590,805 | |
KY State Property & Building #95 | | | 5.000 | | | | 08/01/2017 | | | Aa3/A+*/AA-@ | | | 200,000 | | | | 236,322 | |
KY State Property & Building #101 | | | 5.000 | | | | 10/01/2019 | | | Aa3/A+*/AA-@ | | | 1,050,000 | | | | 1,271,193 | |
Pendleton County School District Finance Corporation | | | 4.000 | | | | 02/01/2020 | | | Aa3 | | | 450,000 | | | | 491,332 | |
Pulaski County KY Public Property | | | 3.750 | | | | 12/01/2014 | | | Aa3 | | | 480,000 | | | | 515,698 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 11,429,775 | |
| MUNICIPAL UTILITY REVENUE BONDS | | | | | | | | | | | | | | | | | | |
| 3.11% of Net Assets | | | | | | | | | | | | | | | | | | |
KY State Rural Water Corporation | | | 3.000 | | | | 02/01/2018 | | | A+* | | | 530,000 | | | | 549,340 | |
Louisville & Jefferson County Metropolitan Sewer | | | 5.000 | | | | 05/15/2015 | | | Aa3/AA* | | | 1,000,000 | | | | 1,121,370 | |
Louisville & Jefferson County Metropolitan Sewer | | | 5.000 | | | | 05/15/2015 | | | Aa3/AA* | | | 1,000,000 | | | | 1,120,760 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 2,791,470 | |
| STATE AND LOCAL MORTGAGE REVENUE BONDS | | | | | | | | | | | | | | | | | | |
| 2.61% of Net Assets | | | | | | | | | | | | | | | | | | |
KY Housing Corporation | | | 4.875 | | | | 07/01/2023 | | | Aaa/AAA* | | | 1,500,000 | | | | 1,576,365 | |
KY Housing Corporation | | | 4.850 | | | | 01/01/2024 | | | Aaa/AAA* | | | 750,000 | | | | 761,768 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 2,338,133 | |
| HOSPITAL AND HEALTHCARE REVENUE BONDS | | | | | | | | | | | | | | | | | | |
| 2.16% of Net Assets | | | | | | | | | | | | | | | | | | |
KY State Asset/Liability Commission General Receipts | | | 4.000 | | | | 10/01/2018 | | | Aa2/AA-* | | | 105,000 | | | | 118,103 | |
KY Development Finance Authority — King’s Daughters | | | 5.000 | | | | 02/01/2016 | | | A1/A+*/A+@ | | | 1,000,000 | | | | 1,111,820 | |
KY Development Finance Authority — St. Elizabeth | | | 5.000 | | | | 05/01/2015 | | | AA-*/AA-@ | | | 400,000 | | | | 440,520 | |
KY Economic Development Finance Authority — Catholic Health | | | 4.000 | | | | 05/01/2015 | | | Aa2/AA*/AA@ | | | 250,000 | | | | 263,300 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 1,933,743 | |
The accompanying footnotes are an integral part of the financial statements.
14
DUPREE MUTUAL FUNDS — KENTUCKY TAX-FREE SHORT-TO-MEDIUM SERIES
SCHEDULE OF PORTFOLIO INVESTMENTS
Kentucky Municipal Bonds — 100% of Net Assets
June 30, 2012
| | | | | | | | | | | | | | | | | | |
| Bond Description | | Coupon | | | Maturity
Date | | | Rating# | | Par Value | | | Fair Value | |
| | | | | | | | | | | | | | | | | | |
| TURNPIKES AND TOLL ROAD BONDS | | | | | | | | | | | | | | | | | | |
| 1.11% of Net Assets | | | | | | | | | | | | | | | | | | |
KY Turnpike Authority Economic Development Road Revenue | | | 4.125 | % | | | 07/01/2019 | | | Aa2/AA+*/AA-@ | | $ | 105,000 | | | $ | 119,928 | |
KY Turnpike Economic Development | | | 5.000 | | | | 07/01/2016 | | | Aa2/AA+*/AA-@ | | | 750,000 | | | | 873,278 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 993,206 | |
| PREREFUNDED BONDS | | | | | | | | | | | | | | | | | | |
| 1.07% of Net Assets | | | | | | | | | | | | | | | | | | |
KY Development Finance Authority — Norton Health | | | 5.850 | | | | 10/01/2015 | | | BBB* | | | 885,000 | | | | 956,136 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 956,136 | |
| CERTIFICATES OF PARTICIPATION BONDS | | | | | | | | | | | | | | | | | | |
| .86% of Net Assets | | | | | | | | | | | | | | | | | | |
KY Interlocal School Transportation Assistance Equipment | | | 3.750 | | | | 03/01/2015 | | | Aa3 | | | 770,000 | | | | 770,847 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 770,847 | |
| UNIVERSITY CONSOLIDATED EDUCATION AND BUILDING REVENUE BONDS | | | | | | | | | | | |
| .56% of Net Assets | | | | | | | | | | | | | | | | | | |
Louisville & Jefferson Mortgage Revenue Papa Johns | | | 4.000 | | | | 03/01/2020 | | | Aa2/AA-* | | | 300,000 | | | | 334,746 | |
Northern Ky University General Receipts | | | 4.000 | | | | 09/01/2018 | | | Aa3/A+* | | | 150,000 | | | | 170,036 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 504,782 | |
| PUBLIC FACILITIES REVENUE BONDS | | | | | | | | | | | | | | | | | | |
| .12% of Net Assets | | | | | | | | | | | | | | | | | | |
Todd County Public Properties — Court House Facilities | | | 3.250 | | | | 06/01/2019 | | | Aa3 | | | 100,000 | | | | 108,311 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 108,311 | |
| | | | | | | | | | | | | | | | | | |
Total Investments (cost $82,940,124)(See (a) below for further explanation) 98.23% of Net Assets | | | | | | | | | $ | 87,953,673 | |
| | | | | | | | | | | | | | | | | | |
| | * | | Standard and Poor’s Corporation |
| | @ | | Fitch’s Investors Service |
| | | | All other ratings by Moody’s Investors Service, Inc. |
| | # | | Bond ratings are unaudited and not covered by Report of Independent Registered Public Accounting Firm. |
| (a) | | Represents cost for financial reporting and federal income tax purposes and differs from fair value by net unrealized appreciation of securities as follows: |
| | | | | | |
| | | | | | |
| | Unrealized appreciation | | $ | 5,078,696 | |
| | Unrealized depreciation | | | (65,147 | ) |
| | | | | | |
| | Net unrealized appreciation | | $ | 5,013,549 | |
| | | | | | |
Other Information
The following is a summary of the inputs used, as of June 30, 2012, involving the Fund’s investments in securities carried at fair value. The inputs or methodology used for valuing securities may not be an indication of the risk associated with investing in those securities. For more information on valuation inputs, and their aggregation into the levels used the the table below, please refer to the Security Valuation section in the accompanying Notes to Financial Statements.
| | | | | | |
| | | Valuation Inputs | | Municipal Bonds | |
| | | | | | |
Level 1 | | Quoted Prices | | $ | — | |
Level 2 | | Other Significant Observable Inputs | | | 87,953,673 | |
Level 3 | | Significant Unobservable Inputs | | | — | |
| | | | | | |
| | | | $ | 87,953,673 | |
| | | | | | |
The accompanying footnotes are an integral part of the financial statements.
15
KENTUCKY TAX-FREE SHORT-TO-MEDIUM SERIES
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2012
| | | | | | | | |
ASSETS: | | | | | | | | |
Investments in securities, at fair value (Cost: $82,940,124) | | | | | | $ | 87,953,673 | |
Cash | | | | | | | 666,615 | |
Receivable for fund shares sold | | | | | | | 300 | |
Interest receivable | | | | | | | 1,084,427 | |
| | | | | | | | |
Total assets | | | | | | | 89,705,015 | |
LIABILITIES: | | | | | | | | |
Payable for: | | | | | | | | |
Distributions to shareholders | | | 44,837 | | | | | |
Fund shares redeemed | | | 64,942 | | | | | |
Investment advisory fee | | | 36,751 | | | | | |
Transfer agent fee | | | 16,276 | | | | | |
Trustees fees | | | 1,239 | | | | | |
Accrued expenses | | | 13,105 | | | | | |
| | | | | | | | |
Total liabilities | | | | | | | 177,150 | |
| | | | | | | | |
NET ASSETS: | | | | | | | | |
Capital | | | | | | | 85,456,420 | |
Net accumulated realized loss on investment transactions | | | | | | | (942,104 | ) |
Net unrealized appreciation in value of investments | | | | | | | 5,013,549 | |
| | | | | | | | |
Net assets at value | | | | | | $ | 89,527,865 | |
| | | | | | | | |
NET ASSET VALUE, offering price and redemption price per share ($89,527,865 -:- 16,159,792 shares outstanding; unlimited number of shares authorized; no par value) | | | | | | $ | 5.54 | |
| | | | | | | | |
STATEMENT OF OPERATIONS
For the year ended June 30, 2012
| | | | |
Net investment income: | | | | |
Interest income | | $ | 2,535,518 | |
| | | | |
Expenses: | | | | |
Investment advisory fee | | | 429,771 | |
Transfer agent fee | | | 112,656 | |
Custodian expense | | | 15,679 | |
Professional fees | | | 24,591 | |
Trustees fees | | | 11,851 | |
Other expenses | | | 29,874 | |
| | | | |
Total expenses | | | 624,422 | |
Custodian expense reduction | | | (331 | ) |
| | | | |
Net expenses | | | 624,091 | |
| | | | |
Net investment income | | | 1,911,427 | |
| | | | |
Realized and unrealized gain on investments: | | | | |
Net realized gain | | | 88,570 | |
Net change in unrealized appreciation/depreciation | | | 2,079,426 | |
| | | | |
Net realized and unrealized gain on investments | | | 2,167,996 | |
| | | | |
Net increase in net assets resulting from operations | | $ | 4,079,423 | |
| | | | |
The accompanying notes are an integral part of the financial statements.
16
KENTUCKY TAX-FREE SHORT-TO-MEDIUM SERIES
STATEMENTS OF CHANGES IN NET ASSETS
For the years ended June 30, 2012 and 2011
| | | | | | | | |
| | | 2012 | | | 2011 | |
Operations: | | | | | | | | |
Net investment income | | $ | 1,911,427 | | | $ | 1,714,591 | |
Net realized gain on investments | | | 88,570 | | | | 199,821 | |
Net change in unrealized appreciation/depreciation | | | 2,079,426 | | | | 177,100 | |
| | | | | | | | |
Net increase in net assets resulting from operations | | | 4,079,423 | | | | 2,091,512 | |
Distributions from net investment income | | | (1,911,427 | ) | | | (1,714,591 | ) |
Net fund share transactions (Note 4) | | | 14,954,411 | | | | 2,862,186 | |
| | | | | | | | |
Total increase | | | 17,122,407 | | | | 3,239,107 | |
Net assets: | | | | | | | | |
Beginning of year | | | 72,405,458 | | | | 69,166,351 | |
| | | | | | | | |
End of year | | $ | 89,527,865 | | | $ | 72,405,458 | |
| | | | | | | | |
FINANCIAL HIGHLIGHTS
| | | | | | | | | | | | | | | | | | | | |
| Selected data for a share outstanding: | | For the years ended June 30, | |
| | | 2012 | | | 2011 | | | 2010 | | | 2009 | | | 2008 | |
Net asset value, beginning of year | | | $5.39 | | | | $5.36 | | | | $5.25 | | | | $5.16 | | | | $5.13 | |
| | | | | | | | | | | | | | | | | | | | |
Income from investment operations: | | | | | | | | | | | | | | | | | | | | |
Net investment income | | | 0.12 | | | | 0.13 | | | | 0.15 | | | | 0.17 | | | | 0.17 | |
Net gains/(losses) on securities, both realized and unrealized | | | 0.15 | | | | 0.03 | | | | 0.11 | | | | 0.09 | | | | 0.03 | |
| | | | | | | | | | | | | | | | | | | | |
Total from investment operations | | | 0.27 | | | | 0.16 | | | | 0.26 | | | | 0.26 | | | | 0.20 | |
Less distributions: | | | | | | | | | | | | | | | | | | | | |
Distributions from net investment income | | | (0.12 | ) | | | (0.13 | ) | | | (0.15 | ) | | | (0.17 | ) | | | (0.17 | ) |
| | | | | | | | | | | | | | | | | | | | |
Net asset value, end of year | | | $5.54 | | | | $5.39 | | | | $5.36 | | | | $5.25 | | | | $5.16 | |
| | | | | | | | | | | | | | | | | | | | |
Total return | | | 5.10% | | | | 3.04% | | | | 4.99% | | | | 5.02% | | | | 3.94% | |
Net assets, end of year (in thousands) | | | $89,528 | | | | $72,405 | | | | $69,166 | | | | $60,570 | | | | $53,955 | |
Ratio of net expenses to average net assets (a) | | | 0.73% | | | | 0.72% | | | | 0.72% | | | | 0.72% | | | | 0.72% | |
Ratio of net investment income to average net assets | | | 2.22% | | | | 2.44% | | | | 2.80% | | | | 3.16% | | | | 3.28% | |
Portfolio turnover | | | 4.73% | | | | 15.37% | | | | 20.26% | | | | 15.64% | | | | 14.17% | |
| (a) | | Percentages are after custodian reduction for which no recovery will be sought. Percentages before custodian reduction were: .73% for 2012; .72% for 2011; .72% for 2010; .72% for 2009; and .73% for 2008. |
The accompanying notes are an integral part of the financial statements.
17
DUPREE MUTUAL FUNDS — MISSISSIPPI TAX-FREE INCOME SERIES
SCHEDULE OF PORTFOLIO INVESTMENTS
Mississippi Municipal Bonds — 100% of Net Assets
June 30, 2012
| | | | | | | | | | | | | | | | | | |
| Bond Description | | Coupon | | | Maturity
Date | | | Rating# | | Par Value | | | Fair Value | |
| | | | | | | | | | | | | | | | | | |
| INSURED MUNICIPAL BONDS | | | | | | | | | | | | | | | | | | |
| 60.94% of Net Assets | | | | | | | | | | | | | | | | | | |
Jackson MS Municipal Airport Authority | | | 5.000 | % | | | 10/01/2031 | | | A3/A-@ | | $ | 170,000 | | | $ | 177,558 | |
Medical Center Educational Building Corporation MS Revenue | | | 5.500 | | | | 12/01/2023 | | | Aa2 | | | 120,000 | | | | 143,183 | |
MS Development Bank Special Obligation Jones County Rest Home | | | 5.250 | | | | 04/01/2028 | | | Aa3/AA-* | | | 120,000 | | | | 132,473 | |
MS Development Bank Special Obligation Capital Project | | | 5.000 | | | | 07/01/2031 | | | NR | | | 20,000 | | | | 20,470 | |
MS Development Bank Special Obligation Canton — Series A | | | 5.750 | | | | 10/01/2031 | | | Aa3 | | | 370,000 | | | | 424,897 | |
MS Development Bank Special Obligation Meridian Water and Sewer | | | 5.125 | | | | 07/01/2026 | | | A* | | | 50,000 | | | | 50,534 | |
MS Development Bank Special Obligation Southaven Water | | | 5.000 | | | | 03/01/2025 | | | A+* | | | 325,000 | | | | 351,358 | |
MS Development Bank Special Obligation Highway Construction | | | 5.000 | | | | 01/01/2027 | | | Aa3/AA-* | | | 125,000 | | | | 138,738 | |
MS Development Bank Special Obligation Highway — Desoto | | | 4.750 | | | | 01/01/2035 | | | Aa3/AA-* | | | 125,000 | | | | 133,601 | |
MS Development Bank Special Obligation Jackson Water/Sewer | | | 5.000 | | | | 09/01/2025 | | | Aa3/AA-* | | | 100,000 | | | | 107,117 | |
MS Development Bank Special Obligation Jackson Water/Sewer | | | 5.000 | | | | 09/01/2029 | | | Aa3/AA-* | | | 60,000 | | | | 63,672 | |
MS Development Bank Special Obligation Jackson Water & Sewer | | | 5.000 | | | | 09/01/2034 | | | Aa3/AA-* | | | 335,000 | | | | 350,410 | |
MS Development Bank Special Obligation Rankin Utilities | | | 5.000 | | | | 01/01/2028 | | | Aa3/AA-* | | | 55,000 | | | | 59,701 | |
MS Development Bank Special Obligation Capital Improvement | | | 5.250 | | | | 07/01/2026 | | | Aa3/AA-* | | | 125,000 | | | | 136,523 | |
MS Development Bank Special Obligation Lee County School | | | 4.500 | | | | 09/01/2021 | | | A1 | | | 100,000 | | | | 100,279 | |
MD Development Bank Special Obligation Jackson Public | | | 5.375 | | | | 04/01/2028 | | | Aa3 | | | 70,000 | | | | 78,607 | |
MS Development Bank Special Obligation Hinds Community | | | 5.000 | | | | 10/01/2026 | | | Aa2 | | | 85,000 | | | | 96,540 | |
MS Development Bank Special Obligation Hinds College | | | 5.125 | | | | 10/01/2028 | | | Aa2 | | | 100,000 | | | | 113,618 | |
MS Development Bank Special Obligation Hinds College | | | 5.375 | | | | 10/01/2033 | | | Aa2 | | | 60,000 | | | | 67,807 | |
MS Development Bank Special Obligation Hinds Community | | | 5.000 | | | | 04/01/2036 | | | Aa3/AA-* | | | 100,000 | | | | 110,270 | |
MS Development Bank Special Obligation Capital Projects | | | 5.875 | | | | 07/01/2024 | | | NR | | | 20,000 | | | | 20,994 | |
MS Development Bank Special Obligation Capital Projects | | | 5.000 | | | | 07/01/2024 | | | NR | | | 25,000 | | | | 25,270 | |
MS Development Bank Special Obligation Desoto County | | | 5.000 | | | | 07/01/2032 | | | A* | | | 45,000 | | | | 48,053 | |
MS Home Corporation Single Family Mortgage — Series E-1 | | | 5.050 | | | | 12/01/2028 | | | Aaa | | | 35,000 | | | | 36,594 | |
MS Development Bank Special Obligation Lowndes County | | | 5.000 | | | | 07/01/2022 | | | Aa3/AA-* | | | 80,000 | | | | 88,441 | |
MS Development Bank Special Obligation Lowndes County | | | 5.000 | | | | 07/01/2027 | | | Aa3/AA-* | | | 150,000 | | | | 160,961 | |
MS Development Special Obligation Madison County Highway | | | 5.000 | | | | 01/01/2027 | | | Aa3/AA-* | | | 295,000 | | | | 332,296 | |
MS Development Bank Special Obligation Highway Construction | | | 5.000 | | | | 01/01/2027 | | | Aa3/AA-* | | | 245,000 | | | | 271,926 | |
MS Development Bank Special Obligation Highway Construction | | | 4.750 | | | | 01/01/2031 | | | Aa3/AA-* | | | 125,000 | | | | 135,629 | |
MS Development Bank Special Obligation Jones County College | | | 5.100 | | | | 03/01/2028 | | | AA-* | | | 55,000 | | | | 62,006 | |
MS Development Bank Special Obligation Jones County Junior | | | 5.000 | | | | 03/01/2033 | | | AA-* | | | 150,000 | | | | 166,195 | |
MS Development Bank Special Obligation Jones County Junior | | | 5.125 | | | | 03/01/2039 | | | AA-* | | | 45,000 | | | | 49,597 | |
MS State University Educational Building Corporate Revenue | | | 5.000 | | | | 08/01/2024 | | | Aa2/A+*/AA@ | | | 225,000 | | | | 247,532 | |
MS State University Educational Building Corporation | | | 5.000 | | | | 08/01/2028 | | | Aa2/A+*/AA@ | | | 30,000 | | | | 32,271 | |
University Southern MS Education Building — Series A | | | 5.000 | | | | 03/01/2022 | | | Aa2 | | | 100,000 | | | | 110,943 | |
University Southern MS Educational Building Corporation | | | 5.000 | | | | 03/01/2032 | | | Aa2 | | | 50,000 | | | | 53,379 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 4,699,443 | |
| UNIVERSITY CONSOLIDATED EDUCATION AND BUILDING REVENUE BONDS | | | | | | | | | | | |
| 12.97% of Net Assets | | | | | | | | | | | | | | | | | | |
Alcorn State University Educational Building MS Revenue | | | 5.125 | | | | 09/01/2034 | | | Aa2 | | | 95,000 | | | | 104,017 | |
Jackson State University Education Building | | | 5.000 | | | | 03/01/2034 | | | Aa2/AA-* | | | 175,000 | | | | 191,903 | |
MS State University Educational Building Corporate Revenue | | | 5.250 | | | | 08/01/2033 | | | Aa2/AA@ | | | 50,000 | | | | 55,087 | |
MS State University Educational Building Corporation | | | 5.000 | | | | 08/01/2036 | | | Aa2/AA@ | | | 175,000 | | | | 193,128 | |
University Southern MS Educational Building Corporation | | | 5.125 | | | | 09/01/2029 | | | Aa2/A+* | | | 100,000 | | | | 112,586 | |
University Southern MS Education Building Athletics | | | 5.000 | | | | 03/01/2034 | | | Aa2 | | | 105,000 | | | | 111,590 | |
University of Mississippi Educational Building Corporation | | | 5.000 | | | | 10/01/2028 | | | Aa2/AA@ | | | 200,000 | | | | 231,582 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 999,893 | |
| GENERAL OBLIGATION BONDS | | | | | | | | | | | | | | | | | | |
| 7.42% of Net Assets | | | | | | | | | | | | | | | | | | |
MS State General Obligation | | | 5.100 | | | | 11/15/2012 | | | Aa2/AA*/AA+@ | | | 10,000 | | | | 10,175 | |
MS State Capital Improvement Projects — Series A | | | 5.000 | | | | 10/01/2029 | | | Aa2/AA*/AA+@ | | | 145,000 | | | | 170,069 | |
MS State Capital Improvements Projects — Series A | | | 5.000 | | | | 10/01/2036 | | | Aa2/AA*/AA+@ | | | 280,000 | | | | 319,360 | |
MS State Refunding — Series A | | | 5.250 | | | | 11/01/2019 | | | Aa2/AA*/AA+@ | | | 50,000 | | | | 62,510 | |
Richland MS Tax Increment | | | 5.600 | | | | 06/01/2013 | | | NR | | | 10,000 | | | | 10,021 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 572,135 | |
The accompanying footnotes are an integral part of the financial statements.
18
DUPREE MUTUAL FUNDS — MISSISSIPPI TAX-FREE INCOME SERIES
SCHEDULE OF PORTFOLIO INVESTMENTS
Mississippi Municipal Bonds — 100% of Net Assets
June 30, 2012
| | | | | | | | | | | | | | | | | | |
| Bond Description | | Coupon | | | Maturity
Date | | | Rating# | | Par Value | | | Fair Value | |
| | | | | | | | | | | | | | | | | | |
| PREREFUNDED BONDS | | | | | | | | | | | | | | | | | | |
| 6.11% of Net Assets | | | | | | | | | | | | | | | | | | |
MS Development Bank Special Obligation Gulfport Combined Water | | | 5.500 | % | | | 07/01/2015 | | | Aa3/AA-* | | $ | 10,000 | | | $ | 10,203 | |
MS Development Bank Special Obligation Jackson Water & Sewer | | | 5.000 | | | | 09/01/2032 | | | Aa3/A+* | | | 150,000 | | | | 151,241 | |
Olive Branch MS Public Improvement | | | 4.125 | | | | 06/01/2022 | | | Aa2 | | | 100,000 | | | | 103,547 | |
Pearl River County MS Certificates of Participation | | | 4.500 | | | | 04/01/2021 | | | Baa2 | | | 200,000 | | | | 206,347 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 471,338 | |
| PUBLIC FACILITIES REVENUE BONDS | | | | | | | | | | | | | | | | | | |
| 4.25% of Net Assets | | | | | | | | | | | | | | | | | | |
MS Development Bank Special Obligations Department of Corrections | | | 5.250 | | | | 08/01/2027 | | | AA-*/AA@ | | | 50,000 | | | | 56,530 | |
MS Development Bank Special Obligation Department of Corrections | | | 5.250 | | | | 08/01/2027 | | | AA-*/AA@ | | | 240,000 | | | | 271,341 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 327,871 | |
| TURNPIKES AND TOLL ROAD BONDS | | | | | | | | | | | | | | | | | | |
| 3.12% of Net Assets | | | | | | | | | | | | | | | | | | |
MS State Development Bank Special Obligation Highway | | | 5.000 | | | | 01/01/2025 | | | Aa3/AA-* | | | 200,000 | | | | 240,294 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 240,294 | |
| LEASE REVENUE BONDS | | | | | | | | | | | | | | | | | | |
| 3.10% of Net Assets | | | | | | | | | | | | | | | | | | |
MS Development Bank Special Obligation Desoto County | | | 5.250 | | | | 07/01/2031 | | | A* | | | 225,000 | | | | 238,732 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 238,732 | |
| ESCROWED TO MATURITY BONDS | | | | | | | | | | | | | | | | | | |
| .42% of Net Assets | | | | | | | | | | | | | | | | | | |
Harrison County MS Wastewater Management District | | | 5.000 | | | | 02/01/2015 | | | AA+* | | | 25,000 | | | | 27,166 | |
MS Gulf Coast Regional Wastewater Treatment Facilities | | | 7.000 | | | | 07/01/2012 | | | NR | | | 5,000 | | | | 5,002 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 32,168 | |
| | | | | | | | | | | | | | | | | | |
Total Investments (cost $7,147,028)(See (a) below for further explanation) 98.33% of Net Assets | | | | | | | | | $ | 7,581,874 | |
| | | | | | | | | | | | | | | | | | |
| | * | | Standard and Poor’s Corporation |
| | @ | | Fitch’s Investors Service |
| | | | All other ratings by Moody’s Investors Service, Inc. |
| | # | | Bond ratings are unaudited and not covered by Report of Independent Registered Public Accounting Firm. |
| (a) | | Represents cost for financial reporting and federal income tax purposes and differs from fair value by net unrealized appreciation of securities as follows: |
| | | | | | |
| | | | | | |
| | Unrealized appreciation | | $ | 441,147 | |
| | Unrealized depreciation | | | (6,301 | ) |
| | | | | | |
| | Net unrealized appreciation | | $ | 434,846 | |
| | | | | | |
Other Information
The following is a summary of the inputs used, as of June 30, 2012, involving the Fund’s investments in securities carried at fair value. The inputs or methodology used for valuing securities may not be an indication of the risk associated with investing in those securities. For more information on valuation inputs, and their aggregation into the levels used in the table below, please refer to the Security Valuation section in the accompanying Notes to Financial Statements.
| | | | | | |
| | | | | | |
| | | Valuation Inputs | | Municipal Bonds | |
| | | | | | |
Level 1 | | Quoted Prices | | $ | — | |
Level 2 | | Other Significant Observable Inputs | | | 7,581,874 | |
Level 3 | | Significant Unobservable Inputs | | | — | |
| | | | | | |
| | | | $ | 7,581,874 | |
| | | | | | |
The accompanying footnotes are an integral part of the financial statements.
19
MISSISSIPPI TAX-FREE INCOME SERIES
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2012
| | | | | | | | |
ASSETS: | | | | | | | | |
Investments in securities, at fair value (Cost: $7,147,028) | | | | | | $ | 7,581,874 | |
Cash | | | | | | | 56,936 | |
Interest receivable | | | | | | | 118,478 | |
| | | | | | | | |
Total assets | | | | | | | 7,757,288 | |
LIABILITIES: | | | | | | | | |
Payable for: | | | | | | | | |
Distributions to shareholders | | | 35,727 | | | | | |
Investment advisory fee | | | 1,846 | | | | | |
Transfer agent fee | | | 2,627 | | | | | |
Trustees fees | | | 130 | | | | | |
Accrued expenses | | | 4,983 | | | | | |
| | | | | | | | |
Total liabilities | | | | | | | 45,313 | |
| | | | | | | | |
NET ASSETS: | | | | | | | | |
Capital | | | | | | | 7,283,120 | |
Accumulated net investment income | | | | | | | 16,274 | |
Net accumulated realized loss on investment transactions | | | | | | | (22,265 | ) |
Net unrealized appreciation in value of investments | | | | | | | 434,846 | |
| | | | | | | | |
Net assets at value | | | | | | $ | 7,711,975 | |
| | | | | | | | |
NET ASSET VALUE, offering price and redemption price per share ($7,711,975 -:- 641,889 shares outstanding; unlimited number of shares authorized; no par value) | | | | | | $ | 12.01 | |
| | | | | | | | |
STATEMENT OF OPERATIONS
For the year ended June 30, 2012
| | | | |
Net investment income: | | | | |
Interest income | | $ | 297,517 | |
| | | | |
Expenses: | | | | |
Investment advisory fee | | | 35,061 | |
Transfer agent fee | | | 10,846 | |
Custodian expense | | | 5,136 | |
Pricing fees | | | 4,500 | |
Professional fees | | | 4,163 | |
Trustees fees | | | 968 | |
Registration fees | | | 1,311 | |
Other expenses | | | 2,454 | |
| | | | |
Total expenses | | | 64,439 | |
Fees waived by Adviser | | | (18,832 | ) |
Custodian expense reduction | | | (28 | ) |
| | | | |
Net expenses | | | 45,579 | |
| | | | |
Net investment income | | | 251,938 | |
| | | | |
Realized and unrealized gain/(loss) on investments: | | | | |
Net realized loss | | | (22,265 | ) |
Net change in unrealized appreciation/depreciation | | | 419,712 | |
| | | | |
Net realized and unrealized gain on investments | | | 397,447 | |
| | | | |
Net increase in net assets resulting from operations | | $ | 649,385 | |
| | | | |
The accompanying notes are an integral part of the financial statements.
20
MISSISSIPPI TAX-FREE INCOME SERIES
STATEMENTS OF CHANGES IN NET ASSETS
For the years ended June 30, 2012 and 2011
| | | | | | | | |
| | | 2012 | | | 2011 | |
Operations: | | | | | | | | |
Net investment income | | $ | 251,938 | | | $ | 242,439 | |
Net realized gain/(loss) on investments | | | (22,265 | ) | | | 49,358 | |
Net change in unrealized appreciation/depreciation | | | 419,712 | | | | (90,754 | ) |
| | | | | | | | |
Net increase in net assets resulting from operations | | | 649,385 | | | | 201,043 | |
Distributions from net investment income | | | (251,732 | ) | | | (242,439 | ) |
Net fund share transactions (Note 4) | | | 938,255 | | | | 96,180 | |
| | | | | | | | |
Total increase | | | 1,335,908 | | | | 54,784 | |
Net assets: | | | | | | | | |
Beginning of year | | | 6,376,067 | | | | 6,321,283 | |
| | | | | | | | |
End of year | | $ | 7,711,975 | | | $ | 6,376,067 | |
| | | | | | | | |
Accumulated net investment income | | $ | 16,274 | | | $ | — | |
| | | | | | | | |
FINANCIAL HIGHLIGHTS
| | | | | | | | | | | | | | | | | | | | |
| Selected data for a share outstanding: | | For the years ended June 30, | |
| | | 2012 | | | 2011 | | | 2010 | | | 2009 | | | 2008 | |
Net asset value, beginning of year | | | $11.33 | | | | $11.41 | | | | $11.03 | | | | $11.08 | | | | $11.24 | |
| | | | | | | | | | | | | | | | | | | | |
Income from investment operations: | | | | | | | | | | | | | | | | | | | | |
Net investment income | | | 0.42 | | | | 0.44 | | | | 0.45 | | | | 0.45 | | | | 0.45 | |
Net gains/(losses) on securities, both realized and unrealized | | | 0.68 | | | | (0.08 | ) | | | 0.38 | | | | (0.05 | ) | | | (0.16 | ) |
| | | | | | | | | | | | | | | | | | | | |
Total from investment operations | | | 1.10 | | | | 0.36 | | | | 0.83 | | | | 0.40 | | | | 0.29 | |
Less distributions: | | | | | | | | | | | | | | | | | | | | |
Distributions from net investment income | | | (0.42 | ) | | | (0.44 | ) | | | (0.45 | ) | | | (0.45 | ) | | | (0.45 | ) |
Distributions from capital gains | | | — | | | | — | | | | — | | | | — | (b) | | | — | (b) |
| | | | | | | | | | | | | | | | | | | | |
Net asset value, end of year | | | $12.01 | | | | $11.33 | | | | $11.41 | | | | $11.03 | | | | $11.08 | |
| | | | | | | | | | | | | | | | | | | | |
Total return | | | 9.87% | | | | 3.19% | | | | 7.65% | | | | 3.72% | | | | 2.64% | |
Net assets, end of year (in thousands) | | | $7,712 | | | | $6,376 | | | | $6,321 | | | | $5,001 | | | | $4,447 | |
Ratio of net expenses to average net assets (a) | | | 0.65% | | | | 0.58% | | | | 0.45% | | | | 0.44% | | | | 0.45% | |
Ratio of net investment income to average net assets | | | 3.59% | | | | 3.86% | | | | 3.99% | | | | 4.11% | | | | 4.02% | |
Portfolio turnover | | | 9.99% | | | | 20.53% | | | | 10.04% | | | | 9.30% | | | | 2.79% | |
| (a) | | Percentages are after expenses waived by Adviser and Custodian reduction. No recovery of these waivers and reductions will be sought. Expenses waived by Adviser and Custodian reduction were: .27% and 0% for 2012; .26% and 0% for 2011; .46% and 0% for 2010; .53% and .08% for 2009; and .46% and .10% for 2008, respectively. |
| (b) | | Rounds to less than $0.01. |
The accompanying notes are an integral part of the financial statements.
21
DUPREE MUTUAL FUNDS — NORTH CAROLINA TAX-FREE INCOME SERIES | |
SCHEDULE OF PORTFOLIO INVESTMENTS
North Carolina Municipal Bonds — 100% of Net Assets
June 30, 2012
| | | | | | | | | | | | | | | | | | |
| Bond Description | | Coupon | | | Maturity
Date | | | Rating# | | Par Value | | | Fair Value | |
| | | | | | | | | | | | | | | | | | |
| INSURED MUNICIPAL BONDS | | | | | | | | | | | | | | | | | | |
| 45.47% of Net Assets | | | | | | | | | | | | | | | | | | |
Asheville NC Water System Revenue | | | 4.750 | ^% | | | 08/01/2027 | | | Aa2/AA* | | $ | 1,000,000 | | | $ | 1,080,520 | |
Burke County NC Certificates of Participation | | | 5.000 | | | | 04/01/2023 | | | A1/A* | | | 1,000,000 | | | | 1,080,460 | |
Cabarrus County NC Certificates of Participation Installment | | | 5.000 | ^ | | | 06/01/2025 | | | Aa2/AA*/AA@ | | | 1,000,000 | | | | 1,114,640 | |
Charlotte NC Airport Revenue | | | 5.250 | | | | 07/01/2023 | | | Aa3/A+*/A+@ | | | 1,000,000 | | | | 1,060,930 | |
Charlotte NC Airport Revenue Refunding Charlotte Douglas | | | 5.000 | | | | 07/01/2025 | | | Aa3/A+*/A+@ | | | 1,000,000 | | | | 1,092,310 | |
Davie County NC Public School & Community College Facility | | | 5.000 | | | | 06/01/2023 | | | Aa3/A+* | | | 1,000,000 | | | | 1,101,480 | |
Davie County NC Public School & Community College Facility | | | 5.000 | | | | 06/01/2025 | | | Aa3/A+* | | | 1,690,000 | | | | 1,839,616 | |
Franklin County NC Certificates of Participation | | | 5.000 | | | | 09/01/2027 | | | Aa3/A+* | | | 750,000 | | | | 816,458 | |
Harnett County NC Certificates of Participation | | | 5.000 | | | | 06/01/2027 | | | Aa3/AA-* | | | 300,000 | | | | 331,323 | |
Henderson County NC Certificates of Participation | | | 5.000 | | | | 05/01/2025 | | | Aa3/AA-*/AA-@ | | | 1,000,000 | | | | 1,072,050 | |
Iredell County NC Certificates of Participation School Project | | | 5.000 | | | | 06/01/2024 | | | Aa3/AA-* | | | 1,000,000 | | | | 1,085,420 | |
Johnston NC Memorial Hospital Authority | | | 5.250 | | | | 10/01/2028 | | | Aa3/AA-* | | | 500,000 | | | | 556,240 | |
Lee County NC Certificates of Participation | | | 5.000 | | | | 04/01/2025 | | | Aa3/AA-* | | | 550,000 | | | | 602,217 | |
Montgomery County NC Certificates of Participation — Series A | | | 5.000 | | | | 02/01/2030 | | | A-* | | | 1,680,000 | | | | 1,780,078 | |
Nash County NC Limited Obligation | | | 5.000 | | | | 10/01/2030 | | | Aa3/AA-* | | | 1,640,000 | | | | 1,876,914 | |
NC Medical Care Community Hospital Morehead Memorial Hospital | | | 5.000 | | | | 11/01/2026 | | | Aa3/AA-* | | | 2,500,000 | | | | 2,588,050 | |
NC Eastern Municipal Power Agency Power System Revenue | | | 5.500 | | | | 01/01/2017 | | | Baa1/A-@ | | | 45,000 | | | | 45,011 | |
NC Eastern Municipal Power Agency Power System Revenue | | | 6.000 | | | | 01/01/2025 | | | Baa1/BBB*/A-@ | | | 1,000,000 | | | | 1,310,900 | |
NC Eastern Municipal Power Agency Power System Revenue | | | 5.000 | | | | 01/01/2021 | | | A-*/A-@ | | | 1,000,000 | | | | 1,122,370 | |
NC Eastern Municipal Power Agency Power System Revenue | | | 6.000 | | | | 01/01/2018 | | | Baa1 | | | 1,000,000 | | | | 1,220,370 | |
NC Eastern Municipal Power Agency — Series B | | | 6.000 | | | | 01/01/2022 | | | Aa3/AA-*/AA-@ | | | 915,000 | | | | 1,165,774 | |
NC Infrastructure Finance Corporation Certificates of Participation | | | 5.000 | | | | 02/01/2024 | | | Aa1/AA+*/AA+@ | | | 1,000,000 | | | | 1,113,690 | |
NC Medical Care Community Hospital Revenue — Stanly Hospital | | | 5.375 | | | | 10/01/2014 | | | A-*/BBB+@ | | | 20,000 | | | | 20,005 | |
Randolph County NC Certificates of Participation | | | 5.000 | | | | 02/01/2027 | | | Aa3 | | | 1,000,000 | | | | 1,071,810 | |
Rockingham County NC Certificates of Participation | | | 5.000 | | | | 04/01/2032 | | | Aa3/AA-* | | | 1,325,000 | | | | 1,420,572 | |
Sampson County NC Certificates of Participation | | | 5.000 | | | | 06/01/2022 | | | Aa3/AA-* | | | 1,250,000 | | | | 1,399,388 | |
Sampson County NC Certificates of Participation | | | 5.000 | | | | 06/01/2026 | | | Aa3/AA-* | | | 1,000,000 | | | | 1,091,820 | |
Thomasville NC Combined Enterprise System Revenue | | | 4.750 | | | | 05/01/2028 | | | Aa3/AA-* | | | 435,000 | | | | 483,737 | |
University NC System Pool Revenue — Series A | | | 5.000 | | | | 10/01/2033 | | | Aa3/A+* | | | 430,000 | | | | 457,021 | |
University of NC Wilmington Certificates of Participation | | | 5.250 | | | | 06/01/2025 | | | A-* | | | 1,000,000 | | | | 1,062,180 | |
University of NC Wilmington Student Housing Project | | | 5.000 | | | | 06/01/2025 | | | A-* | | | 580,000 | | | | 617,961 | |
University of NC System Pool Revenue — Series A | | | 5.000 | | | | 10/01/2026 | | | Aa3 | | | 1,000,000 | | | | 1,121,130 | |
University of NC System Pool Revenue — Series A | | | 5.000 | | | | 10/01/2033 | | | Aa3 | | | 1,000,000 | | | | 1,091,780 | |
Wilmington NC Certificates of Participation | | | 5.000 | | | | 06/01/2032 | | | Aa2/AA*/AA@ | | | 1,500,000 | | | | 1,561,515 | |
Wilmington NC Store Water Revenue | | | 5.000 | | | | 06/01/2028 | | | Aa2/AA* | | | 500,000 | | | | 542,805 | |
Wilson NC Certificates of Participation Public Facilities | | | 5.000 | | | | 05/01/2021 | | | Aa3/AA-* | | | 780,000 | | | | 868,702 | |
Wilson NC Certificates of Participation Public Facilities | | | 5.000 | | | | 05/01/2025 | | | Aa3/AA-* | | | 750,000 | | | | 820,245 | |
Wilson County Certificates of Participation Public Facility | | | 5.000 | | | | 05/01/2029 | | | Aa3/AA-* | | | 1,355,000 | | | | 1,461,571 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 40,149,063 | |
| CERTIFICATES OF PARTICIPATION BONDS (UNINSURED) | | | | | | | | | | | | | | | |
| 15.52% of Net Assets | | | | | | | | | | | | | | | | | | |
Buncombe County NC Limited Obligation | | | 5.000 | ** | | | 06/01/2032 | | | Aa2/AA+* | | | 250,000 | | | | 282,765 | |
Cabarrus County NC Certificates of Participation | | | 5.000 | ^ | | | 01/01/2029 | | | Aa2/AA*/AA@ | | | 750,000 | | | | 829,643 | |
Charlotte NC Certificates of Participation | | | 5.000 | | | | 12/01/2029 | | | Aa1/AA+* | | | 340,000 | | | | 393,326 | |
Charlotte NC Certificates of Participation Convention Facility | | | 5.000 | | | | 12/01/2024 | | | Aa2/AA+*/AA@ | | | 1,000,000 | | | | 1,072,300 | |
Charlotte NC Certificates of Participation Transit Project | | | 5.000 | | | | 06/01/2035 | | | Aa2/AA+*/AA+@ | | | 500,000 | | | | 518,535 | |
Charlotte NC Certificates of Participation | | | 5.000 | | | | 06/01/2026 | | | Aa2/AA+*/AA+@ | | | 1,455,000 | | | | 1,610,118 | |
Charlotte NC Certificates of Participation | | | 5.000 | | | | 06/01/2027 | | | Aa2/AA+*/AA+@ | | | 775,000 | | | | 854,531 | |
Charlotte NC Certificates of Participation Convention Facility | | | 5.000 | | | | 06/01/2034 | | | Aa2/AA+*/AA@ | | | 900,000 | | | | 977,714 | |
Forsyth County NC Certificates of Participation | | | 5.000 | | | | 10/01/2018 | | | Aa1/AA+*/AA+@ | | | 5,000 | | | | 5,008 | |
Forsyth County NC Certificates of Participation | | | 5.000 | | | | 02/01/2026 | | | Aa1/AA+*/AA+@ | | | 550,000 | | | | 579,156 | |
Forsyth County Limited Tax | | | 5.000 | | | | 04/01/2031 | | | Aa1/AA+*/AA+@ | | | 335,000 | | | | 381,555 | |
Mecklenburg County NC Certificates of Participation — Series B | | | 5.000 | | | | 02/01/2026 | | | Aa1/AA+*/AA+@ | | | 1,000,000 | | | | 1,105,430 | |
Mecklenburg County NC Certificates of Participation — Series A | | | 5.000 | | | | 02/01/2028 | | | Aa1/AA+*/AA+@ | | | 415,000 | | | | 460,347 | |
Mooresville NC Certificates of Participation | | | 5.000 | | | | 09/01/2032 | | | AA-* | | | 1,890,000 | | | | 2,017,443 | |
NC Infrastructure Finance Corporation Certificates of Participation | | | 5.000 | | | | 02/01/2025 | | | Aa1/AA+*/AA+@ | | | 200,000 | | | | 216,961 | |
The accompanying footnotes are an integral part of the financial statements.
22
DUPREE MUTUAL FUNDS — NORTH CAROLINA TAX-FREE INCOME SERIES | |
SCHEDULE OF PORTFOLIO INVESTMENTS
North Carolina Municipal Bonds — 100% of Net Assets
June 30, 2012
| | | | | | | | | | | | | | | | | | |
| Bond Description | | Coupon | | | Maturity
Date | | | Rating# | | Par Value | | | Fair Value | |
| | | | | | | | | | | | | | | | | | |
Pitt County NC Certificates of Participation | | | 5.000 | % | | | 04/01/2027 | | | Aa3/AA-*/AA@ | | $ | 500,000 | | | $ | 565,920 | |
Watauga NC Public Facilities Corporation Limited Obligation | | | 5.000 | | | | 06/01/2027 | | | Aa3/AA-* | | | 750,000 | | | | 857,115 | |
Wilmington NC Certificates of Participation — Series A | | | 5.000 | | | | 06/01/2038 | | | Aa2/AA*/AA@ | | | 250,000 | | | | 268,647 | |
Winston Salem NC Certificates of Participation — Series A | | | 4.750 | | | | 06/01/2031 | | | Aa1/AA+*/AA+@ | | | 670,000 | | | | 710,515 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 13,707,029 | |
| HOSPITAL AND HEALTHCARE REVENUE BONDS | | | | | | | | | | | | | | | | | | |
| 8.73% of Net Assets | | | | | | | | | | | | | | | | | | |
Charlotte Mecklenburg NC Hospital Authority Health Care | | | 5.000 | | | | 01/15/2031 | | | Aa3/AA-* | | | 450,000 | | | | 476,766 | |
Charlotte Mecklenburg Hospital Authority NC Health Care | | | 5.000 | | | | 01/15/2027 | | | Aa3/AA-* | | | 1,090,000 | | | | 1,184,895 | |
Charlotte-Mecklenburg Hospital | | | 5.250 | | | | 01/15/2039 | | | Aa3/AA-* | | | 750,000 | | | | 817,913 | |
NC Medical Care Community Hospital Revenue NC Baptist Hospital | | | 5.000 | | | | 06/01/2034 | | | Aa3/AA-* | | | 1,100,000 | | | | 1,184,073 | |
NC State Medical Care Commission Hospital Revenue Baptist Hospital | | | 5.250 | | | | 06/01/2029 | | | Aa3/AA-* | | | 645,000 | | | | 721,536 | |
NC Medical Care Community Hospital Revenue Baptist Hospital | | | 4.750 | | | | 06/01/2030 | | | Aa3/AA-* | | | 405,000 | | | | 434,533 | |
NC Medical Care Community Health Care Facilities Revenue | | | 5.000 | | | | 06/01/2034 | | | Aa2/AA*/AA@ | | | 1,670,000 | | | | 1,803,583 | |
NC State Medical Care Commission Duke University Health | | | 5.000 | ** | | | 06/01/2035 | | | Aa2/AA*/AA@ | | | 500,000 | | | | 548,765 | |
NC State Medical Care Commission Health Care Facilities | | | 5.000 | | | | 07/01/2030 | | | A1/A+*/A+@ | | | 500,000 | | | | 537,150 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 7,709,214 | |
| UNIVERSITY CONSOLIDATED EDUCATION AND BUILDING REVENUE BONDS | | | | | | | | | | | |
| 8.33% of Net Assets | | | | | | | | | | | | | | | | | | |
NC Capital Facilities Financial Agency Education Wake Forest | | | 5.000 | | | | 01/01/2031 | | | Aa3/AA* | | | 500,000 | | | | 572,034 | |
NC Capital Facilities Finance Agency Wake Forest University | | | 5.000 | | | | 01/01/2038 | | | Aa3/AA* | | | 1,250,000 | | | | 1,376,575 | |
NC Capital Facilities Financial Agency Revenue Duke University | | | 5.000 | | | | 10/01/2038 | | | Aa1/AA+* | | | 500,000 | | | | 562,340 | |
Pitt County NC Limited Obligation — Series A | | | 5.000 | | | | 04/01/2035 | | | Aa3/AA-*/AA@ | | | 105,000 | | | | 115,986 | |
University NC Chapel Hill Revenue General Refunding | | | 5.000 | | | | 12/01/2034 | | | Aaa/AA+*/AAA@ | | | 1,000,000 | | | | 1,111,710 | |
University of NC at Charlotte — Series A | | | 5.000 | | | | 04/01/2031 | | | Aa3/AA-* | | | 750,000 | | | | 871,883 | |
University of NC Greensboro | | | 5.000 | ** | | | 04/01/2031 | | | Aa3/A+* | | | 500,000 | | | | 563,265 | |
University of NC System Pool Revenue General Trust Indenture | | | 5.000 | | | | 10/01/2034 | | | Aa2 | | | 1,950,000 | | | | 2,186,282 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 7,360,075 | |
| PUBLIC FACILITIES REVENUE BONDS | | | | | | | | | | | | | | | | | | |
| 6.66% of Net Assets | | | | | | | | | | | | | | | | | | |
Jacksonville Public Facilities Corporation Limited Obligation | | | 5.000 | | | | 04/01/2031 | | | A1/A+@ | | | 265,000 | | | | 296,434 | |
Jacksonville Public Facilities Corporation Limited Obligation | | | 5.000 | | | | 04/01/2032 | | | A1/A+@ | | | 100,000 | | | | 110,991 | |
Moore County NC | | | 5.000 | | | | 06/01/2031 | | | Aa3/AA-* | | | 2,750,000 | | | | 3,087,755 | |
Raleigh Durham NC Airport | | | 5.000 | | | | 05/01/2029 | | | Aa3/AA-@ | | | 235,000 | | | | 266,375 | |
Raleigh Durham NC Airport | | | 5.000 | | | | 05/01/2036 | | | Aa3/AA-@ | | | 1,480,000 | | | | 1,628,829 | |
Raleigh Durham NC Airport | | | 5.000 | | | | 05/01/2032 | | | Aa3/AA-@ | | | 440,000 | | | | 489,988 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 5,880,372 | |
| LEASE REVENUE BONDS | | | | | | | | | | | | | | | | | | |
| 6.12% of Net Assets | | | | | | | | | | | | | | | | | | |
Charlotte NC Water and Sewer Systems Revenue | | | 4.500 | | | | 07/01/2028 | | | Aaa/AAA*/AAA@ | | | 750,000 | | | | 809,505 | |
Johnston County NC Installment Financing Contract | | | 5.000 | | | | 10/15/2027 | | | Aa3/AA* | | | 570,000 | | | | 647,309 | |
NC State Turnpike Authority Monroe Connector System | | | 5.000 | | | | 07/01/2031 | | | Aa2/AA* | | | 1,385,000 | | | | 1,588,055 | |
Orange County NC Public Facilities Company Limited Obligation | | | 4.750 | | | | 10/01/2032 | | | Aa2/AA*/AA+@ | | | 750,000 | | | | 839,768 | |
Union County NC Limited Obligation Refunding | | | 5.000 | | | | 12/01/2024 | | | Aa2/AA-*/AA@ | | | 125,000 | | | | 155,018 | |
University NC University Revenues Chapel Hill | | | 5.000 | | | | 12/01/2031 | | | Aaa/AA+*/AAA@ | | | 1,215,000 | | | | 1,360,908 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 5,400,563 | |
| MUNICIPAL UTILITY REVENUE BONDS | | | | | | | | | | | | | | | | | | |
| 4.13% of Net Assets | | | | | | | | | | | | | | | | | | |
NC Municipal Power Agency Number 1 Catawba Electric Revenue | | | 4.750 | | | | 01/01/2030 | | | A2/A*/A@ | | | 290,000 | | | | 310,926 | |
NC Municipal Power Agency Number 1 Catawba Electric Revenue | | | 5.000 | | | | 01/01/2030 | | | A2/A*/A@ | | | 2,545,000 | | | | 2,782,398 | |
Raleigh NC Combined Enterprise System | | | 5.000 | | | | 03/01/2031 | | | Aa1/AAA*/AAA@ | | | 500,000 | | | | 555,090 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 3,648,414 | |
| GENERAL OBLIGATION BONDS | | | | | | | | | | | | | | | | | | |
| 2.64% of Net Assets | | | | | | | | | | | | | | | | | | |
Iredell County NC Community College | | | 5.000 | | | | 04/01/2026 | | | Aa2/AA*/AA+@ | | | 225,000 | | | | 256,784 | |
Iredell County NC Community College | | | 5.000 | | | | 04/01/2027 | | | Aa2/AA*/AA+@ | | | 325,000 | | | | 369,222 | |
Wake County NC Limited Obligation — Series 209 | | | 5.000 | | | | 06/01/2032 | | | Aa1/AA+*/AA+@ | | | 1,500,000 | | | | 1,701,270 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 2,327,276 | |
The accompanying footnotes are an integral part of the financial statements.
23
DUPREE MUTUAL FUNDS — NORTH CAROLINA TAX-FREE INCOME SERIES | |
SCHEDULE OF PORTFOLIO INVESTMENTS
North Carolina Municipal Bonds — 100% of Net Assets
June 30, 2012
| | | | | | | | | | | | | | | | | | |
| Bond Description | | Coupon | | | Maturity
Date | | | Rating# | | Par Value | | | Fair Value | |
| | | | | | | | | | | | | | | | | | |
| PREREFUNDED BONDS | | | | | | | | | | | | | | | | | | |
| 1.62% of Net Assets | | | | | | | | | | | | | | | | | | |
NC Eastern Municipal Power Agency Power System — Series A | | | 6.000 | % | | | 01/01/2026 | | | Aaa/A-*/A-@ | | $ | 275,000 | | | $ | 372,917 | |
Raleigh NC Combined Enterprise System | | | 5.000 | | | | 03/01/2031 | | | Aa1/AAA*/AAA@ | | | 980,000 | | | | 1,056,420 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 1,429,337 | |
| | | | | | | | | | | | | | | | | | |
Total Investments (cost $82,704,639)(See (a) below for further explanation) 99.22% of Net Assets | | | | | | | | | $ | 87,611,343 | |
| | | | | | | | | | | | | | | | | | |
| | * | | Standard and Poor’s Corporation |
| | ** | | When-Issued security or extended settlement — see footnote 1(D) |
| | ^ | | Security is segregated — see footnote 1(D) |
| | @ | | Fitch’s Investors Service |
| | | | All other ratings by Moody’s Investors Service, Inc. |
| | # | | Bond ratings are unaudited and not covered by Report of Independent Public Accounting Firm. |
| (a) | | Represents cost for financial reporting and federal income tax purposes and differs from fair value by net unrealized appreciation of securities as follows: |
| | | | | | |
| | | | | | |
| | Unrealized appreciation | | $ | 4,988,413 | |
| | Unrealized depreciation | | | (81,709 | ) |
| | | | | | |
| | Net unrealized appreciation | | $ | 4,906,704 | |
| | | | | | |
Other Information
The following is a summary of the inputs used, as of June 30, 2012, involving the Fund’s investments in securities carried at fair value. The inputs or methodology used for valuing securities may not be an indication of the risk associated with investing in those securities. For more information on valuation inputs, and their aggregation into the levels used in the table below, please refer to the Security Valuation section in the accompanying Notes to Financial Statements.
| | | | | | |
| | | Valuation Inputs | | Municipal Bonds | |
| | | | | | |
Level 1 | | Quoted Prices | | $ | — | |
Level 2 | | Other Significant Observable Inputs | | | 87,611,343 | |
Level 3 | | Significant Unobservable Inputs | | | — | |
| | | | | | |
| | | | $ | 87,611,343 | |
| | | | | | |
The accompanying footnotes are an integral part of the financial statements.
24
NORTH CAROLINA TAX-FREE INCOME SERIES
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2012
| | | | | | | | |
ASSETS: | | | | | | | | |
Investments in securities, at fair value (Cost: $82,704,639) | | | | | | $ | 87,611,343 | |
Cash | | | | | | | 1,188,367 | |
Receivable for fund shares sold | | | | | | | 231,000 | |
Interest receivable | | | | | | | 971,094 | |
Prepaid expenses | | | | | | | 164 | |
| | | | | | | | |
Total assets | | | | | | | 90,001,968 | |
LIABILITIES: | | | | | | | | |
Payable for: | | | | | | | | |
Investments purchased | | | 1,391,993 | | | | | |
Distributions to shareholders | | | 220,966 | | | | | |
Fund shares redeemed | | | 29,515 | | | | | |
Investment advisory fee | | | 37,351 | | | | | |
Transfer agent fee | | | 9,841 | | | | | |
Accrued expenses | | | 8,408 | | | | | |
| | | | | | | | |
Total liabilities | | | | | | | 1,698,074 | |
| | | | | | | | |
NET ASSETS: | | | | | | | | |
Capital | | | | | | | 83,262,100 | |
Accumulated net investment income | | | | | | | 3,405 | |
Net accumulated realized gain on investment transactions | | | | | | | 131,685 | |
Net unrealized appreciation in value of investments | | | | | | | 4,906,704 | |
| | | | | | | | |
Net assets at value | | | | | | $ | 88,303,894 | |
| | | | | | | | |
NET ASSET VALUE, offering price and redemption price per share ($88,303,894 -:- 7,617,700 shares outstanding; unlimited number of shares authorized; no par value) | | | | | | $ | 11.59 | |
| | | | | | | | |
STATEMENT OF OPERATIONS
For the year ended June 30, 2012
| | | | |
Net investment income: | | | | |
Interest income | | $ | 3,357,427 | |
| | | | |
Expenses: | | | | |
Investment advisory fee | | | 402,183 | |
Transfer agent fee | | | 106,057 | |
Custodian expense | | | 14,308 | |
Professional fees | | | 17,478 | |
Trustees fees | | | 11,102 | |
Other expenses | | | 22,292 | |
| | | | |
Total expenses | | | 573,420 | |
Custodian expense reduction | | | (321 | ) |
| | | | |
Net expenses | | | 573,099 | |
| | | | |
Net investment income | | | 2,784,328 | |
| | | | |
Realized and unrealized gain/(loss) on investments: | | | | |
Net realized gain | | | 270,575 | |
Net change in unrealized appreciation/depreciation | | | 4,314,029 | |
| | | | |
Net realized and unrealized gain on investments | | | 4,584,604 | |
| | | | |
Net increase in net assets resulting from operations | | $ | 7,368,932 | |
| | | | |
The accompanying notes are an integral part of the financial statements.
25
NORTH CAROLINA TAX-FREE INCOME SERIES
STATEMENTS OF CHANGES IN NET ASSETS
For the years ended June 30, 2012 and 2011
| | | | | | | | |
| | | 2012 | | | 2011 | |
Operations: | | | | | | | | |
Net investment income | | $ | 2,784,328 | | | $ | 2,813,638 | |
Net realized gain on investments | | | 270,575 | | | | 325,856 | |
Net change in unrealized appreciation/depreciation | | | 4,314,029 | | | | (1,125,078 | ) |
| | | | | | | | |
Net increase in net assets resulting from operations | | | 7,368,932 | | | | 2,014,416 | |
Distributions from net investment income | | | (2,780,923 | ) | | | (2,813,638 | ) |
Net fund share transactions (Note 4) | | | 8,404,077 | | | | (1,004,724 | ) |
| | | | | | | | |
Total increase/(decrease) | | | 12,992,086 | | | | (1,803,946 | ) |
Net assets: | | | | | | | | |
Beginning of year | | | 75,311,808 | | | | 77,115,754 | |
| | | | | | | | |
End of year | | $ | 88,303,894 | | | $ | 75,311,808 | |
| | | | | | | | |
Accumulated net investment income | | $ | 3,405 | | | $ | — | |
| | | | | | | | |
FINANCIAL HIGHLIGHTS
| | | | | | | | | | | | | | | | | | | | |
| Selected data for a share outstanding: | | For the years ended June 30, | |
| | | 2012 | | | 2011 | | | 2010 | | | 2009 | | | 2008 | |
Net asset value, beginning of year | | | $10.92 | | | | $11.01 | | | | $10.71 | | | | $10.62 | | | | $10.74 | |
| | | | | | | | | | | | | | | | | | | | |
Income from investment operations: | | | | | | | | | | | | | | | | | | | | |
Net investment income | | | 0.39 | | | | 0.40 | | | | 0.40 | | | | 0.41 | | | | 0.41 | |
Net gains/(losses) on securities, both realized and unrealized | | | 0.67 | | | | (0.09 | ) | | | 0.30 | | | | 0.09 | | | | (0.12 | )(b) |
| | | | | | | | | | | | | | | | | | | | |
Total from investment operations | | | 1.06 | | | | 0.31 | | | | 0.70 | | | | 0.50 | | | | 0.29 | |
Less distributions: | | | | | | | | | | | | | | | | | | | | |
Distributions from net investment income | | | (0.39 | ) | | | (0.40 | ) | | | (0.40 | ) | | | (0.41 | ) | | | (0.41 | ) |
| | | | | | | | | | | | | | | | | | | | |
Net asset value, end of year | | | $11.59 | | | | $10.92 | | | | $11.01 | | | | $10.71 | | | | $10.62 | |
| | | | | | | | | | | | | | | | | | | | |
Total return | | | 9.87% | | | | 2.90% | | | | 6.62% | | | | 4.83% | | | | 2.69% | |
Net assets, end of year (in thousands) | | | $88,304 | | | | $75,312 | | | | $77,116 | | | | $66,891 | | | | $65,300 | |
Ratio of net expenses to average net assets (a) | | | 0.71% | | | | 0.70% | | | | 0.72% | | | | 0.72% | | | | 0.71% | |
Ratio of net investment income to average net assets | | | 3.46% | | | | 3.69% | | | | 3.66% | | | | 3.89% | | | | 3.76% | |
Portfolio turnover | | | 5.94% | | | | 14.16% | | | | 5.92% | | | | 7.82% | | | | 11.03% | |
| (a) | | Percentages are after Custodian reduction for which no recovery will be sought. Percentages before Custodian reduction were: .71% for 2012; .70% for 2011; .72% for 2010; .72% for 2009; and .72% for 2008. |
| (b) | | Rounds to less than .01. |
The accompanying notes are an integral part of the financial statements.
26
DUPREE MUTUAL FUNDS — NORTH CAROLINA TAX-FREE SHORT-TO-MEDIUM SERIES
SCHEDULE OF PORTFOLIO INVESTMENTS
North Carolina Municipal Bonds — 100% of Net Assets
June 30, 2012
| | | | | | | | | | | | | | | | | | |
| Bond Description | | Coupon | | | Maturity
Date | | | Rating# | | Par Value | | | Fair Value | |
| | | | | | | | | | | | | | | | | | |
| INSURED MUNICIPAL BONDS | | | | | | | | | | | | | | | | | | |
| 52.93% of Net Assets | | | | | | | | | | | | | | | | | | |
Appalachian State University NC Revenue Refunding | | | 5.000 | % | | | 07/15/2018 | | | Aa2 | | $ | 40,000 | | | $ | 44,429 | |
Asheville NC Water System Revenue Refunding | | | 5.000 | | | | 08/01/2017 | | | Aa2/AA* | | | 140,000 | | | | 158,407 | |
Brunswick County NC Community College — Series B | | | 4.250 | | | | 05/01/2022 | | | Aa2/AA*/AA@ | | | 125,000 | | | | 138,028 | |
Buncombe County NC Certificates of Participation | | | 4.000 | | | | 04/01/2016 | | | Aa2/AA+* | | | 125,000 | | | | 139,669 | |
Burke County NC Certificates of Participation | | | 5.000 | | | | 04/01/2020 | | | A1/A* | | | 180,000 | | | | 200,542 | |
Burke County NC Certificates of Participation | | | 4.250 | | | | 04/01/2016 | | | A1/A* | | | 50,000 | | | | 55,021 | |
Cabarrus County NC Certificates of Participation | | | 5.625 | | | | 02/01/2016 | | | Aa2/AA*/AA@ | | | 125,000 | | | | 146,101 | |
Cabarrus County NC Certificates of Participation | | | 4.250 | | | | 06/01/2017 | | | Aa2/AA*/AA@ | | | 175,000 | | | | 200,706 | |
Catawba County NC Certificates of Participation | | | 5.250 | | | | 06/01/2019 | | | Aa2/BBB* | | | 200,000 | | | | 223,128 | |
Craven County NC Certificates of Participation | | | 4.375 | | | | 06/01/2016 | | | Aa3/AA-* | | | 115,000 | | | | 129,276 | |
Dare County NC Certificates of Participation | | | 5.250 | | | | 06/01/2014 | | | Aa3/AA-*/AA-@ | | | 150,000 | | | | 162,917 | |
Davie County NC Community College | | | 4.000 | | | | 06/01/2013 | | | Aa3/A+* | | | 250,000 | | | | 257,238 | |
Edgecombe County NC Schools | | | 4.000 | | | | 02/01/2015 | | | A1/A+* | | | 235,000 | | | | 253,786 | |
Harnett County NC Certificates of Participation | | | 5.000 | | | | 12/01/2015 | | | Aa3/AA-* | | | 125,000 | | | | 142,005 | |
Harnett County NC Certificates of Participation | | | 5.000 | | | | 12/01/2021 | | | Aa3/AA-* | | | 200,000 | | | | 227,374 | |
Harnett County Certificates of Participation | | | 3.500 | | | | 06/01/2016 | | | Aa3/AA-* | | | 250,000 | | | | 273,775 | |
Haywood NC Certificates of Participation Refunding | | | 5.000 | | | | 10/01/2016 | | | A1/A* | | | 635,000 | | | | 673,202 | |
Henderson County NC Certificates of Participation | | | 5.250 | | | | 05/01/2020 | | | Aa3/AA-*/AA-@ | | | 300,000 | | | | 331,938 | |
Henderson County NC Certificates of Participation | | | 5.000 | | | | 06/01/2014 | | | Aa3/AA-*/AA-@ | | | 50,000 | | | | 53,798 | |
Iredell County NC Certificates of Participation School Project | | | 5.000 | | | | 06/01/2018 | | | Aa3/AA-* | | | 425,000 | | | | 484,581 | |
Johnston NC Memorial Hospital Authority | | | 4.000 | | | | 10/01/2012 | | | Aa3/AA-* | | | 200,000 | | | | 201,546 | |
Johnston NC Memorial Hospital Authority | | | 4.000 | | | | 04/01/2015 | | | Aa3/AA-* | | | 100,000 | | | | 106,777 | |
Lee County NC Certificates of Participation | | | 5.000 | | | | 04/01/2018 | | | Aa3/AA-* | | | 225,000 | | | | 260,561 | |
Lincoln County NC Certificates of Participation | | | 5.000 | | | | 06/01/2016 | | | Aa3/AA-*/AA-@ | | | 200,000 | | | | 229,694 | |
Lincolnton NC Enterprise System Revenue | | | 5.000 | | | | 05/01/2016 | | | NR | | | 385,000 | | | | 412,520 | |
Monroe NC Certificates of Participation | | | 4.000 | | | | 03/01/2019 | | | Aa3/AA-* | | | 100,000 | | | | 112,299 | |
Nash County NC Limited Obligation | | | 3.000 | | | | 10/01/2015 | | | Aa3/AA-* | | | 400,000 | | | | 426,088 | |
Nash County NC Limited Obligation | | | 5.000 | | | | 10/01/2018 | | | Aa3/AA-* | | | 150,000 | | | | 181,431 | |
New Hanover County NC Certificates of Participation | | | 5.000 | | | | 03/01/2017 | | | Aa1/AA* | | | 250,000 | | | | 259,593 | |
NC Medical Care Community Hospital Rowan Medical | | | 5.250 | | | | 09/01/2016 | | | Aa3/AA-* | | | 1,100,000 | | | | 1,190,024 | |
NC Eastern Municipal Power Agency | | | 5.250 | | | | 01/01/2019 | | | Aa3/AA-*/A-@ | | | 550,000 | | | | 648,714 | |
NC Eastern Municipal Power Agency System Revenue | | | 5.000 | | | | 01/01/2020 | | | A-*/A-@ | | | 250,000 | | | | 281,323 | |
NC Municipal Power Agency Number 1 Catawba Electric Revenue | | | 5.250 | | | | 01/01/2019 | | | A2/A*/A@ | | | 100,000 | | | | 102,174 | |
NC Infrastructure Certificates of Participation | | | 5.000 | | | | 06/01/2018 | | | Aa1/AA+*/AA+@ | | | 100,000 | | | | 114,972 | |
NC Infrastructure Finance Certificates of Participation | | | 5.000 | | | | 02/01/2017 | | | Aa1/AA+*/AA+@ | | | 150,000 | | | | 176,918 | |
NC Infrastructure Finance Corporation Certificates of Participation | | | 5.000 | | | | 02/01/2020 | | | Aa1/AA+*/AA+@ | | | 425,000 | | | | 487,258 | |
NC Medical Care — Caromont Health | | | 3.250 | | | | 02/15/2018 | | | Aa3/AA-* | | | 370,000 | | | | 394,698 | |
Onslow County NC Certificates of Participation | | | 5.000 | | | | 06/01/2018 | | | Aa3/A+* | | | 140,000 | | | | 158,651 | |
Pitt County NC Certificates of Participation School Facility | | | 4.000 | | | | 04/01/2015 | | | Aa3/AA-*/AA@ | | | 100,000 | | | | 107,990 | |
Randolph County NC Certificates of Participation | | | 5.000 | | | | 06/01/2016 | | | Aa3/AA-* | | | 170,000 | | | | 186,591 | |
Randolph County NC Certificates of Participation | | | 5.000 | | | | 02/01/2021 | | | Aa3 | | | 100,000 | | | | 111,922 | |
Rutherford County NC Certificates of Participation | | | 5.000 | | | | 12/01/2017 | | | Aa3/AA-* | | | 105,000 | | | | 124,790 | |
Rutherford County NC Certificates of Participation | | | 5.000 | | | | 12/01/2018 | | | Aa3/AA-* | | | 205,000 | | | | 241,641 | |
Rutherford NC Certificates of Participation | | | 4.000 | | | | 12/01/2019 | | | Aa3/AA-* | | | 200,000 | | | | 221,865 | |
Sampson County NC Certificates of Participation | | | 5.000 | | | | 06/01/2014 | | | Aa3/AA-* | | | 50,000 | | | | 54,138 | |
Sampson County NC Certificates of Participation | | | 5.000 | | | | 06/01/2020 | | | Aa3/AA-* | | | 400,000 | | | | 455,775 | |
Sampson Area Development Corporation NC Refunding | | | 4.000 | | | | 06/01/2015 | | | AA-* | | | 150,000 | | | | 163,151 | |
University of NC — Series A | | | 4.250 | | | | 10/01/2021 | | | Aa3 | | | 100,000 | | | | 111,791 | |
University NC Wilmington Certificates of Participation | | | 4.000 | | | | 06/01/2017 | | | Aa3/AA-* | | | 100,000 | | | | 112,426 | |
University of NC at Wilmington Certificates of Participation | | | 5.250 | | | | 06/01/2021 | | | A-* | | | 100,000 | | | | 108,083 | |
University NC Wilmington Certificates of Participation | | | 5.000 | | | | 06/01/2014 | | | A-* | | | 40,000 | | | | 43,110 | |
University NC Wilmington Certificates of Participation | | | 4.250 | | | | 06/01/2017 | | | A-* | | | 300,000 | | | | 329,262 | |
University NC System Pool Revenue Asheville Wilmington | | | 5.000 | | | | 10/01/2016 | | | Aa3/AA-* | | | 230,000 | | | | 267,502 | |
Wilson NC Certificates of Participation | | | 5.000 | | | | 05/01/2016 | | | Aa3/AA-* | | | 200,000 | | | | 229,482 | |
Wilson NC Certificates of Participation | | | 5.000 | | | | 05/01/2018 | | | Aa3/AA-* | | | 60,000 | | | | 69,643 | |
Wilson NC Certificates of Participation | | | 5.000 | | | | 05/01/2022 | | | Aa3/AA-* | | | 100,000 | | | | 112,196 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 13,092,520 | |
The accompanying footnotes are an integral part of the financial statements.
27
DUPREE MUTUAL FUNDS — NORTH CAROLINA TAX-FREE SHORT-TO-MEDIUM SERIES
SCHEDULE OF PORTFOLIO INVESTMENTS
North Carolina Municipal Bonds — 100% of Net Assets
June 30, 2012
| | | | | | | | | | | | | | | | | | |
| Bond Description | | Coupon | | | Maturity
Date | | | Rating# | | Par Value | | | Fair Value | |
| | | | | | | | | | | | | | | | | | |
| CERTIFICATES OF PARTICIPATION BONDS (UNINSURED) | | | | | | | | | | | | | | | | | | |
| 18.81% of Net Assets | | | | | | | | | | | | | | | | | | |
Buncombe County NC Certificates of Participation | | | 5.000 | % | | | 04/01/2018 | | | Aa2/AA+* | | $ | 250,000 | | | $ | 276,028 | |
Cabarrus County NC Certificates of Participation | | | 5.000 | | | | 06/01/2019 | | | Aa2/AA*/AA@ | | | 420,000 | | | | 499,850 | |
Cabarrus County NC Certificates of Participation | | | 4.000 | | | | 01/01/2015 | | | Aa2/AA*/AA@ | | | 225,000 | | | | 242,881 | |
Cabarrus County NC Certificates of Participation | | | 5.000 | | | | 01/01/2017 | | | Aa2/AA*/AA@ | | | 150,000 | | | | 175,142 | |
Cabarrus County NC Certificates of Participation | | | 5.000 | | | | 01/01/2019 | | | Aa2/AA*/AA@ | | | 100,000 | | | | 120,242 | |
Chapel Hill NC Certificates of Participation Operations Center | | | 5.250 | | | | 06/01/2019 | | | Aa1/AA+* | | | 260,000 | | | | 290,144 | |
Charlotte NC Certificates of Participation Refunding | | | 5.000 | | | | 12/01/2021 | | | Aa2/AA+*/AA@ | | | 270,000 | | | | 295,345 | |
Charlotte NC Certificates of Participation | | | 4.375 | | | | 12/01/2014 | | | Aa2/AA+* | | | 50,000 | | | | 50,556 | |
Charlotte NC Certificates of Participation Transit Projects | | | 4.000 | | | | 06/01/2016 | | | Aa2/AA+*/AA+@ | | | 100,000 | | | | 109,041 | |
Cumberland County NC Certificates of Participation | | | 5.000 | | | | 12/01/2015 | | | Aa2/AA* | | | 75,000 | | | | 85,475 | |
Cumberland County NC Certificates of Participation | | | 5.000 | | | | 12/01/2017 | | | Aa2/AA* | | | 350,000 | | | | 417,785 | |
Durham County NC Certificates of Participation | | | 5.000 | | | | 06/01/2021 | | | Aa1/AA+* | | | 240,000 | | | | 283,601 | |
Forsyth County NC Certificates of Participation | | | 5.000 | | | | 10/01/2019 | | | Aa1/AA+*/AA+@ | | | 600,000 | | | | 682,242 | |
Montgomery County NC Certificates of Participation | | | 5.000 | | | | 02/01/2017 | | | A-* | | | 125,000 | | | | 143,729 | |
Mooreville NC Certificates of Participation | | | 4.125 | | | | 09/01/2018 | | | AA-* | | | 250,000 | | | | 279,233 | |
NC Infrastructure Finance Corporation Certificates of Participation | | | 5.000 | | | | 02/01/2016 | | | Aa1/AA+*/AA+@ | | | 200,000 | | | | 222,680 | |
NC State Capital Improvement Obligation | | | 4.000 | | | | 05/01/2020 | | | Aa1/AA+*/AA+@ | | | 120,000 | | | | 135,562 | |
Randolph County NC Certificates of Participation | | | 5.000 | | | | 02/01/2018 | | | Aa3 | | | 200,000 | | | | 228,345 | |
Wilmington NC Certificates of Participation — Series A | | | 4.200 | | | | 06/01/2019 | | | Aa2/AA*/AA@ | | | 100,000 | | | | 114,451 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 4,652,332 | |
| MUNICIPAL UTILITY REVENUE BONDS | | | | | | | | | | | | | | | | | | |
| 9.45% of Net Assets | | | | | | | | | | | | | | | | | | |
Moore County NC | | | 5.000 | | | | 06/01/2017 | | | Aa3/AA-* | | | 685,000 | | | | 803,669 | |
NC Eastern Municipal Power Agency — Series D | | | 4.000 | | | | 01/01/2016 | | | Baa1/A-*/A-@ | | | 95,000 | | | | 104,552 | |
NC Eastern Municipal Power Agency | | | 5.375 | | | | 01/01/2017 | | | Baa1/A-* | | | 200,000 | | | | 204,296 | |
NC Eastern Municipal Power Agency — Series B | | | 3.250 | | | | 01/01/2015 | | | Baa1/A-*/A-@ | | | 250,000 | | | | 264,010 | |
NC State Eastern Municipal Power System Revenue | | | 6.500 | | | | 01/01/2018 | | | Aa3/AA-* | | | 100,000 | | | | 125,245 | |
NC Eastern Municipal Power Agency — Series A | | | 5.000 | | | | 01/01/2016 | | | A-*/A-@ | | | 50,000 | | | | 56,669 | |
NC Municipal Power Agency Number 1 Catawba Electric | | | 5.250 | | | | 01/01/2017 | | | A2/A*/A@ | | | 200,000 | | | | 235,326 | |
NC Municipal Power Number 1 Catawba Electric | | | 4.000 | | | | 01/01/2016 | | | A2/A*/A@ | | | 100,000 | | | | 110,710 | |
NC State Municipal Power Agency Number 1 Catawba Electric | | | 5.000 | | | | 01/01/2021 | | | A2/A*/A@ | | | 250,000 | | | | 290,898 | |
NC Municipal Power Agency Number 1 Catawba Electric | | | 5.000 | | | | 01/01/2016 | | | A2/A*/A@ | | | 125,000 | | | | 142,693 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 2,338,068 | |
| PREREFUNDED BONDS | | | | | | | | | | | | | | | | | | |
| 5.45% of Net Assets | | | | | | | | | | | | | | | | | | |
Appalachian State University NC Revenue Refunding | | | 5.000 | | | | 07/15/2018 | | | Aa2 | | | 35,000 | | | | 39,752 | |
Catawba County NC Certificates of Participation Public Schools | | | 5.250 | | | | 06/01/2016 | | | Aa2 | | | 125,000 | | | | 136,343 | |
Catawba County NC Certificates of Participation Public Schools | | | 5.250 | | | | 06/01/2018 | | | Aa2 | | | 125,000 | | | | 136,343 | |
High Point NC Combined Enterprise System Revenue | | | 5.000 | | | | 11/01/2018 | | | Aa2/AAA*/AA+@ | | | 145,000 | | | | 160,799 | |
Lee County NC Certificates of Participation | | | 5.000 | | | | 04/01/2016 | | | Aa3/AA-* | | | 215,000 | | | | 232,520 | |
NC Infrastructure Finance Corporation Certificates of Participation | | | 5.000 | | | | 02/01/2019 | | | Aa1/AA+*/AA+@ | | | 85,000 | | | | 91,101 | |
NC Medical Care Community Healthcare Facilities | | | 4.000 | | | | 10/01/2018 | | | Aa3/AA-*/AA-@ | | | 240,000 | | | | 259,154 | |
Union County NC Certificates of Participation | | | 5.000 | | | | 06/01/2020 | | | Aa2/AA-* | | | 250,000 | | | | 292,153 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 1,348,165 | |
| HOSPITAL AND HEALTHCARE REVENUE BONDS | | | | | | | | | | | | | | | | | | |
| 3.60% of Net Assets | | | | | | | | | | | | | | | | | | |
Charlotte-Mecklenburg NC Hospital Authority Healthcare | | | 5.000 | | | | 01/15/2018 | | | Aa3/AA-* | | | 200,000 | | | | 229,216 | |
Charlotte-Mecklenburg Hospital | | | 5.000 | | | | 01/15/2019 | | | Aa3/AA-* | | | 200,000 | | | | 226,590 | |
Charlotte-Mecklenburg Hospital | | | 4.375 | | | | 01/15/2019 | | | Aa3/AA-* | | | 150,000 | | | | 169,196 | |
NC Medical Care Mission Health Combined Group | | | 4.000 | | | | 10/01/2014 | | | Aa3/AA*/AA@ | | | 100,000 | | | | 107,044 | |
NC Medical Care Duke University Health Systems | | | 3.000 | | | | 06/01/2019 | | | Aa2/AA*/AA@ | | | 150,000 | | | | 159,450 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 891,496 | |
| PUBLIC FACILITIES REVENUE BONDS | | | | | | | | | | | | | | | | | | |
| 3.03% of Net Assets | | | | | | | | | | | | | | | | | | |
Charlotte NC Airport — Charlotte Douglas International | | | 4.125 | | | | 07/01/2016 | | | Aa3/A+*/A+@ | | | 100,000 | | | | 111,530 | |
Charlotte NC Airport Revenue Refunding | | | 5.000 | | | | 07/01/2015 | | | Aa3/A+*/A+@ | | | 350,000 | | | | 390,905 | |
The accompanying footnotes are an integral part of the financial statements.
28
DUPREE MUTUAL FUNDS — NORTH CAROLINA TAX-FREE SHORT-TO-MEDIUM SERIES
SCHEDULE OF PORTFOLIO INVESTMENTS
North Carolina Municipal Bonds — 100% of Net Assets
June 30, 2012
| | | | | | | | | | | | | | | | | | |
| Bond Description | | Coupon | | | Maturity
Date | | | Rating# | | Par Value | | | Fair Value | |
| | | | | | | | | | | | | | | | | | |
Mecklenburg County NC Certificates of Participation | | | 5.000 | % | | | 02/01/2017 | | | Aa1/AA+*/AA+@ | | $ | 105,000 | | | $ | 123,068 | |
Raleigh Durham NC Airport Authority — Series B | | | 5.000 | | | | 11/01/2017 | | | Aa3/AA-@ | | | 105,000 | | | | 124,973 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 750,476 | |
| UNIVERSITY CONSOLIDATED EDUCATION AND BUILDING REVENUE BONDS | | | | | | | | | | | |
| 2.79% of Net Assets | | | | | | | | | | | | | | | | | | |
University NC System Pool Revenue | | | 5.000 | | | | 10/01/2016 | | | Aa2 | | | 250,000 | | | | 293,610 | |
University NC System Pool Revenue | | | 5.000 | | | | 10/01/2015 | | | Aa3 | | | 350,000 | | | | 395,328 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 688,938 | |
| LEASE REVENUE BONDS | | | | | | | | | | | | | | | | | | |
| 1.04% of Net Assets | | | | | | | | | | | | | | | | | | |
NC Municipal Power Agency Number 1 Catawba Electric | | | 5.250 | | | | 01/01/2018 | | | A2/A*/A@ | | | 125,000 | | | | 149,681 | |
Union County NC Limited Obligation | | | 3.000 | | | | 12/01/2018 | | | Aa2/AA-*/AA@ | | | 100,000 | | | | 108,447 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 258,128 | |
| STATE AND LOCAL MORTGAGE REVENUE BONDS | | | | | | | | | | | | | | | | | | |
| 1.00% of Net Assets | | | | | | | | | | | | | | | | | | |
NC Housing Finance Agency — Series 31-B | | | 3.850 | | | | 01/01/2017 | | | Aa2/AA* | | | 140,000 | | | | 148,128 | |
NC Housing Financial Agency Home Ownership — Series 16B | | | 4.125 | | | | 07/01/2012 | | | Aa2/AA* | | | 100,000 | | | | 100,015 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 248,143 | |
| GENERAL OBLIGATION BONDS | | | | | | | | | | | | | | | | | | |
| .53% of Net Assets | | | | | | | | | | | | | | | | | | |
Cabarrus County NC Public Improvement | | | 5.000 | | | | 03/01/2018 | | | Aa1/AA+*/AA+@ | | | 100,000 | | | | 114,424 | |
NC State Public Improvement — Series A | | | 5.000 | | | | 03/01/2019 | | | Aaa/AAA* | | | 15,000 | | | | 16,654 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 131,078 | |
| | | | | | | | | | | | | | | | | | |
Total Investments (cost $23,241,290) (See (a) below for further explanation) 98.63% of Net Assets | | | | | | | | | $ | 24,399,344 | |
| | | | | | | | | | | | | | | | | | |
| | * | | Standard and Poor’s Corporation |
| | @ | | Fitch’s Investors Service |
| | | | All other ratings by Moody’s Investors Service, Inc. |
| | # | | Bond ratings are unaudited and not covered by Report of Independent Registered Public Accounting Firm. |
| (a) | | Represents cost for financial reporting and federal income tax purposes and differs from fair value by net unrealized appreciation of securities as follows: |
| | | | | | |
| | | | | | |
| | Unrealized appreciation | | $ | 1,159,932 | |
| | Unrealized depreciation | | | (1,878 | ) |
| | | | | | |
| | Net unrealized appreciation | | $ | 1,158,054 | |
| | | | | | |
Other Information
The following is a summary of the inputs used, as of June 30, 2012, involving the Fund’s investments in securities carried at fair value. The inputs or methodology used for valuing securities may not be an indication of the risk associated with investing in those securities. For more information on valuation inputs, and their aggregation into the levels used in the the table below, please refer to the Security Valuation section in the accompanying Notes to Financial Statements.
| | | | | | |
| | | Valuation Inputs | | Municipal Bonds | |
| | | | | | |
Level 1 | | Quoted Prices | | $ | — | |
Level 2 | | Other Significant Observable Inputs | | | 24,399,344 | |
Level 3 | | Significant Unobservable Inputs | | | — | |
| | | | | | |
| | | | $ | 24,399,344 | |
| | | | | | |
The accompanying footnotes are an integral part of the financial statements.
29
NORTH CAROLINA TAX-FREE SHORT-TO-MEDIUM SERIES
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2012
| | | | | | | | |
ASSETS: | | | | | | | | |
Investments in securities, at fair value (Cost: $23,241,290) | | | | | | $ | 24,399,344 | |
Cash | | | | | | | 98,421 | |
Interest receivable | | | | | | | 267,073 | |
| | | | | | | | |
Total assets | | | | | | | 24,764,838 | |
LIABILITIES: | | | | | | | | |
Payable for: | | | | | | | | |
Distributions to shareholders | | | 8,731 | | | | | |
Fund shares redeemed | | | 3,164 | | | | | |
Investment advisory fee | | | 10,041 | | | | | |
Transfer agent fee | | | 3,035 | | | | | |
Trustees fees | | | 765 | | | | | |
Accrued expenses | | | 5,569 | | | | | |
| | | | | | | | |
Total liabilities | | | | | | | 31,305 | |
| | | | | | | | |
NET ASSETS: | | | | | | | | |
Capital | | | | | | | 23,544,103 | |
Net accumulated realized gain on investment transactions | | | | | | | 31,376 | |
Net unrealized appreciation in value of investments | | | | | | | 1,158,054 | |
| | | | | | | | |
Net assets at value | | | | | | $ | 24,733,533 | |
| | | | | | | | |
NET ASSET VALUE, offering price and redemption price per share ($24,733,533 -:- 2,202,550 shares outstanding; unlimited number of shares authorized; no par value) | | | | | | $ | 11.23 | |
| | | | | | | | |
STATEMENT OF OPERATIONS
For the year ended June 30, 2012
| | | | |
Net investment income: | | | | |
Interest income | | $ | 674,943 | |
| | | | |
Expenses: | | | | |
Investment advisory fee | | | 115,189 | |
Transfer agent fee | | | 34,989 | |
Custodian expense | | | 7,038 | |
Professional fees | | | 11,525 | |
Trustees fees | | | 3,188 | |
Other expenses | | | 7,977 | |
| | | | |
Total expenses | | | 179,906 | |
Custodian expense reduction | | | (91 | ) |
| | | | |
Net expenses | | | 179,815 | |
| | | | |
Net investment income | | | 495,128 | |
| | | | |
Realized and unrealized gain on investments: | | | | |
Net realized gain | | | 78,217 | |
Net change in unrealized appreciation/depreciation | | | 507,434 | |
| | | | |
Net realized and unrealized gain on investments | | | 585,651 | |
| | | | |
Net increase in net assets resulting from operations | | $ | 1,080,779 | |
| | | | |
The accompanying notes are an integral part of the financial statements.
30
NORTH CAROLINA TAX-FREE SHORT-TO-MEDIUM SERIES
STATEMENTS OF CHANGES IN NET ASSETS
For the years ended June 30, 2012 and 2011
| | | | | | | | |
| | | 2012 | | | 2011 | |
Operations: | | | | | | | | |
Net investment income | | $ | 495,128 | | | $ | 457,012 | |
Net realized gain on investments | | | 78,217 | | | | 32,681 | |
Net change in unrealized appreciation/depreciation | | | 507,434 | | | | 219,520 | |
| | | | | | | | |
Net increase in net assets resulting from operations | | | 1,080,779 | | | | 709,213 | |
Distributions from net investment income | | | (495,128 | ) | | | (457,012 | ) |
Net fund share transactions (Note 4) | | | 2,068,543 | | | | 5,876,130 | |
| | | | | | | | |
Total increase | | | 2,654,194 | | | | 6,128,331 | |
Net assets: | | | | | | | | |
Beginning of year | | | 22,079,339 | | | | 15,951,008 | |
| | | | | | | | |
End of year | | $ | 24,733,533 | | | $ | 22,079,339 | |
| | | | | | | | |
FINANCIAL HIGHLIGHTS
| | | | | | | | | | | | | | | | | | | | |
| Selected data for a share outstanding: | | For the years ended June 30, | |
| | | 2012 | | | 2011 | | | 2010 | | | 2009 | | | 2008 | |
Net asset value, beginning of year | | | $10.93 | | | | $10.78 | | | | $10.57 | | | | $10.37 | | | | $10.30 | |
| | | | | | | | | | | | | | | | | | | | |
Income from investment operations: | | | | | | | | | | | | | | | | | | | | |
Net investment income | | | 0.24 | | | | 0.26 | | | | 0.29 | | | | 0.32 | | | | 0.32 | |
Net gains/(losses) on securities, both realized and unrealized | | | 0.30 | | | | 0.15 | | | | 0.21 | | | | 0.20 | | | | 0.07 | |
| | | | | | | | | | | | | | | | | | | | |
Total from investment operations | | | 0.54 | | | | 0.41 | | | | 0.50 | | | | 0.52 | | | | 0.39 | |
Less distributions: | | | | | | | | | | | | | | | | | | | | |
Distributions from capital gains | | | — | | | | — | | | | — | | | | — | | | | — | (b) |
Distributions from net investment income | | | (0.24 | ) | | | (0.26 | ) | | | (0.29 | ) | | | (0.32 | ) | | | (0.32 | ) |
| | | | | | | | | | | | | | | | | | | | |
Net asset value, end of year | | | $11.23 | | | | $10.93 | | | | $10.78 | | | | $10.57 | | | | $10.37 | |
| | | | | | | | | | | | | | | | | | | | |
Total return | | | 4.98% | | | | 3.86% | | | | 4.77% | | | | 5.07% | | | | 3.78% | |
Net assets, end of year (in thousands) | | | $24,734 | | | | $22,079 | | | | $15,951 | | | | $11,662 | | | | $11,134 | |
Ratio of net expenses to average net assets (a) | | | 0.78% | | | | 0.77% | | | | 0.82% | | | | 0.81% | | | | 0.82% | |
Ratio of net investment income to average net assets | | | 2.15% | | | | 2.41% | | | | 2.69% | | | | 3.04% | | | | 3.03% | |
Portfolio turnover | | | 12.31% | | | | 5.15% | | | | 17.94% | | | | 10.14% | | | | 23.91% | |
| (a) | | Percentages are after expenses waived by Adviser and Custodian reduction. No recovery of these waivers and reductions will be sought. Expenses waived by Adviser and Custodian reduction were: 0% and 0% for 2012; 0% and 0% for 2011; 0% and 0% for 2010; .02% and .03% for 2009; and 0% and .04% for 2008, respectively. |
| (b) | | Rounds to less than $0.01. |
The accompanying notes are an integral part of the financial statements.
31
DUPREE MUTUAL FUNDS — TENNESSEE TAX-FREE INCOME SERIES | |
SCHEDULE OF PORTFOLIO INVESTMENTS
Tennessee Municipal Bonds — 100% of Net Assets
June 30, 2012
| | | | | | | | | | | | | | | | | | |
| Bond Description | | Coupon | | | Maturity
Date | | | Rating# | | Par Value | | | Fair Value | |
| | | | | | | | | | | | | | | | | | |
| INSURED MUNICIPAL BONDS | | | | | | | | | | | | | | | | | | |
| 45.03% of Net Assets | | | | | | | | | | | | | | | | | | |
Blount County TN Public Building Authority Local Government | | | 5.000 | % | | | 06/01/2025 | | | Aa2/AA-* | | $ | 100,000 | | | $ | 114,499 | |
Blount County TN Public Building Authority Local Government | | | 5.000 | | | | 06/01/2027 | | | Aa2/AA-* | | | 1,500,000 | | | | 1,692,210 | |
Blount County TN Public Building Authority Local Government | | | 4.750 | | | | 06/01/2031 | | | Aa2/AA-* | | | 750,000 | | | | 819,705 | |
Blount County TN Public Building Authority General Obligation | | | 5.250 | | | | 06/01/2019 | | | NR | | | 250,000 | | | | 261,283 | |
Blount County TN Building Authority Local Government Public | | | 5.000 | | | | 06/01/2032 | | | Aa3 | | | 750,000 | | | | 800,438 | |
Chattanooga TN Industrial Development Board Lease Rent Revenue | | | 5.000 | | | | 10/01/2027 | | | Aa3/AA*/AA@ | | | 1,000,000 | | | | 1,093,470 | |
Clarksville TN Electric System Revenue | | | 5.000 | | | | 09/01/2032 | | | Aa2 | | | 1,250,000 | | | | 1,352,688 | |
Cleveland TN General Obligation — Series A | | | 5.000 | | | | 06/01/2027 | | | Aa3/A+* | | | 680,000 | | | | 734,924 | |
Columbia TN Refunded — Sewer System | | | 5.000 | | | | 12/01/2024 | | | Aa2 | | | 1,235,000 | | | | 1,338,592 | |
Columbia TN Broadband Network Revenue & Tax | | | 5.000 | | | | 03/01/2025 | | | Aa2 | | | 1,000,000 | | | | 1,065,800 | |
Franklin County TN Health & Educational Facilities Board | | | 5.000 | | | | 09/01/2025 | | | A+* | | | 1,000,000 | | | | 1,069,120 | |
Gallatin TN Water & Sewer Revenue | | | 5.000 | | | | 01/01/2028 | | | Aa3 | | | 2,540,000 | | | | 2,827,376 | |
Giles County TN | | | 4.500 | | | | 02/01/2018 | | | Aa3 | | | 1,000,000 | | | | 1,041,100 | |
Greene County TN General Obligation — Series B | | | 5.000 | | | | 06/01/2024 | | | A1 | | | 505,000 | | | | 544,037 | |
Hallsdale-Powell Utility District Knox County TN Water and Sewer | | | 5.000 | | | | 04/01/2026 | | | AA* | | | 1,000,000 | | | | 1,089,830 | |
Hallsdale-Powell Utility District Knox County TN Water and Sewer | | | 5.000 | | | | 04/01/2031 | | | AA* | | | 740,000 | | | | 794,568 | |
Harpeth Valley Utilities TN Davidson and Williamson Counties | | | 5.000 | | | | 09/01/2029 | | | Aa3 | | | 1,410,000 | | | | 1,502,538 | |
Harpeth Valley Utilities TN Davidson and Williamson Counties | | | 5.000 | | | | 09/01/2032 | | | Aa3 | | | 1,420,000 | | | | 1,528,957 | |
Jackson TN Energy Authority Gas System Revenue | | | 5.000 | | | | 10/01/2028 | | | Aa2 | | | 1,000,000 | | | | 1,075,850 | |
Knox County TN Health Educational & Housing Facilities Ft. Sanders | | | 6.250 | | | | 01/01/2013 | | | Baa2/BBB* | | | 10,000 | | | | 10,263 | |
Knox County TN Health Educational & Housing — Covenant Health | | | 5.000 | | | | 01/01/2022 | | | Aa3/AA-*/AA@ | | | 450,000 | | | | 454,118 | |
Knoxville TN Waste Water System Revenue Improvement — Series A | | | 5.000 | | | | 04/01/2037 | | | Aa2/AA+* | | | 370,000 | | | | 398,978 | |
Manchester TN Refunding General Obligation | | | 5.000 | | | | 06/01/2038 | | | Aa3/AA-* | | | 100,000 | | | | 112,804 | |
Marion County TN Schools | | | 5.000 | | | | 06/01/2025 | | | A1 | | | 1,050,000 | | | | 1,133,192 | |
Metro Nashville & Davidson County TN Multi-Family | | | 4.600 | | | | 11/01/2026 | | | NR | | | 810,000 | | | | 817,687 | |
Metro Government Nashville & Davidson County TN Sports Authority | | | 5.000 | | | | 07/01/2021 | | | Aa2/AA-* | | | 1,000,000 | | | | 1,082,350 | |
Metropolitan Government Nashville and Davidson County TN | | | 5.000 | | | | 05/15/2027 | | | Aa1/AA* | | | 1,400,000 | | | | 1,559,054 | |
Metropolitan Government Nashville and Davidson County TN | | | 5.000 | | | | 05/15/2028 | | | Aa1/AA* | | | 240,000 | | | | 267,970 | |
Metro Nashville & Davidson County TN General Obligation | | | 5.000 | | | | 01/01/2023 | | | Aa1/AA* | | | 560,000 | | | | 607,152 | |
Metro Nashville & Davidson County TN General Obligation | | | 5.000 | | | | 01/01/2024 | | | Aa1/AA* | | | 565,000 | | | | 610,833 | |
Montgomery County TN General Obligation | | | 4.750 | | | | 05/01/2020 | | | Aa2/AA+* | | | 1,000,000 | | | | 1,085,460 | |
Oak Ridge TN Industrial Development Board Refunding Revenue | | | 5.250 | | | | 08/20/2018 | | | Aaa | | | 255,000 | | | | 255,051 | |
Overton County TN Refunding — Schools General Obligation | | | 5.000 | | | | 04/01/2018 | | | Baa2 | | | 500,000 | | | | 540,670 | |
Pigeon Forge TN Refunding — Series A | | | 4.900 | | | | 06/01/2028 | | | Aa3/AA* | | | 1,000,000 | | | | 1,101,800 | |
Rutherford County TN Construction Utility District Waterworks | | | 5.000 | | | | 02/01/2031 | | | Aa2/AAA* | | | 1,435,000 | | | | 1,513,896 | |
Shelby County TN Health Educational & Housing Facilities | | | 5.250 | | | | 09/01/2027 | | | Aa3/AA-* | | | 1,000,000 | | | | 1,088,200 | |
Smith County TN General Obligation | | | 5.000 | | | | 04/01/2021 | | | NR | | | 720,000 | | | | 785,520 | |
South Blount County TN Utility District Waterworks Revenue | | | 5.000 | | | | 12/01/2028 | | | Aa3/AA-* | | | 1,125,000 | | | | 1,274,490 | |
TN State School Board Authority Refunding Higher Education | | | 5.000 | | | | 05/01/2024 | | | Aa1/AA*/AA+@ | | | 1,395,000 | | | | 1,536,314 | |
TN State School Board Authority Refunding Higher Education | | | 5.000 | | | | 05/01/2025 | | | Aa1/AA*/AA+@ | | | 1,440,000 | | | | 1,583,323 | |
West Wilson Utility District TN Waterworks Revenue | | | 4.750 | | | | 06/01/2028 | | | Aa3 | | | 2,460,000 | | | | 2,683,811 | |
White House Utility District TN Water & Sewer | | | 5.000 | | | | 01/01/2028 | | | Aa3 | | | 1,235,000 | | | | 1,337,270 | |
White House Utility District TN Water & Sewer | | | 5.000 | | | | 01/01/2030 | | | Aa3 | | | 2,505,000 | | | | 2,708,055 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 45,295,246 | |
| GENERAL OBLIGATION BONDS | | | | | | | | | | | | | | | | | | |
| 12.22% of Net Assets | | | | | | | | | | | | | | | | | | |
Franklin TN Water & Sewer Revenue & Tax | | | 5.000 | | | | 04/01/2024 | | | Aaa | | | 750,000 | | | | 964,658 | |
Memphis TN Refunding & General Impact General Obligation | | | 5.000 | | | | 05/01/2036 | | | Aa2/AA* | | | 850,000 | | | | 966,246 | |
Metropolitan Government Nashville and Davidson County TN | | | 5.000 | | | | 01/01/2025 | | | Aa1/AA* | | | 4,025,000 | | | | 4,575,016 | |
Pigeon Forge Industrial Development Board TN | | | 5.000 | ** | | | 06/01/2027 | | | AA* | | | 1,400,000 | | | | 1,623,664 | |
Pigeon Forge Industrial Development Board TN Public Facilities | | | 5.000 | | | | 06/01/2029 | | | AA* | | | 1,000,000 | | | | 1,138,720 | |
Pigeon Forge Industrial Development Board TN Public Facilities | | | 5.000 | | | | 06/01/2034 | | | AA* | | | 850,000 | | | | 944,894 | |
Rhea County TN | | | 5.000 | | | | 04/01/2029 | | | A1 | | | 1,385,000 | | | | 1,568,831 | |
Shelby County TN — Series A | | | 4.600 | | | | 11/01/2022 | | | Aa1/AA+*/AA+@ | | | 500,000 | | | | 507,620 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 12,289,649 | |
The accompanying footnotes are an integral part of the financial statements.
32
DUPREE MUTUAL FUNDS — TENNESSEE TAX-FREE INCOME SERIES | |
SCHEDULE OF PORTFOLIO INVESTMENTS
Tennessee Municipal Bonds — 100% of Net Assets
June 30, 2012
| | | | | | | | | | | | | | | | | | |
| Bond Description | | Coupon | | | Maturity
Date | | | Rating# | | Par Value | | | Fair Value | |
| | | | | | | | | | | | | | | | | | |
| MUNICIPAL UTILITY REVENUE BONDS | | | | | | | | | | | | | | | | | | |
| 11.31% of Net Assets | | | | | | | | | | | | | | | | | | |
Citizens Gas Utility District TN Gas Revenue Refunding | | | 5.000 | % | | | 05/01/2029 | | | A* | | $ | 250,000 | | | $ | 270,565 | |
Clarksville TN Electric Systems Revenue — Series A | | | 5.000 | | | | 09/01/2028 | | | Aa2/AA-* | | | 1,000,000 | | | | 1,158,090 | |
Clarksville TN Electric Systems Revenue — Series A | | | 5.000 | | | | 09/01/2032 | | | Aa2/AA-* | | | 480,000 | | | | 542,045 | |
Clarksville TN Electric Systems Revenue — Series A | | | 5.000 | ^ | | | 09/01/2033 | | | Aa2/AA-* | | | 2,000,000 | | | | 2,244,740 | |
Columbia TN Waterworks Revenue | | | 5.000 | | | | 12/01/2032 | | | Aa3 | | | 885,000 | | | | 983,235 | |
Knox-Chapman TN Utility District Knox County Water & Sewer | | | 5.250 | | | | 01/01/2036 | | | AA-* | | | 700,000 | | | | 796,061 | |
Metropolitan Government Nashville & Davidson County TN | | | 4.750 | | | | 05/15/2028 | | | AA+*/AA+@ | | | 460,000 | | | | 506,975 | |
Metropolitan Government Nashville & Davidson County TN | | | 5.000 | | | | 05/15/2036 | | | AA+*/AA+@ | | | 3,085,000 | | | | 3,516,190 | |
West Wilson Utility District TN Waterworks Revenue | | | 5.000 | | | | 06/01/2033 | | | Aa3 | | | 1,170,000 | | | | 1,357,914 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 11,375,815 | |
| UNIVERSITY CONSOLIDATED EDUCATION AND BUILDING REVENUE BONDS | |
| 7.71% of Net Assets | | | | | | | | | | | | | | | | | | |
Metropolitan Government Nashville & Davidson County TN Housing | | | 5.000 | | | | 10/01/2034 | | | Aa2/AA*/AA+@ | | | 1,000,000 | | | | 1,120,480 | |
Shelby County TN Health Education & Housing Facilities Board | | | 5.000 | | | | 08/01/2030 | | | A1/A+* | | | 500,000 | | | | 560,835 | |
TN State School Board Authority Higher Education Facilities | | | 5.000 | | | | 05/01/2028 | | | Aa1/AA*/AA@ | | | 1,000,000 | | | | 1,127,460 | |
TN State School Board Authority Higher Education Facilities | | | 5.125 | | | | 05/01/2033 | | | Aa1/AA*/AA@ | | | 1,300,000 | | | | 1,445,431 | |
TN State School Board Authority Higher Education Facilities | | | 5.000 | | | | 05/01/2034 | | | Aa1/AA*/AA+@ | | | 500,000 | | | | 559,100 | |
TN State School Board Authority Higher Education Facilities | | | 4.750 | | | | 05/01/2030 | | | Aa1/AA*/AA+@ | | | 2,750,000 | | | | 2,941,730 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 7,755,036 | |
| HOSPITAL AND HEALTHCARE REVENUE BONDS | | | | | | | | | | | | | | | | | | |
| 7.50% of Net Assets | | | | | | | | | | | | | | | | | | |
Rutherford County TN Health & Education Facilities Board | | | 5.000 | | | | 11/15/2040 | | | Aa1/AA+*/AA+@ | | | 1,500,000 | | | | 1,632,915 | |
Shelby County TN Health Education & Housing Facilities | | | 5.000 | | | | 07/01/2031 | | | Aa2/AAA@ | | | 4,750,000 | | | | 5,092,998 | |
Shelby County TN Health Education & Housing Facilities | | | 5.000 | | | | 05/01/2027 | | | A2/A+* | | | 750,000 | | | | 814,283 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 7,540,196 | |
| STATE AND LOCAL MORTGAGE REVENUE | | | | | | | | | | | | | | | | | | |
| 6.30% of Net Assets | | | | | | | | | | | | | | | | | | |
TN Housing Development Agency | | | 5.000 | | | | 07/01/2028 | | | Aa1/AA+* | | | 780,000 | | | | 822,120 | |
TN Housing Development Agency | | | 5.400 | | | | 07/01/2035 | | | Aa1/AA+* | | | 575,000 | | | | 610,662 | |
TN Housing Development Agency Homeownership Program 1 | | | 5.000 | | | | 07/01/2029 | | | Aa1/AA+* | | | 795,000 | | | | 839,234 | |
TN Housing Development Agency Homeownership Program 2 | | | 4.700 | | | | 07/01/2027 | | | Aa1/AA+* | | | 1,475,000 | | | | 1,549,148 | |
TN Housing Development Agency Housing Finance Program | | | 4.850 | | | | 01/01/2025 | | | Aa2 | | | 745,000 | | | | 795,906 | |
TN Housing Development Agency Mortgage Financing — Series A | | | 5.200 | | | | 07/01/2023 | | | Aa2/AA* | | | 1,690,000 | | | | 1,718,308 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 6,335,378 | |
| LEASE REVENUE BONDS | | | | | | | | | | | | | | | | | | |
| 2.86% of Net Assets | | | | | | | | | | | | | | | | | | |
Chattanooga TN Electric Revenue — Series A | | | 5.000 | | | | 09/01/2026 | | | AA*/AA@ | | | 250,000 | | | | 285,408 | |
Memphis/Shelby County TN Special Facilities Revenue FedEx | | | 5.050 | | | | 09/01/2012 | | | Baa1/BBB* | | | 250,000 | | | | 251,603 | |
Memphis Shelby County TN Port Authority Community Development | | | 5.000 | | | | 04/01/2035 | | | Aa3/AA-* | | | 625,000 | | | | 688,200 | |
Memphis-Shelby County Sports Authority | | | 5.250 | | | | 11/01/2027 | | | Aa3/AA-*/A+@ | | | 750,000 | | | | 828,638 | |
TN Housing Development Agency — Series 1B | | | 5.000 | | | | 07/01/2029 | | | Aa1/AA+*/NR@ | | | 785,000 | | | | 820,286 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 2,874,135 | |
| PREREFUNDED BONDS | | | | | | | | | | | | | | | | | | |
| 2.85% of Net Assets | | | | | | | | | | | | | | | | | | |
Johnson City TN Health & Educational Facilities | | | 5.125 | | | | 07/01/2025 | | | BBB* | | | 1,535,000 | | | | 1,537,303 | |
Kingsport TN Industrial Development Board Multifamily | | | 5.400 | | | | 04/20/2021 | | | NR | | | 335,000 | | | | 353,110 | |
Metro Nashville & Davidson County TN General Obligation | | | 5.000 | | | | 01/01/2023 | | | Aa1/BBB* | | | 440,000 | | | | 488,770 | |
Metro Nashville & Davidson County TN General Obligation | | | 5.000 | | | | 01/01/2024 | | | Aa1/BBB* | | | 435,000 | | | | 483,215 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 2,862,398 | |
| ESCROWED TO MATURITY BONDS | | | | | | | | | | | | | | | | | | |
| 1.93% of Net Assets | | | | | | | | | | | | | | | | | | |
Johnson City TN Health & Educational Revenue | | | 5.000 | | | | 07/01/2018 | | | BBB* | | | 775,000 | | | | 776,922 | |
Johnson City TN Health & Educational Facilities | | | 6.500 | | | | 07/01/2014 | | | Baa1/BBB*/BBB+@ | | | 1,000,000 | | | | 1,092,790 | |
Metro Nashville & Davidson County TN Water & Sewer | | | 6.500 | | | | 12/01/2014 | | | Aaa/BBB* | | | 60,000 | | | | 68,908 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 1,938,620 | |
The accompanying footnotes are an integral part of the financial statements.
33
DUPREE MUTUAL FUNDS — TENNESSEE TAX-FREE INCOME SERIES | |
SCHEDULE OF PORTFOLIO INVESTMENTS
Tennessee Municipal Bonds — 100% of Net Assets
June 30, 2012
| | | | | | | | | | | | | | | | | | |
| Bond Description | | Coupon | | | Maturity
Date | | | Rating# | | Par Value | | | Fair Value | |
| | | | | | | | | | | | | | | | | | |
| INDUSTRIAL REVENUE BONDS | | | | | | | | | | | | | | | | | | |
| .97% of Net Assets | | | | | | | | | | | | | | | | | | |
Industrial Development Board TN Blount County & Cities | | | 5.000 | % | | | 06/01/2027 | | | Aa3/AA-* | | $ | 850,000 | | | $ | 972,171 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 972,171 | |
| PUBLIC FACILITIES REVENUE BONDS | | | | | | | | | | | | | | | | | | |
| .55% of Net Assets | | | | | | | | | | | | | | | | | | |
Memphis Shelby County TN Sports Authority Memphis Arena | | | 5.250 | | | | 11/01/2026 | | | Aa3/AA-*/A+@ | | | 500,000 | | | | 553,445 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 553,445 | |
| | | | | | | | | | | | | | | | | | |
Total Investments (cost $94,187,505) (See (a) below for further explanation) 99.23% of Net Assets | | | | | | $ | 99,792,079 | |
| | | | | | | | | | | | | | | | | | |
| | * | | Standard and Poor’s Corporation |
| | ** | | When-Issued security or extended settlement — see footnote 1(D) |
| | ^ | | Security is segregated — see footnote 1(D) |
| | @ | | Fitch’s Investors Service |
| | | | All other ratings by Moody’s Investors Service, Inc. |
| | # | | Bond ratings are unaudited and not covered by Report of Independent Registered Public Accounting Firm. |
| (a) | | Represents cost for financial reporting and federal income tax purposes and differs from fair value by net unrealized appreciation of securities as follows: |
| | | | | | |
| | | | | | |
| | Unrealized appreciation | | $ | 5,684,042 | |
| | Unrealized depreciation | | | (79,468 | ) |
| | | | | | |
| | Net unrealized appreciation | | $ | 5,604,574 | |
| | | | | | |
Other Information
The following is a summary of the inputs used, as of June 30, 2012, involving the Fund’s investments in securities carried at fair value. The inputs or methodology used for valuing securities may not be an indication of the risk associated with investing in those securities. For more information on valuation inputs, and their aggregation into the levels used in the table below, please refer to the Security Valuation section in the accompanying Notes to Financial Statements.
| | | | | | |
| | | | | | |
| | | Valuation Inputs | | Municipal Bonds | |
Level 1 | | Quoted Prices | | $ | — | |
Level 2 | | Other Significant Observable Inputs | | | 99,792,079 | |
Level 3 | | Significant Unobservable Inputs | | | — | |
| | | | | | |
| | | | $ | 99,792,079 | |
| | | | | | |
The accompanying footnotes are an integral part of the financial statements.
34
TENNESSEE TAX-FREE INCOME SERIES
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2012
| | | | | | | | |
ASSETS: | | | | | | | | |
Investments in securities, at fair value (Cost: $94,187,505) | | | | | | $ | 99,792,079 | |
Cash | | | | | | | 1,536,669 | |
Interest receivable | | | | | | | 1,347,237 | |
Prepaid expenses | | | | | | | 278 | |
| | | | | | | | |
Total assets | | | | | | | 102,676,263 | |
LIABILITIES: | | | | | | | | |
Payable for: | | | | | | | | |
Investments purchased | | | 1,629,510 | | | | | |
Distributions to shareholders | | | 360,504 | | | | | |
Fund shares redeemed | | | 12,186 | | | | | |
Investment advisory fee | | | 40,967 | | | | | |
Transfer agent fee | | | 10,547 | | | | | |
Accrued expenses | | | 39,310 | | | | | |
| | | | | | | | |
Total liabilities | | | | | | | 2,093,024 | |
| | | | | | | | |
NET ASSETS: | | | | | | | | |
Capital | | | | | | | 95,600,001 | |
Net accumulated realized loss on investment transactions | | | | | | | (621,336 | ) |
Net unrealized appreciation in value of investments | | | | | | | 5,604,574 | |
| | | | | | | | |
Net assets at value | | | | | | $ | 100,583,239 | |
| | | | | | | | |
NET ASSET VALUE, offering price and redemption price per share
($100,583,239 ÷ 8,703,453 shares outstanding; unlimited number of shares authorized; no par value) | | | | | | $ | 11.56 | |
| | | | | | | | |
STATEMENT OF OPERATIONS
For the year ended June 30, 2012
| | | | |
Net investment income: | | | | |
Interest income | | $ | 4,038,241 | |
| | | | |
Expenses: | | | | |
Investment advisory fee | | | 480,310 | |
Transfer agent fee | | | 123,764 | |
Custodian expense | | | 15,807 | |
Professional fees | | | 20,988 | |
Trustees fees | | | 13,326 | |
Other expenses | | | 20,386 | |
| | | | |
Total expenses | | | 674,581 | |
Custodian expense reduction | | | (368 | ) |
| | | | |
Net expenses | | | 674,213 | |
| | | | |
Net investment income | | | 3,364,028 | |
| | | | |
Realized and unrealized gain/(loss) on investments: | | | | |
Net realized gain | | | 202,311 | |
Net change in unrealized appreciation/depreciation | | | 4,124,407 | |
| | | | |
Net realized and unrealized gain on investments | | | 4,326,718 | |
| | | | |
Net increase in net assets resulting from operations | | $ | 7,690,746 | |
| | | | |
The accompanying notes are an integral part of the financial statements.
35
TENNESSEE TAX-FREE INCOME SERIES
STATEMENTS OF CHANGES IN NET ASSETS
For the years ended June 30, 2012 and 2011
| | | | | | | | |
| | | 2012 | | | 2011 | |
Operations: | | | | | | | | |
Net investment income | | $ | 3,364,028 | | | $ | 3,451,031 | |
Net realized gain on investments | | | 202,311 | | | | 407,508 | |
Net change in unrealized appreciation/depreciation | | | 4,124,407 | | | | (613,152 | ) |
| | | | | | | | |
Net increase in net assets resulting from operations | | | 7,690,746 | | | | 3,245,387 | |
Distributions from net investment income | | | (3,364,028 | ) | | | (3,451,031 | ) |
Net fund share transactions (Note 4) | | | 4,516,305 | | | | (3,013,841 | ) |
| | | | | | | | |
Total increase/(decrease) | | | 8,843,023 | | | | (3,219,485 | ) |
Net assets: | | | | | | | | |
Beginning of year | | | 91,740,216 | | | | 94,959,701 | |
| | | | | | | | |
End of year | | $ | 100,583,239 | | | $ | 91,740,216 | |
| | | | | | | | |
FINANCIAL HIGHLIGHTS
| | | | | | | | | | | | | | | | | | | | |
| Selected data for a share outstanding: | | For the years ended June 30, | |
| | | 2012 | | | 2011 | | | 2010 | | | 2009 | | | 2008 | |
Net asset value, beginning of year | | | $11.04 | | | | $11.04 | | | | $10.71 | | | | $10.77 | | | | $10.87 | |
| | | | | | | | | | | | | | | | | | | | |
Income from investment operations: | | | | | | | | | | | | | | | | | | | | |
Net investment income | | | 0.40 | | | | 0.41 | | | | 0.40 | | | | 0.41 | | | | 0.41 | |
Net gains/(losses) on securities, both realized and unrealized | | | 0.52 | | | | 0.00 | (b) | | | 0.33 | | | | (0.06 | ) | | | (0.10 | ) |
| | | | | | | | | | | | | | | | | | | | |
Total from investment operations | | | 0.92 | | | | 0.41 | | | | 0.73 | | | | 0.35 | | | | 0.31 | |
Less distributions: | | | | | | | | | | | | | | | | | | | | |
Distributions from net investment income | | | (0.40 | ) | | | (0.41 | ) | | | (0.40 | ) | | | (0.41 | ) | | | (0.41 | ) |
| | | | | | | | | | | | | | | | | | | | |
Net asset value, end of year | | | $11.56 | | | | $11.04 | | | | $11.04 | | | | $10.71 | | | | $10.77 | |
| | | | | | | | | | | | | | | | | | | | |
Total return | | | 8.44% | | | | 3.78% | | | | 6.92% | | | | 3.40% | | | | 2.87% | |
Net assets, end of year (in thousands) | | | $100,583 | | | | $91,740 | | | | $94,960 | | | | $92,222 | | | | $90,397 | |
Ratio of net expenses to average net assets (a) | | | 0.70% | | | | 0.69% | | | | 0.70% | | | | 0.70% | | | | 0.71% | |
Ratio of net investment income to average net assets | | | 3.50% | | | | 3.68% | | | | 3.67% | | | | 3.90% | | | | 3.74% | |
Portfolio turnover | | | 8.39% | | | | 6.38% | | | | 14.51% | | | | 7.62% | | | | 15.71% | |
| (a) | | Percentages are after Custodian reduction for which no recovery will be sought. Percentages before Custodian reduction were: .70% for 2012; .69% for 2011; .70% for 2010; .71% for 2009; and .72% for 2008. |
| (b) | | Rounds to less than $.01. |
The accompanying notes are an integral part of the financial statements.
36
DUPREE MUTUAL FUNDS — TENNESSEE TAX-FREE SHORT-TO-MEDIUM SERIES | |
SCHEDULE OF PORTFOLIO INVESTMENTS
Tennessee Municipal Bonds — 100% of Net Assets
June 30, 2012
| | | | | | | | | | | | | | | | | | |
| Bond Description | | Coupon | | | Maturity
Date | | | Rating# | | Par Value | | | Fair Value | |
| | | | | | | | | | | | | | | | | | |
| INSURED MUNICIPAL BONDS | | | | | | | | | | | | | | | | | | |
| 45.13% of Net Assets | | | | | | | | | | | | | | | | | | |
Blount County Public Building Authority | | | 4.000 | % | | | 06/01/2020 | | | Aa2/AA-* | | $ | 150,000 | | | $ | 169,404 | |
Cross Anchor TN Utility District | | | 4.250 | | | | 12/01/2015 | | | AA-* | | | 65,000 | | | | 71,811 | |
Cross Anchor TN Utility District | | | 4.250 | | | | 12/01/2016 | | | AA-* | | | 65,000 | | | | 73,423 | |
Dickson County TN Refunding | | | 5.000 | | | | 06/01/2015 | | | A1/A+* | | | 140,000 | | | | 145,537 | |
Fayetteville TN Electric System Revenue | | | 3.000 | | | | 06/01/2015 | | | AA-* | | | 105,000 | | | | 111,188 | |
Johnson City TN Refunding | | | 4.000 | | | | 06/01/2015 | | | AA@ | | | 400,000 | | | | 436,528 | |
Johnson City TN Electric Revenue | | | 4.500 | | | | 05/01/2021 | | | Aa2/AA-* | | | 50,000 | | | | 56,855 | |
Johnson City TN Public Building Authority Revenue | | | 4.250 | | | | 09/01/2014 | | | Aa2/AA@ | | | 50,000 | | | | 53,326 | |
Knoxville TN Electric Revenue — Series V | | | 4.750 | | | | 07/01/2021 | | | Aa2/AA+* | | | 150,000 | | | | 150,032 | |
Lawrenceburg TN Refunding Water & Sewer | | | 5.000 | | | | 07/01/2015 | | | Aa3 | | | 125,000 | | | | 139,965 | |
Lincoln County TN | | | 5.250 | | | | 04/01/2019 | | | Aa3 | | | 200,000 | | | | 241,718 | |
Madison County TN Refunding — School and Public Improvement | | | 5.000 | | | | 04/01/2018 | | | Aa2/AA-* | | | 175,000 | | | | 195,270 | |
Memphis-Shelby TN Sports Authority Memphis Arena Project | | | 5.500 | | | | 11/01/2012 | | | Aa3/AA-*/A+@ | | | 500,000 | | | | 507,585 | |
Memphis-Shelby County TN Sports Authority Memphis Arena | | | 5.000 | | | | 11/01/2017 | | | Aa3/AA-*/A+@ | | | 275,000 | | | | 318,384 | |
Memphis TN — Series A | | | 5.000 | | | | 04/01/2024 | | | Aa2/AA*/AA-@ | | | 200,000 | | | | 228,742 | |
Metro Nashville Davidson County Water and Sewer | | | 5.200 | | | | 01/01/2013 | | | Aa2/BBB*/AA-@ | | | 155,000 | | | | 158,481 | |
Metro Government Nashville & Davidson County TN | | | 5.000 | | | | 01/01/2019 | | | Aa1/AA* | | | 160,000 | | | | 175,755 | |
Metro Nashville Airport Authority — Series A | | | 4.500 | | | | 07/01/2014 | | | Aa3/AA-* | | | 250,000 | | | | 267,953 | |
New Market Utility District Jefferson County TN Waterworks | | | 3.500 | | | | 06/01/2015 | | | Aa3/AA-* | | | 100,000 | | | | 107,181 | |
New Market Utilty District Jefferson County TN Waterworks | | | 4.000 | | | | 06/01/2016 | | | Aa3/AA-* | | | 100,000 | | | | 110,411 | |
New Market Utilty District Jefferson County TN Waterworks | | | 4.000 | | | | 06/01/2017 | | | Aa3/AA-* | | | 100,000 | | | | 112,426 | |
Polk County TN Refinancing | | | 5.000 | | | | 05/01/2020 | | | Aa3 | | | 150,000 | | | | 171,248 | |
Robertson County School | | | 4.000 | | | | 06/01/2020 | | | Aa3/AA-* | | | 250,000 | | | | 281,060 | |
Robertson County TN School and Public Improvement | | | 4.000 | | | | 06/01/2019 | | | AA-* | | | 100,000 | | | | 114,607 | |
Sevier County TN Public Building Authority | | | 4.000 | | | | 03/01/2014 | | | AA-* | | | 100,000 | | | | 105,561 | |
Shelby County TN Refunding — Series A | | | 5.000 | | | | 04/01/2018 | | | Aa1/AA+* | | | 100,000 | | | | 111,277 | |
Shelby County Health Education | | | 5.250 | | | | 09/01/2020 | | | Aa3/AA-* | | | 400,000 | | | | 456,911 | |
Washington County TN Refunding School and Public Improvement | | | 5.000 | | | | 04/01/2015 | | | Aa2 | | | 200,000 | | | | 218,666 | |
Washington County TN Refunding-School and Public Improvement | | | 5.000 | | | | 04/01/2016 | | | Aa2 | | | 125,000 | | | | 136,736 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 5,428,041 | |
| GENERAL OBLIGATION BONDS | | | | | | | | | | | | | | | | | | |
| 18.33% of Net Assets | | | | | | | | | | | | | | | | | | |
Claiborne County TN Public Improvement — Series A | | | 5.000 | | | | 04/01/2017 | | | A+* | | | 170,000 | | | | 198,740 | |
Memphis TN Refunding General Improvement | | | 5.000 | | | | 10/01/2017 | | | Aa2/AA*/AA-@ | | | 100,000 | | | | 120,257 | |
Metro Government Nashville & Davidson County TN Refunding | | | 5.000 | | | | 05/15/2019 | | | Aa1/AA* | | | 250,000 | | | | 294,743 | |
Metro Government Nashville & Davidson County | | | 5.000 | | | | 01/01/2019 | | | Aa1/AA* | | | 200,000 | | | | 238,958 | |
Rhea County TN | | | 3.000 | | | | 04/01/2018 | | | A1 | | | 200,000 | | | | 216,250 | |
Sevier County TN Public Building Authority | | | 5.000 | | | | 06/01/2018 | | | AA-* | | | 150,000 | | | | 179,172 | |
Sevier County TN Public Building Authority | | | 5.000 | | | | 06/01/2019 | | | AA-* | | | 100,000 | | | | 118,206 | |
Sevier County TN Public Building Authority | | | 4.000 | | | | 06/01/2014 | | | AA* | | | 200,000 | | | | 211,314 | |
Tennessee State — Series A | | | 4.000 | | | | 05/01/2021 | | | Aaa/AA+*/AAA@ | | | 340,000 | | | | 384,295 | |
Unicoi County TN Refunding | | | 5.250 | | | | 04/01/2019 | | | A1/A+* | | | 200,000 | | | | 242,424 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 2,204,359 | |
| PREREFUNDED BONDS | | | | | | | | | | | | | | | | | | |
| 15.77% of Net Assets | | | | | | | | | | | | | | | | | | |
Maury County TN School & Public Improvement | | | 5.000 | | | | 04/01/2016 | | | Aa2 | | | 1,000,000 | | | | 1,081,490 | |
Memphis TN General Obligation General Improvement | | | 5.000 | | | | 10/01/2016 | | | Aa2/AA*/AA-@ | | | 450,000 | | | | 496,319 | |
Memphis TN Electric System Revenue — Series A | | | 5.000 | | | | 12/01/2015 | | | Aa2/AA+*/AA+@ | | | 300,000 | | | | 319,148 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 1,896,957 | |
| LEASE REVENUE BONDS | | | | | | | | | | | | | | | | | | |
| 6.00% of Net Assets | | | | | | | | | | | | | | | | | | |
Chattanooga TN Electric Revenue — Series A | | | 5.000 | | | | 09/01/2021 | | | AA*/AA@ | | | 400,000 | | | | 470,367 | |
Memphis-Shelby County TN Airport — Federal Express Corporation | | | 5.050 | | | | 09/01/2012 | | | Baa1/BBB* | | | 250,000 | | | | 251,603 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 721,970 | |
The accompanying footnotes are an integral part of the financial statements.
37
DUPREE MUTUAL FUNDS — TENNESSEE TAX-FREE SHORT-TO-MEDIUM SERIES | |
SCHEDULE OF PORTFOLIO INVESTMENTS
Tennessee Municipal Bonds — 100% of Net Assets
June 30, 2012
| | | | | | | | | | | | | | | | | | |
| Bond Description | | Coupon | | | Maturity
Date | | | Rating# | | Par Value | | | Fair Value | |
| | | | | | | | | | | | | | | | | | |
| MUNICIPAL UTILITY REVENUE BONDS | | | | | | | | | | | | | | | | | | |
| 5.34% of Net Assets | | | | | | | | | | | | | | | | | | |
Harpeth Valley Utilities District | | | 5.000 | % | | | 03/01/2014 | | | A1 | | $ | 250,000 | | | $ | 251,425 | |
Johnson City TN Electric Revenue | | | 4.000 | | | | 05/01/2022 | | | Aa2/AA-* | | | 100,000 | | | | 108,360 | |
Metropolitan Government Nashville & Davidson County Water & Sewer | | | 5.250 | | | | 01/01/2019 | | | Aa2/AA-*/AA-@ | | | 125,000 | | | | 153,601 | |
Sevier County TN Utility District Gas System Revenue | | | 2.650 | | | | 06/01/2015 | | | A+* | | | 125,000 | | | | 129,094 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 642,480 | |
| STATE AND LOCAL MORTGAGE REVENUE BONDS | | | | | | | | | | | | | | | | | | |
| 4.50% of Net Assets | | | | | | | | | | | | | | | | | | |
TN Housing Development Agency Homeownership Program | | | 4.200 | | | | 01/01/2016 | | | Aa1/AA+* | | | 145,000 | | | | 152,095 | |
TN Housing Development Agency — Series 1B | | | 4.800 | | | | 07/01/2024 | | | Aa1/AA+* | | | 270,000 | | | | 285,082 | |
TN Housing Development Agency Homeownership Program — 2 | | | 2.950 | | | | 01/01/2015 | | | Aa1/AA+* | | | 100,000 | | | | 103,752 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 540,929 | |
| PUBLIC FACILITIES REVENUE BONDS | | | | | | | | | | | | | | | | | | |
| 3.85% of Net Assets | | | | | | | | | | | | | | | | | | |
Blount County TN Public Building Authority Series B-19 | | | 3.500 | | | | 06/01/2015 | | | AA+* | | | 200,000 | | | | 215,504 | |
Metropolitian Government Nashville Davidson County Convention | | | 5.000 | | | | 07/01/2015 | | | A1/A* | | | 125,000 | | | | 138,393 | |
Metropolitan Government Nashville & Davidson County Convention | | | 3.750 | | | | 07/01/2018 | | | A1/A* | | | 100,000 | | | | 109,087 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 462,984 | |
| | | | | | | | | | | | | | | | | | |
Total Investments (cost $11,383,479) (See (a) below for further explanation) 98.92% of Net Assets | | | | | | | | | $ | 11,897,720 | |
| | | | | | | | | | | | | | | | | | |
| | * | | Standard and Poor’s Corporation |
| | @ | | Fitch’s Investors Service |
| | | | All other ratings by Moody’s Investors Service, Inc. |
| | # | | Bond ratings are unaudited and not covered by Report of Independent Registered Public Accounting Firm. |
| (a) | | Represents cost for financial reporting purposes and differs from fair value by net unrealized appreciation of securities as follows: |
| | | | | | |
| | | | | | |
| | Unrealized appreciation | | $ | 523,598 | |
| | Unrealized depreciation | | | (9,357 | ) |
| | | | | | |
| | Net unrealized appreciation | | $ | 514,241 | |
| | | | | | |
Cost for Federal Income Tax purposes is $11,599,873 and differs from fair value by net unrealized appreciation of $297,847.
Other Information
The following is a summary of the inputs used, as of June 30, 2012, involving the Fund’s investments in securities carried at fair value. The inputs or methodology used for valuing securities may not be an indication of the risk associated with investing in those securities. For more information on valuation inputs, and their aggregation into the levels used in the table below, please refer to the Security Valuation section in the accompanying Notes to Financial Statements.
| | | | | | |
| | | | | | |
| | | Valuation Inputs | | Municipal Bonds | |
Level 1 | | Quoted Prices | | $ | — | |
Level 2 | | Other Significant Observable Inputs | | | 11,897,720 | |
Level 3 | | Significant Unobservable Inputs | | | — | |
| | | | | | |
| | | | $ | 11,897,720 | |
| | | | | | |
The accompanying footnotes are an integral part of the financial statements.
38
TENNESSEE TAX-FREE SHORT-TO-MEDIUM SERIES
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2012
| | | | | | | | |
ASSETS: | | | | | | | | |
Investments in securities, at fair value (Cost: $11,383,479) | | | | | | $ | 11,897,720 | |
Cash | | | | | | | 704 | |
Defaulted securities receivable | | | | | | | 23,606 | |
Interest receivable | | | | | | | 129,778 | |
| | | | | | | | |
Total assets | | | | | | | 12,051,808 | |
LIABILITIES: | | | | | | | | |
Payable for: | | | | | | | | |
Distributions to shareholders | | | 5,996 | | | | | |
Fund shares redeemed | | | 1,473 | | | | | |
Investment advisory fee | | | 4,777 | | | | | |
Transfer agent fee | | | 1,496 | | | | | |
Trustees fees | | | 797 | | | | | |
Notes payable | | | 3,001 | | | | | |
Accrued expenses | | | 8,013 | | | | | |
| | | | | | | | |
Total liabilities | �� | | | | | | 25,553 | |
| | | | | | | | |
NET ASSETS: | | | | | | | | |
Capital | | | | | | | 11,824,416 | |
Net accumulated realized loss on investment transactions | | | | | | | (312,402 | ) |
Net unrealized appreciation in value of investments | | | | | | | 514,241 | |
| | | | | | | | |
Net assets at value | | | | | | $ | 12,026,255 | |
| | | | | | | | |
NET ASSET VALUE, offering price and redemption price per share
($12,026,255 ÷ 1,092,268.176 shares outstanding; unlimited number of shares authorized; no par value) | | | | | | $ | 11.01 | |
| | | | | | | | |
STATEMENT OF OPERATIONS
For the year ended June 30, 2012
| | | | |
Net investment income: | | | | |
Interest income | | $ | 321,540 | |
| | | | |
Expenses: | | | | |
Investment advisory fee | | | 52,247 | |
Transfer agent fee | | | 16,253 | |
Custodian expense | | | 5,676 | |
Professional fees | | | 8,261 | |
Pricing fees | | | 4,500 | |
Trustees fees | | | 1,436 | |
Other expenses | | | 2,670 | |
| | | | |
Total expenses | | | 91,043 | |
Custodian expense reduction | | | (43 | ) |
| | | | |
Net expenses | | | 91,000 | |
| | | | |
Net investment income | | | 230,540 | |
| | | | |
Realized and unrealized gain/(loss) on investments: | | | | |
Net realized loss | | | (88 | ) |
Net change in unrealized appreciation/depreciation | | | 145,377 | |
| | | | |
Net realized and unrealized gain on investments | | | 145,289 | |
| | | | |
Net increase in net assets resulting from operations | | $ | 375,829 | |
| | | | |
The accompanying notes are an integral part of the financial statements.
39
TENNESSEE TAX-FREE SHORT-TO-MEDIUM SERIES
STATEMENTS OF CHANGES IN NET ASSETS
For the years ended June 30, 2012 and 2011
| | | | | | | | |
| | | 2012 | | | 2011 | |
Operations: | | | | | | | | |
Net investment income | | $ | 230,540 | | | $ | 249,321 | |
Net realized gain/(loss) on investments | | | (88 | ) | | | 64,546 | |
Net change in unrealized appreciation/depreciation | | | 145,377 | | | | (57,991 | ) |
| | | | | | | | |
Net increase in net assets resulting from operations | | | 375,829 | | | | 255,876 | |
Distributions from net investment income | | | (230,540 | ) | | | (249,321 | ) |
Net fund share transactions (Note 4) | | | 1,991,828 | | | | (230,591 | ) |
| | | | | | | | |
Total increase/(decrease) | | | 2,137,117 | | | | (224,036 | ) |
Net assets: | | | | | | | | |
Beginning of year | | | 9,889,138 | | | | 10,113,174 | |
| | | | | | | | |
End of year | | $ | 12,026,255 | | | $ | 9,889,138 | |
| | | | | | | | |
FINANCIAL HIGHLIGHTS
| | | | | | | | | | | | | | | | | | | | |
| Selected data for a share outstanding: | | For the years ended June 30, | |
| | | 2012 | | | 2011 | | | 2010 | | | 2009 | | | 2008 | |
Net asset value, beginning of year | | | $10.85 | | | | $10.82 | | | | $10.54 | | | | $10.31 | | | | $10.32 | |
| | | | | | | | | | | | | | | | | | | | |
Income from investment operations: | | | | | �� | | | | | | | | | | | | | | | |
Net investment income | | | 0.24 | | | | 0.26 | | | | 0.28 | | | | 0.31 | | | | 0.31 | |
Net gains/(losses) on securities, both realized and unrealized | | | 0.16 | | | | 0.03 | | | | 0.28 | | | | 0.23 | | | | (0.01 | ) |
| | | | | | | | | | | | | | | | | | | | |
Total from investment operations | | | 0.40 | | | | 0.29 | | | | 0.56 | | | | 0.54 | | | | 0.30 | |
Less distributions: | | | | | | | | | | | | | | | | | | | | |
Distributions from net investment income | | | (0.24 | ) | | | (0.26 | ) | | | (0.28 | ) | | | (0.31 | ) | | | (0.31 | ) |
| | | | | | | | | | | | | | | | | | | | |
Net asset value, end of year | | | $11.01 | | | | $10.85 | | | | $10.82 | | | | $10.54 | | | | $10.31 | |
| | | | | | | | | | | | | | | | | | | | |
Total return | | | 3.74% | | | | 2.72% | | | | 5.39% | | | | 5.31% | | | | 2.90% | |
Net assets, end of year (in thousands) | | | $12,026 | | | | $9,889 | | | | $10,113 | | | | $9,075 | | | | $10,335 | |
Ratio of net expenses to average net assets (a) | | | 0.87% | | | | 0.80% | | | | 0.81% | | | | 0.82% | | | | 0.81% | |
Ratio of net investment income to average net assets | | | 2.21% | | | | 2.40% | | | | 2.63% | | | | 2.97% | | | | 2.96% | |
Portfolio turnover | | | 1.86% | | | | 18.32% | | | | 16.16% | | | | 15.00% | | | | 22.22% | |
| (a) | | Percentages are after expenses waived by Adviser and Custodian reduction. No recovery of these waivers and reductions will be sought. Expenses waived by Adviser and custodian were: 0% and 0% for 2012; .02% and 0% for 2011; .02% and 0% for 2010; 0% and .04% for 2009; and 0% and .05% for 2008, respectively. |
The accompanying notes are an integral part of the financial statements.
40
DUPREE MUTUAL FUNDS — INTERMEDIATE GOVERNMENT BOND SERIES | |
SCHEDULE OF PORTFOLIO INVESTMENTS
U.S. Government Securities and Agencies — 100% of Net Assets
June 30, 2012
| | | | | | | | | | | | | | | | | | |
| Bond Description | | Coupon | | | Maturity
Date | | | Rating# | | Par Value | | | Fair Value | |
| | | | | | | | | | | | | | | | | | |
| FEDERAL FARM CREDIT | | | | | | | | | | | | | | | | | | |
| 59.82% of Net Assets | | | | | | | | | | | | | | | | | | |
Federal Farm Credit Bank | | | 5.840 | % | | | 07/20/2022 | | | Aaa/AA+*/AAA@ | | $ | 2,650,000 | | | $ | 3,420,216 | |
Federal Farm Credit Bank | | | 5.250 | | | | 05/10/2022 | | | Aaa/AA+*/AAA@ | | | 2,000,000 | | | | 2,492,694 | |
Federal Farm Credit Bank | | | 5.125 | | | | 11/28/2022 | | | Aaa/AA+*/AAA@ | | | 2,000,000 | | | | 2,494,073 | |
Federal Farm Credit Bank | | | 3.850 | | | | 05/20/2021 | | | Aaa/AA+*/AAA@ | | | 500,000 | | | | 511,892 | |
Federal Farm Credit Bank | | | 5.300 | | | | 06/24/2014 | | | Aaa/AA+*/AAA@ | | | 1,550,000 | | | | 1,700,579 | |
Federal Farm Credit Bank | | | 5.250 | | | | 10/25/2022 | | | Aaa/AA+*/AAA@ | | | 1,500,000 | | | | 1,878,458 | |
Federal Farm Credit Bank | | | 5.875 | | | | 08/16/2021 | | | Aaa/AA+*/AAA@ | | | 1,900,000 | | | | 1,995,127 | |
Federal Farm Credit Bank | | | 5.050 | | | | 12/21/2021 | | | Aaa/AA+*/AAA@ | | | 370,000 | | | | 456,327 | |
Federal Farm Credit Bank | | | 6.200 | | | | 07/26/2022 | | | Aaa/AA+*/AAA@ | | | 500,000 | | | | 501,600 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 15,450,966 | |
| FEDERAL HOME LOAN BANK | | | | | | | | | | | | | | | | | | |
| 27.36% of Net Assets | | | | | | | | | | | | | | | | | | |
Federal Home Loan Bank | | | 2.700 | | | | 03/21/2022 | | | Aaa/AA+* | | | 1,500,000 | | | | 1,510,711 | |
Federal Home Loan Bank | | | 7.000 | | | | 08/15/2014 | | | Aaa/AA+* | | | 500,000 | | | | 568,766 | |
Federal Home Loan Bank | | | 5.250 | | | | 12/11/2020 | | | Aaa/AA+* | | | 985,000 | | | | 1,238,219 | |
Federal Home Loan Bank | | | 5.000 | | | | 12/10/2021 | | | Aaa/AA+* | | | 500,000 | | | | 620,925 | |
Federal Home Loan Bank | | | 5.750 | | | | 06/10/2022 | | | Aaa/AA+* | | | 2,000,000 | | | | 2,607,028 | |
Federal Home Loan Bank | | | 5.550 | | | | 06/19/2023 | | | Aaa/AA+* | | | 500,000 | | | | 521,841 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 7,067,490 | |
| FEDERAL HOME LOAN MORTGAGE | | | | | | | | | | | | | | | | | | |
| 5.53% of Net Assets | | | | | | | | | | | | | | | | | | |
Federal National Mortgage Association | | | 8.100 | | | | 08/12/2019 | | | Aaa/AA+*/AAA@ | | | 1,000,000 | | | | 1,428,436 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 1,428,436 | |
| STUDENT LOAN MARKETING ASSOCIATION | | | | | | | | | | | | | | | | | | |
| 3.89% of Net Assets | | | | | | | | | | | | | | | | | | |
Student Loan Marketing Association | | | 7.300 | | | | 08/01/2012 | | | AAA | | | 1,000,000 | | | | 1,005,992 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 1,005,992 | |
| | | | | | | | | | | | | | | | | | |
TOTAL GOVERNMENT AGENCIES | | | | | | | | | | | | | | | | | 24,952,884 | |
| | | | | | | | | | | | | | | | | | |
| INVESTMENT FUND | | | | | | | | | | | | | | | | | | |
| 2.48% of Net Assets | | | | | | | | | | | | | | | | | | |
US Bank U.S. Treasury Money Market Fund | | | | | | | | | | | | | 639,403 | | | | 639,403 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 639,403 | |
| | | | | | | | | | | | | | | | | | |
Total Investments (cost $24,107,798) (See (a) below for further explanation) 97.20% of Net Assets | | | | | | | | | $ | 25,592,287 | |
| | | | | | | | | | | | | | | | | | |
| | * | | Standard and Poor’s Corporation |
| | @ | | Fitch’s Investors Service |
| | | | All other ratings by Moody’s Investors Service, Inc. |
| | # | | Bond ratings unaudited and not covered by Report of Independent Registered Public Accounting Firm. |
| (a) | | Represents cost for financial reporting and federal income tax purposes and differs from fair value by net unrealized appreciation of securities as follows: |
| | | | | | |
| | | | | | |
| | Unrealized appreciation | | $ | 1,484,489 | |
| | Unrealized depreciation | | | — | |
| | | | | | |
| | Net unrealized appreciation | | $ | 1,484,489 | |
| | | | | | |
Other Information
The following is a summary of the inputs used, as of June 30, 2012, involving the Fund’s investments in securities carried at fair value. The inputs or methodology used for valuing securities may not be an indication of the risk associated with investing in those securities. For more information on valuation inputs, and their aggregation into the levels used the table below, please refer to the Securiity Valuation in the accompanying Notes to Financial Statements.
| | | | | | | | | | | | | | |
| | | Valuation Inputs | | Investment Fund | | | Government Agencies | | | Total | |
| | | | | | | | | | | | | | |
Level 1 | | Quoted Prices | | $ | 639,403 | | | $ | — | | | $ | 639,403 | |
Level 2 | | Other Significant Observable Inputs | | | — | | | | 24,952,884 | | | | 24,952,884 | |
Level 3 | | Significant Unobservable Inputs | | | — | | | | — | | | | — | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | $ | 25,592,287 | |
| | | | | | | | | | | | | | |
The accompanying footnotes are an integral part of the financial statements.
41
INTERMEDIATE GOVERNMENT BOND SERIES
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2012
| | | | | | | | |
ASSETS: | | | | | | | | |
Investments in securities, at fair value (Cost: $24,107,798) | | | | | | $ | 25,592,287 | |
Cash | | | | | | | 1,658 | |
Interest receivable | | | | | | | 268,062 | |
Prepaid expenses | | | | | | | 2,845 | |
| | | | | | | | |
Total assets | | | | | | | 25,864,852 | |
LIABILITIES: | | | | | | | | |
Payable for: | | | | | | | | |
Distributions to shareholders | | | 16,065 | | | | | |
Fund shares redeemed | | | 2,797 | | | | | |
Investment advisory fee | | | 4,249 | | | | | |
Transfer agent fee | | | 5,700 | | | | | |
Accrued expenses | | | 5,782 | | | | | |
| | | | | | | | |
Total liabilities | | | | | | | 34,593 | |
| | | | | | | | |
NET ASSETS: | | | | | | | | |
Capital | | | | | | | 24,431,223 | |
Net accumulated realized loss on investment transactions | | | | | | | (85,453 | ) |
Net unrealized appreciation in value of investments | | | | | | | 1,484,489 | |
| | | | | | | | |
Net assets at value | | | | | | $ | 25,830,259 | |
| | | | | | | | |
NET ASSET VALUE, offering price and redemption price per share
($25,830,259 ÷ 2,440,854 shares outstanding; unlimited number of shares authorized; no par value) | | | | | | $ | 10.58 | |
| | | | | | | | |
STATEMENT OF OPERATIONS
For the year ended June 30, 2012
| | | | |
Net investment income: | | | | |
Interest income | | $ | 970,312 | |
| | | | |
Expenses: | | | | |
Investment advisory fee | | | 51,610 | |
Transfer agent fee | | | 39,362 | |
Custodian expense | | | 8,048 | |
Professional fees | | | 5,672 | |
Printing | | | 10,000 | |
Trustees fees | | | 3,598 | |
Other expenses | | | 14,838 | |
| | | | |
Total expenses | | | 133,128 | |
Custodian expense reduction | | | (95 | ) |
| | | | |
Net expenses | | | 133,033 | |
| | | | |
Net investment income | | | 837,279 | |
| | | | |
Realized and unrealized gain/(loss) on investments: | | | | |
Net realized gain | | | 11,485 | |
Net change in unrealized appreciation/depreciation | | | 1,563,467 | |
| | | | |
Net realized and unrealized gain on investments | | | 1,574,952 | |
| | | | |
Net increase in net assets resulting from operations | | $ | 2,412,231 | |
| | | | |
The accompanying notes are an integral part of the financial statements.
42
INTERMEDIATE GOVERNMENT BOND SERIES
STATEMENTS OF CHANGES IN NET ASSETS
For the years ended June 30, 2012 and 2011
| | | | | | | | |
| | | 2012 | | | 2011 | |
Operations: | | | | | | | | |
Net investment income | | $ | 837,279 | | | $ | 1,125,601 | |
Net realized gain on investments | | | 11,485 | | | | 9,157 | |
Net change in unrealized appreciation/depreciation | | | 1,563,467 | | | | (1,164,961 | ) |
| | | | | | | | |
Net increase/(decrease) in net assets resulting from operations | | | 2,412,231 | | | | (30,203 | ) |
Distributions from net investment income | | | (837,279 | ) | | | (1,125,601 | ) |
Net fund share transactions (Note 4) | | | (748,612 | ) | | | (15,893,548 | ) |
| | | | | | | | |
Total increase | | | 826,340 | | | | (17,049,352 | ) |
Net assets: | | | | | | | | |
Beginning of year | | | 25,003,919 | | | | 42,053,271 | |
| | | | | | | | |
End of year | | $ | 25,830,259 | | | $ | 25,003,919 | |
| | | | | | | | |
FINANCIAL HIGHLIGHTS
| | | | | | | | | | | | | | | | | | | | |
| Selected data for a share outstanding: | | For the years ended June 30, | |
| | | 2012 | | | 2011 | | | 2010 | | | 2009 | | | 2008 | |
Net asset value, beginning of year | | | $9.96 | | | | $10.24 | | | | $10.05 | | | | $9.93 | | | | $9.66 | |
| | | | | | | | | | | | | | | | | | | | |
Income from investment operations: | | | | | | | | | | | | | | | | | | | | |
Net investment income | | | 0.34 | | | | 0.35 | | | | 0.44 | | | | 0.46 | | | | 0.48 | |
Net gains/(losses) on securities, both realized and unrealized | | | 0.62 | | | | (0.28 | ) | | | 0.19 | | | | 0.12 | | | | 0.27 | |
| | | | | | | | | | | | | | | | | | | | |
Total from investment operations | | | 0.96 | | | | 0.07 | | | | 0.63 | | | | 0.58 | | | | 0.75 | |
Less distributions: | | | | | | | | | | | | | | | | | | | | |
Distributions from net investment income | | | (0.34 | ) | | | (0.35 | ) | | | (0.44 | ) | | | (0.46 | ) | | | (0.48 | ) |
| | | | | | | | | | | | | | | | | | | | |
Net asset value, end of year | | | $10.58 | | | | $9.96 | | | | $10.24 | | | | $10.05 | | | | $9.93 | |
| | | | | | | | | | | | | | | | | | | | |
Total return | | | 9.72% | | | | 0.71% | | | | 6.38% | | | | 5.99% | | | | 7.88% | |
Net assets, end of year (in thousands) | | | $25,830 | | | | $25,004 | | | | $42,053 | | | | $25,431 | | | | $23,132 | |
Ratio of net expenses to average net assets (a) | | | 0.52% | | | | 0.46% | | | | 0.47% | | | | 0.47% | | | | 0.49% | |
Ratio of net investment income to average net assets | | | 3.25% | | | | 3.48% | | | | 4.30% | | | | 4.62% | | | | 4.85% | |
Portfolio turnover | | | 8.94% | | | | 72.86% | | | | 56.38% | | | | 30.35% | | | | 33.21% | |
| (a) | | Percentages are after custodian reduction for which no recovery will be sought. Percentages before custodian reduction were: . 52% for 2012; .46% for 2011; .47% for 2010; .49% for 2009, and .51% for 2008. |
The accompanying notes are an integral part of the financial statements.
43
DUPREE MUTUAL FUNDS — TAXABLE MUNICIPAL BOND SERIES | |
SCHEDULE OF PORTFOLIO INVESTMENTS
Taxable Municipal Bonds — 100% of Net Assets
June 30, 2012
| | | | | | | | | | | | | | | | | | |
| Bond Description | | Coupon | | | Maturity
Date | | | Rating# | | Par Value | | | Fair Value | |
| | | | | | | | | | | | | | | | | | |
| INSURED MUNICIPAL BONDS | | | | | | | | | | | | | | | | | | |
| 22.06% of Net Assets | | | | | | | | | | | | | | | | | | |
Armstrong School District PA Build America — Series A | | | 7.000 | % | | | 03/15/2041 | | | AA-* | | $ | 750,000 | | | $ | 873,240 | |
Ashland KY Independent School District Build America | | | 6.200 | | | | 08/01/2029 | | | Aa3 | | | 100,000 | | | | 111,823 | |
Bexar County TX Revenue Bonds Venue Project — Series B | | | 6.980 | | | | 08/15/2032 | | | Aa1/AA+*/A+@ | | | 250,000 | | | | 310,873 | |
Coffee County TN Public Building Authority Build America | | | 7.200 | | | | 06/01/2044 | | | AA-* | | | 350,000 | | | | 403,633 | |
Davie FL Water & Sewer Revenue Build America | | | 6.849 | | | | 10/01/2040 | | | Aa3/AA-* | | | 40,000 | | | | 46,866 | |
Decatur GA Urban Redevelopment Agency Revenue Build America | | | 6.920 | | | | 01/01/2038 | | | Aa2/AA+* | | | 150,000 | | | | 166,898 | |
Lincoln AL Build America Bonds Recovery Zone Economic Development | | | 6.800 | | | | 06/01/2040 | | | AA-* | | | 500,000 | | | | 541,925 | |
Mesa State College CO Auxiliary Facilities Build America | | | 6.746 | | | | 05/15/2042 | | | Aa2/AA-* | | | 100,000 | | | | 132,266 | |
North Fort Bend Water Authority TX Water System Revenue | | | 6.018 | | | | 12/15/2035 | | | Aa3/AA-*/A+@ | | | 250,000 | | | | 278,128 | |
Scottsboro AL Build America | | | 6.400 | | | | 11/01/2040 | | | Aa3/AA-* | | | 250,000 | | | | 282,333 | |
Selma AL Taxable Pension Obligation Warrants | | | 5.820 | | | | 07/01/2031 | | | AA-* | | | 350,000 | | | | 390,485 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 3,538,470 | |
| GENERAL OBLIGATION BONDS | | | | | | | | | | | | | | | | | | |
| 18.44% of Net Assets | | | | | | | | | | | | | | | | | | |
Carroll TX Independent School District Build America | | | 6.676 | | | | 02/15/2034 | | | Aa2/AA+* | | | 100,000 | | | | 114,874 | |
Circleville OH City School District Build America | | | 6.300 | | | | 11/01/2040 | | | Aa2 | | | 100,000 | | | | 117,471 | |
East Bethel MN Build America Bonds Utilities — Series B | | | 7.000 | | | | 02/01/2040 | | | Aa3 | | | 250,000 | | | | 300,225 | |
Edgewood OH City School District Build America | | | 7.500 | | | | 12/01/2037 | | | Aa3/A+* | | | 100,000 | | | | 120,145 | |
Jefferson County TN Build America | | | 6.625 | | | | 06/01/2040 | | | Aa3/A+* | | | 250,000 | | | | 287,500 | |
Montgomery AL Build America Recovery Zone Economic | | | 5.600 | | | | 02/01/2035 | | | Aa2/AA+* | | | 500,000 | | | | 554,315 | |
New York NY Build America | | | 5.968 | | | | 03/01/2036 | | | Aa2/AA*/AA@ | | | 100,000 | | | | 124,099 | |
Pigeon Forge TN Build America Recovery Zone Economic | | | 7.125 | | | | 06/01/2040 | | | AA* | | | 300,000 | | | | 380,931 | |
Sarasota County FL Capital Improvement Revenue Build America | | | 7.016 | | | | 10/01/2040 | | | AA+*/AA+@ | | | 710,000 | | | | 850,942 | |
Talladega County AL Build America Recovery Zone | | | 5.600 | | | | 04/01/2040 | | | Aa3 | | | 100,000 | | | | 107,329 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 2,957,831 | |
| CERTIFICATES OF PARTICIPATION BONDS (UNINSURED) | | | | | | | | | | | | | | | | | | |
| 17.92% of Net Assets | | | | | | | | | | | | | | | | | | |
CO State Building Excellent Schools Today Certificates of Participation | | | 7.017 | | | | 03/15/2031 | | | Aa2/AA-* | | | 400,000 | | | | 461,564 | |
Colorado State Certificates of Participation Build America | | | 6.450 | | | | 09/15/2039 | | | Aa2/AA-* | | | 50,000 | | | | 57,359 | |
Denver County Public Schools Certificates of Participation | | | 7.017 | | | | 12/15/2037 | | | Aa3/A+* | | | 140,000 | | | | 179,210 | |
Grand Junction CO Certificates of Participation Build America | | | 7.500 | | | | 12/01/2030 | | | A+* | | | 500,000 | | | | 597,960 | |
Grand Junction CO Certificates of Participation Build America | | | 7.650 | | | | 12/01/2040 | | | A+* | | | 50,000 | | | | 58,788 | |
Las Vegas NV Certificates of Participation | | | 7.800 | | | | 09/01/2039 | | | Aa3/AA-*/AA-@ | | | 60,000 | | | | 71,409 | |
Pennington County SD Certificates of Participation Build America | | | 7.200 | | | | 06/01/2037 | | | Aa2 | | | 750,000 | | | | 884,850 | |
Sedalia MO Certificates of Participation Build America | | | 7.300 | | | | 06/01/2035 | | | AA-* | | | 500,000 | | | | 562,950 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 2,874,090 | |
| LEASE REVENUE BONDS | | | | | | | | | | | | | | | | | | |
| 14.93% of Net Assets | | | | | | | | | | | | | | | | | | |
Buncombe County NC Limited Obligation Build America | | | 6.800 | | | | 06/01/2030 | | | Aa2/AA+* | | | 250,000 | | | | 297,118 | |
Downtown Smyrna Development Authority GA | | | 6.900 | | | | 02/01/2035 | | | Aa2/AA+* | | | 250,000 | | | | 282,263 | |
KY State Property & Buildings Build America — Series C | | | 5.921 | | | | 11/01/2030 | | | Aa3/A+*/AA-@ | | | 250,000 | | | | 279,015 | |
Metropolitan Government Nashville & Davidson County TN Build America | | | 7.431 | | | | 07/01/2043 | | | A1/A* | | | 160,000 | | | | 201,190 | |
OK Development Finance Authority Lease Revenue Taxable | | | 5.650 | | | | 06/01/2041 | | | AA*/AA@ | | | 410,000 | | | | 447,466 | |
Omaha NE Sewer Revenue Build America | | | 6.191 | | | | 12/01/2040 | | | Aa2/AA* | | | 400,000 | | | | 432,972 | |
West Knox Utilities District Knox County TN Water & Sewer | | | 6.900 | | | | 06/01/2040 | | | AA+* | | | 400,000 | | | | 454,827 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 2,394,851 | |
| MUNICIPAL UTILITY REVENUE BONDS | | | | | | | | | | | | | | | | | | |
| 11.22% of Net Assets | | | | | | | | | | | | | | | | | | |
Altoona PA Water Authority Sewer Revenue Build America | | | 7.064 | | | | 12/01/2040 | | | AA-* | | | 500,000 | | | | 569,465 | |
Gainesville FL Utilities System Revenue Build America | | | 6.024 | | | | 10/01/2040 | | | Aa2/AA*/AA@ | | | 250,000 | | | | 309,635 | |
Heber Light & Power Company UT Electric Revenue Build America | | | 7.000 | | | | 12/15/2030 | | | Aa3/AA-@ | | | 500,000 | | | | 541,395 | |
Metropolitan Government Nashville & Davidson County TN Water | | | 6.693 | | | | 07/01/2041 | | | Aa3/AA-* | | | 200,000 | | | | 268,254 | |
York County VA Sewer Revenue Build America | | | 6.607 | | | | 06/01/2040 | | | Aa3 | | | 100,000 | | | | 111,856 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 1,800,605 | |
The accompanying footnotes are an integral part of the financial statements.
44
DUPREE MUTUAL FUNDS — TAXABLE MUNICIPAL BOND SERIES | |
SCHEDULE OF PORTFOLIO INVESTMENTS
Taxable Municipal Bonds — 100% of Net Assets
June 30, 2012
| | | | | | | | | | | | | | | | | | |
| Bond Description | | Coupon | | | Maturity
Date | | | Rating# | | Par Value | | | Fair Value | |
| | | | | | | | | | | | | | | | | | |
| PUBLIC FACILITIES REVENUE BONDS | | | | | | | | | | | | | | | | | | |
| 5.97% of Net Assets | | | | | | | | | | | | | | | | | | |
Dallas Convention Center Hotel Development Corporation | | | 7.088 | % | | | 01/01/2042 | | | A1/A+* | | $ | 210,000 | | | $ | 251,053 | |
Franklin County OH Convention Facilities Authority Build America | | | 6.540 | | | | 12/01/2036 | | | Aa2/AA* | | | 390,000 | | | | 458,773 | |
Metro Government Nashville & Davidson County TN Sports | | | 5.231 | | | | 07/01/2033 | | | Aa2/AA-* | | | 100,000 | | | | 106,584 | |
Metropolitan Government Nashville & Davidson County TN | | | 6.731 | | | | 07/01/2043 | | | Aa2/A* | | | 125,000 | | | | 141,261 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 957,671 | |
| UNIVERSITY CONSOLIDATED EDUCATION AND BUILDING REVENUE BONDS | |
| 3.92% of Net Assets | | | | | | | | | | | | | | | | | | |
Maine Health & Higher Educational Facilities Authority | | | 6.667 | | | | 07/01/2039 | | | Aa2 | | | 200,000 | | | | 242,316 | |
University NC Chapel Hill Hospital Revenue Build America | | | 6.329 | | | | 02/01/2031 | | | Aa3/AA* | | | 250,000 | | | | 280,935 | |
University NC Wilmington Revenue Build America | | | 5.870 | | | | 01/01/2035 | | | A1 | | | 100,000 | | | | 105,773 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 629,024 | |
| TURNPIKE ROAD REVENUE | | | | | | | | | | | | | | | | | | |
| 2.15% of Net Assets | | | | | | | | | | | | | | | | | | |
FL State Turnpike Authority Turnpike Revenue Build America | | | 6.800 | | | | 07/01/2039 | | | Aa1/AA-*/AA-@ | | | 300,000 | | | | 344,562 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 344,562 | |
| STATE AND LOCAL MORTGAGE REVENUE BONDS | | | | | | | | | | | | | | | | | | |
| 1.98% of Net Assets | | | | | | | | | | | | | | | | | | |
Virginia State Housing Development Authority Taxable Rental | | | 5.251 | | | | 01/01/2039 | | | Aa1/AA+* | | | 300,000 | | | | 317,898 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 317,898 | |
| | | | | | | | | | | | | | | | | | |
Total Investments (cost $14,081,414) (See (a) below for further explanation) 98.59% of Net Assets | | | | | | | | | $ | 15,815,002 | |
| | | | | | | | | | | | | | | | | | |
| | * | | Standard and Poor’s Corporation |
| | @ | | Fitch’s Investors Service |
| | | | (All other ratings by Moody’s Investors Service, Inc.) |
| | # | | Bond ratings are unaudited and not covered by Report of Independent Registered Public Accounting Firm. |
| (a) | | Represents cost for financial reporting and federal income tax purposes and differs from fair value by net unrealized appreciation of securities as follows: |
| | | | | | |
| | | | | | |
| | Unrealized appreciation | | $ | 1,745,159 | |
| | Unrealized depreciation | | | (11,571 | ) |
| | | | | | |
| | Net unrealized appreciation | | $ | 1,733,588 | |
| | | | | | |
Other Information
The following is a summary of the inputs used, as of June 30, 2012, involving the Fund’s investments in securities carried at fair value. The inputs or methodology used for valuing securities may not be an indication of the risk associated with investing in those securities. For more information on valuation inputs, and their aggregation into the levels used the table below, please refer to the Security Valuation section in the accompanying Notes to Financial Statements.
| | | | | | |
| | | | | | |
| | | Valuation Inputs | | Municipal Bonds | |
Level 1 | | Quoted Prices | | $ | — | |
Level 2 | | Other Significant Observable Inputs | | | 15,815,002 | |
Level 3 | | Significant Unobservable Inputs | | | — | |
| | | | | | |
| | | | $ | 15,815,002 | |
| | | | | | |
The accompanying footnotes are an integral part of the financial statements.
45
TAXABLE MUNICIPAL BOND SERIES
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2012
| | | | | | | | |
ASSETS: | | | | | | | | |
Investments in securities, at fair value (Cost: $14,081,414) | | | | | | $ | 15,815,002 | |
Cash | | | | | | | 126,448 | |
Interest receivable | | | | | | | 199,947 | |
Prepaid expenses | | | | | | | 5,261 | |
| | | | | | | | |
Total assets | | | | | | | 16,146,658 | |
LIABILITIES: | | | | | | | | |
Payable for: | | | | | | | | |
Investments purchased | | | 60,751 | | | | | |
Distributions to shareholders | | | 34,588 | | | | | |
Investment advisory fee | | | 6,458 | | | | | |
Transfer agent fee | | | 1,949 | | | | | |
Trustees fees | | | 580 | | | | | |
| | | | | | | | |
Total liabilities | | | | | | | 104,326 | |
| | | | | | | | |
NET ASSETS: | | | | | | | | |
Capital | | | | | | | 14,329,637 | |
Accumulated net investment income | | | | | | | 217 | |
Net accumulated realized loss on investment transactions | | | | | | | (21,110 | ) |
Net unrealized appreciation in value of investments | | | | | | | 1,733,588 | |
| | | | | | | | |
Net assets at value | | | | | | $ | 16,042,332 | |
| | | | | | | | |
NET ASSET VALUE, offering price and redemption price per share
($16,042,332 ÷ 1,482,662 shares outstanding; unlimited number of shares authorized; no par value) | | | | | | $ | 10.82 | |
| | | | | | | | |
STATEMENT OF OPERATIONS
For year ended June 30, 2012
| | | | |
Net investment income: | | | | |
Interest income | | $ | 816,273 | |
| | | | |
Expenses: | | | | |
Investment advisory fee | | | 70,687 | |
Transfer agent fee | | | 21,326 | |
Custodian expense | | | 5,342 | |
Professional fees | | | 3,428 | |
Pricing | | | 8,000 | |
Trustees fees | | | 1,933 | |
Other expenses | | | 9,678 | |
| | | | |
Total expenses | | | 120,394 | |
Fees waived by Adviser | | | (943 | ) |
Custodian expense reduction | | | (58 | ) |
| | | | |
Net expenses | | | 119,393 | |
| | | | |
Net investment income | | | 696,880 | |
| | | | |
Realized and unrealized gain/loss on investments: | | | | |
Net change in unrealized appreciation/depreciation | | | 1,483,917 | |
| | | | |
Net realized and unrealized gain on investments | | | 1,483,917 | |
| | | | |
Net increase in net assets resulting from operations | | $ | 2,180,797 | |
| | | | |
The accompanying notes are an integral part of the financial statements.
46
TAXABLE MUNICIPAL BOND SERIES
STATEMENT OF CHANGES IN NET ASSETS
For the year ended June 30, 2012 and the period ended June 30, 2011*
| | | | | | | | |
| | | 2012 | | | 2011* | |
Operations: | | | | | | | | |
Net investment income | | $ | 696,880 | | | $ | 457,937 | |
Net realized gain/(loss) on investments | | | — | | | | (21,110 | ) |
Net change in unrealized appreciation/depreciation | | | 1,483,917 | | | | 249,671 | |
| | | | | | | | |
Net increase in net assets resulting from operations | | | 2,180,797 | | | | 686,498 | |
Distributions from net investment income | | | (696,663 | ) | | | (457,937 | ) |
Net fund share transactions (Note 4) | | | 3,686,285 | | | | 10,643,352 | |
| | | | | | | | |
Total increase | | | 5,170,419 | | | | 10,871,913 | |
Net assets: | | | | | | | | |
Beginning of period | | | 10,871,913 | | | | — | |
End of period | | $ | 16,042,332 | | | $ | 10,871,913 | |
| | | | | | | | |
Accumulated net investment income | | $ | 217 | | | $ | — | |
| | | | | | | | |
FINANCIAL HIGHLIGHTS
| | | | | | | | |
| Selected data for a share outstanding: | | For the year ended
June 30, 2012 | | | For the period ended
June 30, 2011* | |
Net asset value, beginning of period | | | $9.65 | | | | $10.00 | |
| | | | | | | | |
Income from investment operations: | | | | | | | | |
Net investment income | | | 0.52 | | | | 0.34 | |
Net gains/(losses) on securities, both realized and unrealized | | | 1.17 | | | | (0.35 | ) |
| | | | | | | | |
Total from investment operations | | | 1.69 | | | | (0.01 | ) |
Less distributions: | | | | | | | | |
Distributions from net investment income | | | (0.52 | ) | | | (0.34 | ) |
| | | | | | | | |
Net asset value, end of period | | | $10.82 | | | | $9.65 | |
| | | | | | | | |
Total return | | | 17.77% | | | | 0.04% | (b) |
Net assets, end of period (in thousands) | | | $16,042 | | | | $10,872 | |
Ratio of net expenses to average net assets (a) | | | 0.85% | | | | 0.49% | (c) |
Ratio of net investment income to average net assets | | | 4.95% | | | | 3.71% | (c) |
Portfolio turnover | | | 0.00% | | | | 89.93% | (c) |
| (a) | | Percentages are after expense waivers and reductions by the Adviser and Custodian. The Adviser and Custodian have agreed not to seek recovery of these waivers and reductions. |
| | | Expenses waived by the Adviser and expense reductions by the Custodian were as follows: |
| | | | | | | | |
| Adviser | | | Custodian | | | |
| | .01% | (c) | | | 0% | (c) | | For the period ended June 30, 2011* |
| | .01% | | | | 0% | | | For the year ended June 30, 2012 |
| * | | Represents the period from commencement of operations (November 1, 2010) through June 30, 2011. |
The accompanying notes are an integral part of the financial statements.
47
NOTES TO FINANCIAL STATEMENTS
June 30, 2012
| 1. | | Organization and Significant Accounting Policies |
Dupree Mutual Funds is registered under the Investment Company Act of 1940, as amended, as a no-load, open-end investment company. The Declaration of Trust of Dupree Mutual Funds (the “Trust”) permits the Trustees to create an unlimited number of series of investment portfolios (each a “Fund” and collectively the “Funds”) and with respect to each series to issue an unlimited number of full or fractional shares of a single class. The Trust currently offers ten series:
Alabama Tax-Free Income Series
Kentucky Tax-Free Income Series
Kentucky Tax-Free Short-to-Medium Series
Mississippi Tax-Free Income Series
North Carolina Tax-Free Income Series
North Carolina Tax-Free Short-to-Medium Series
Tennessee Tax-Free Income Series
Tennessee Tax-Free Short-to-Medium Series
Intermediate Government Bond Series
Taxable Municipal Bond Series
The investment strategy of the eight state tax-free funds is to maintain 100% of their investments in their respective states of Alabama, Kentucky, Mississippi, North Carolina, or Tennessee municipal securities.
The Intermediate Government Bond Series’ investment strategy is to invest only in obligations of the U.S. Treasury and Agencies of the U.S. Government. The Intermediate Government Bond Series will buy bonds and notes that will maintain an average maturity of no more than ten years.
The Taxable Municipal Bond Series’ investment strategy is to invest in taxable municipal bonds of investment grade quality.
The following is a summary of significant accounting policies consistently followed by the Funds in the preparation of their financial statements. The policies are in conformity with accounting principles generally accepted in the United States.
Securities held by the Intermediate Government Bond Series and the Taxable Municipal Bond Series are valued using market quotations as provided by an independent pricing service. Securities held by the eight state tax-free funds are valued as determined in good faith in accordance with consistently applied procedures established by and under the general supervision of the Board of Trustees. These procedures involve the use of a matrix pricing model which takes into consideration price quotations or appraisals for these securities, yield, stability, risk, quality, coupon rate, maturity, type of issue, trading characteristics, special circumstances of a security or trading market, and any other factors or market data considered relevant in determining the value. The procedures also include weekly verification of market quotations provided by two independent pricing services. A bond valuation that is not supported by a valuation source requires management to fair value the security in consultation with the Board’s Valuation committee. Shares of open-end mutual funds in which the Funds invest are valued at their respective net asset values as reported by the underlying funds.
The Funds have adopted the provisions of Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 820, “Fair Value Measurements and Disclosures”. ASC 820 establishes a hierarchy that prioritizes the inputs to valuation techniques giving the highest priority to readily available unadjusted quoted prices in active markets for
48
NOTES TO FINANCIAL STATEMENTS
June 30, 2012
| 1. | | Organization and Significant Accounting Policies, continued |
identical assets (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements) when market prices are not readily available or reliable. The three levels of the hierarchy under ASC 820 are described as follows:
| | |
| Level 1: | | Quoted prices in active markets for identical securities. |
| Level 2: | | Prices determined using other significant observable inputs. Observable inputs are inputs that other market participants may use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk and others. |
| Level 3: | | Price determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable or deemed less relevant (for example, where there is little or not market activity for an investment at the end of the period), unobservable inputs may be used. Unobservable inputs reflect the Fund’s own assumptions about the factors market participants would use in pricing an investment, and would be based on the best information available. |
The aggregate value by input level, as of June 30, 2012, for the Funds’ investments is included at the end of the Funds’ Schedules of Portfolio Investments. The Funds recognized transfers at the end of the reporting period. There were no transfers in and out of level 1, 2 or 3 during the period ending June 30, 2012.
Security transactions are accounted for on a trade date basis. Gains and losses on securities sold are determined on an identified cost basis.
Interest income, which includes the amortization of premiums and the accretion of discounts, is recorded on an accrual basis.
| | D. | When-Issued and Extended Settlement Securities |
The Funds may purchase securities with delivery or payment to occur at a later date. At the time the Funds enter 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 value of the security may vary with market fluctuations. No interest accrues to the Funds until the security is delivered and payment takes place. At the time the Funds enter this type of transaction, they are required to segregate cash or other liquid assets equal to the value of the securities purchased.
It is each Fund’s policy to qualify as a regulated investment company by complying with the requirements of the Internal Revenue Code (the “code”) applicable to regulated investment companies, including the distribution of all or substantially all taxable and tax-exempt income to their shareholders. The Funds have met the requirements of the code applicable to regulated investment companies for the year ended June 30, 2012. Therefore, no federal income tax provision is required. Management of the Funds has concluded that there are no uncertain tax provisions that would require recognition in the financial statements. Generally, the tax authorities can examine all the tax returns for the last three years.
Substantially all of the net investment income of the Funds is declared as a dividend to shareholders of record as of the close of business each day. Distributions are payable in cash or in additional shares at the net asset value on the payable date. Distributions are determined in accordance with income tax regulations.
49
NOTES TO FINANCIAL STATEMENTS
June 30, 2012
| 1. | | Organization and Significant Accounting Policies, continued |
Distributions are payable:
| | |
| Monthly for: | | Kentucky Tax-Free Short-to-Medium Series |
| | North Carolina Tax-Free Short-to-Medium Series |
| | Tennessee Tax-Free Short-to-Medium Series |
| | Intermediate Government Bond Series |
| | Taxable Municipal Bond Series |
| |
| Quarterly for: | | Alabama Tax-Free Income Series |
| | Kentucky Tax-Free Income Series |
| | Mississippi Tax-Free Income Series |
| | North Carolina Tax-Free Income Series |
| | Tennessee Tax-Free Income Series |
The preparation of financial statements in conformity with generally accepted accounting principles in the United States requires management to make estimates and assumptions that affect the reported amounts and disclosures. Actual amounts could differ from those estimates.
Subsequent events occurring after the date of this report have been evaluated for potential impact to this report through the date the financial statements were issued. There were no subsequent events to report that would have a material impact on the Funds’ financial statements.
| 2. | | Investment Advisory Fee and Other Transactions with Affiliates |
Subject to the direction of the Trustees, Dupree & Company, Inc. (the Adviser) is responsible for the management of the Funds’ portfolios. Under the terms of the Investment Advisory Agreements, for the Alabama, Kentucky, Mississippi, North Carolina, Tennessee, and the Taxable Municipal Bond Series, the Funds have agreed to pay to the Adviser as compensation for all services rendered, facilities furnished and expenses paid or assumed by it under the Agreements, a fee at the annual rate of .50 of 1% of the first $100,000,000 average daily net assets of each Fund determined separately; .45 of 1% of the average daily net assets between $100,000,001 and $150,000,000 of each Fund determined separately; .40 of 1% of the average daily net assets between $150,000,001 and $500,000,000 of each Fund determined separately; .35 of 1% of the average daily net assets between $500,000,001 and 750,000,000; and .30 of 1% of the average daily net assets between $750,000,001 and 1,000,000,000; and .25 of 1% of the average daily net assets in excess of $1,000,000,000. For the Intermediate Government Bond Series, the Fund has agreed to pay to the Adviser, as compensation for all services rendered, facilities furnished and expenses paid or assumed by it under the Agreement, a fee at the annual rate of .20 of 1% of average daily net assets. Prior to March 1, 2011 the Alabama, Kentucky, Mississippi, North Carolina, Tennessee, and the Taxable Municipal Bond
Series, paid to the Adviser as compensation for all services rendered, facilities furnished and expenses paid or assumed by it under the Agreements, a fee at the annual rate of .50 of 1% of the first $100,000,000 average daily net assets of each Fund determined separately; .45 of 1% of the average daily net assets between $100,000,001 and $150,000,000 of each Fund determined separately; .40 of 1% of the average daily net assets between $150,000,001 and $500,000,000 of each Fund determined separately; .35 of 1% of the average daily net assets in excess of $500,000,000.
The Adviser may voluntarily waive investment advisory fees payable to it under the Investment Advisory Agreement with each Fund, and assume and pay other operating expenses. The Adviser will not seek to recoup any waived fees or other operating expenses it has assumed.
For the year ended June 30, 2012, fees voluntarily waived by the Adviser were as follows:
| | | | |
| | | Fees waived by Adviser | |
Alabama Tax-Free Income Series | | $ | 22,407 | |
Mississippi Tax-Free Income Series | | | 18,832 | |
Taxable Municipal Bond Series | | | 943 | |
50
NOTES TO FINANCIAL STATEMENTS
June 30, 2012
| 2. | | Investment Advisory Fee and Other Transactions with Affiliates, continued |
In addition, each Fund has entered into a Shareholder Service Agreement with Dupree & Company, Inc, the Funds’ transfer agent. The agreement provides for a fee computed on the average daily net asset value at the annual rate of .15 of 1% on the first $20,000,000 of average net assets and .12 of 1% of all amounts in excess of $20,000,000 of average net assets for each Fund.
| 3. | | Purchases and Sales of Securities |
During the year ended June 30, 2012, the cost of purchases and the proceeds from sales/calls and maturities of securities (excluding short-term securities and U.S. government obligations, except for the Intermediate Government Bond Series which are all U.S. government obligations) for each of the Funds were as follows:
| | | | | | | | |
| | | Purchases | | | Sales/Calls | |
Alabama Tax-Free Income Series | | $ | 2,672,953 | | | $ | 1,674,509 | |
Kentucky Tax-Free Income Series | | | 119,502,649 | | | | 78,671,257 | |
Kentucky Tax-Free Short-to-Medium Series | | | 19,494,666 | | | | 3,996,848 | |
Mississippi Tax-Free Income Series | | | 1,606,668 | | | | 685,296 | |
North Carolina Tax-Free Income Series | | | 13,958,939 | | | | 4,728,401 | |
North Carolina Tax-Free Short-to-Medium Series | | | 4,954,654 | | | | 2,801,794 | |
Tennessee Tax-Free Income Series | | | 13,445,033 | | | | 7,969,883 | |
Tennessee Tax-Free Short-to-Medium Series | | | 2,483,656 | | | | 190,000 | |
Intermediate Government Bond Series | | | 2,247,125 | | | | 3,191,580 | |
Taxable Municipal Bond Series | | | 3,722,156 | | | | — | |
At June 30, 2012 and 2011, there were an unlimited number of shares of beneficial interest authorized. Transactions in capital shares were as follows:
| | | | | | | | | | | | | | | | |
| ALABAMA TAX-FREE INCOME SERIES | | Year Ended June 30, 2012 | | | Year Ended June 30, 2011 | |
| | | SHARES | | | AMOUNT | | | SHARES | | | AMOUNT | |
Shares sold | | | 188,379 | | | $ | 2,308,608 | | | | 295,284 | | | $ | 3,467,858 | |
Shares reinvested | | | 32,781 | | | | 400,946 | | | | 38,791 | | | | 451,997 | |
Shares redeemed | | | (186,821 | ) | | | (2,255,059 | ) | | | (208,099 | ) | | | (2,429,265 | ) |
Net increase | | | 34,339 | | | $ | 454,495 | | | | 125,976 | | | $ | 1,490,590 | |
| | | | | | | | | | | | | | | | |
| KENTUCKY TAX-FREE INCOME SERIES | | Year Ended June 30, 2012 | | | Year Ended June 30, 2011 | |
| | | SHARES | | | AMOUNT | | | SHARES | | | AMOUNT | |
Shares sold | | | 12,628,466 | | | $ | 99,622,755 | | | | 15,874,005 | | | $ | 20,805,735 | |
Shares reinvested | | | 2,824,157 | | | | 22,312,335 | | | | 2,782,785 | | | | 21,133,737 | |
Shares redeemed | | | (9,118,696 | ) | | | (71,877,445 | ) | | | (16,316,268 | ) | | | (124,100,438 | ) |
Net increase | | | 6,333,927 | | | $ | 50,057,645 | | | | 2,340,522 | | | $ | 17,839,034 | |
| | | | | | | | | | | | | | | | |
KENTUCKY TAX-FREE
SHORT-TO-MEDIUM SERIES | | Year Ended June 30, 2012 | | | Year Ended June 30, 2011 | |
| | | SHARES | | | AMOUNT | | | SHARES | | | AMOUNT | |
Shares sold | | | 5,461,238 | | | $ | 29,954,333 | | | | 4,446,234 | | | $ | 23,941,652 | |
Shares reinvested | | | 237,712 | | | | 1,312,023 | | | | 218,910 | | | | 1,177,937 | |
Shares redeemed | | | (2,960,612 | ) | | | (16,311,945 | ) | | | (4,149,834 | ) | | | (22,257,404 | ) |
Net increase | | | 2,738,338 | | | $ | 14,954,411 | | | | 515,310 | | | $ | 2,862,184 | |
51
NOTES TO FINANCIAL STATEMENTS
June 30, 2012
| 4. | | Capital Shares, continued |
| | | | | | | | | | | | | | | | |
| MISSISSIPPI TAX-FREE INCOME SERIES | | Year Ended June 30, 2012 | | | Year Ended June 30, 2011 | |
| | | SHARES | | | AMOUNT | | | SHARES | | | AMOUNT | |
Shares sold | | | 108,782 | | | $ | 1,288,526 | | | | 94,828 | | | $ | 1,067,255 | |
Shares reinvested | | | 9,387 | | | | 111,323 | | | | 12,803 | | | | 144,939 | |
Shares redeemed | | | (38,842 | ) | | | (461,594 | ) | | | (99,309 | ) | | | (1,116,014 | ) |
Net increase | | | 79,327 | | | $ | 938,255 | | | | 8,322 | | | $ | 96,180 | |
| | | | | | | | | | | | | | | | |
NORTH CAROLINA TAX-FREE
INCOME SERIES | | Year Ended June 30, 2012 | | | Year Ended June 30, 2011 | |
| | | SHARES | | | AMOUNT | | | SHARES | | | AMOUNT | |
Shares sold | | | 1,601,304 | | | $ | 18,387,740 | | | | 1,255,466 | | | $ | 13,738,763 | |
Shares reinvested | | | 160,526 | | | | 1,834,791 | | | | 175,789 | | | | 1,911,216 | |
Shares redeemed | | | (1,041,946 | ) | | | (11,818,454 | ) | | | (1,537,280 | ) | | | (16,654,703 | ) |
Net increase/(decrease) | | | 719,884 | �� | | $ | 8,404,077 | | | | (106,025 | ) | | $ | (1,004,724 | ) |
| | | | | | | | | | | | | | | | |
NORTH CAROLINA TAX-FREE
SHORT-TO-MEDIUM SERIES | | Year Ended June 30, 2012 | | | Year Ended June 30, 2011 | |
| | | SHARES | | | AMOUNT | | | SHARES | | | AMOUNT | |
Shares sold | | | 448,118 | | | $ | 5,003,359 | | | | 822,857 | | | $ | 8,957,526 | |
Shares reinvested | | | 33,220 | | | | 370,190 | | | | 32,281 | | | | 350,979 | |
Shares redeemed | | | (297,998 | ) | | | (3,305,006 | ) | | | (315,093 | ) | | | (3,432,375 | ) |
Net increase | | | 183,340 | | | $ | 2,068,543 | | | | 540,045 | | | $ | 5,876,130 | |
| | | | | | | | | | | | | | | | |
| TENNESSEE TAX-FREE INCOME SERIES | | Year Ended June 30, 2012 | | | Year Ended June 30, 2011 | |
| | | SHARES | | | AMOUNT | | | SHARES | | | AMOUNT | |
Shares sold | | | 1,125,114 | | | $ | 12,822,015 | | | | 991,217 | | | $ | 10,934,026 | |
Shares reinvested | | | 164,815 | | | | 1,885,305 | | | | 169,356 | | | | 1,860,689 | |
Shares redeemed | | | (899,434 | ) | | | (10,191,015 | ) | | | (1,447,207 | ) | | | (15,808,556 | ) |
Net increase/(decrease) | | | 390,495 | | | $ | 4,516,305 | | | | (286,634 | ) | | $ | (3,013,841 | ) |
| | | | | | | | | | | | | | | | |
TENNESSEE TAX-FREE
SHORT-TO-MEDIUM SERIES | | Year Ended June 30, 2012 | | | Year Ended June 30, 2011 | |
| | | SHARES | | | AMOUNT | | | SHARES | | | AMOUNT | |
Shares sold | | | 244,908 | | | $ | 2,694,660 | | | | 261,014 | | | $ | 2,830,609 | |
Shares reinvested | | | 14,132 | | | | 155,241 | | | | 15,519 | | | | 168,348 | |
Shares redeemed | | | (78,025 | ) | | | (858,073 | ) | | | (300,341 | ) | | | (3,229,548 | ) |
Net increase/(decrease) | | | 181,015 | | | $ | 1,991,828 | | | | (23,808 | ) | | $ | (230,591 | ) |
| | | | | | | | | | | | | | | | |
| INTERMEDIATE GOVERNMENT BOND SERIES | | Year Ended June 30, 2012 | | | Year Ended June 30, 2011 | |
| | | SHARES | | | AMOUNT | | | SHARES | | | AMOUNT | |
Shares sold | | | 175,111 | | | $ | 1,813,245 | | | | 198,575 | | | $ | 1,993,251 | |
Shares reinvested | | | 59,439 | | | | 623,150 | | | | 68,351 | | | | 687,043 | |
Shares redeemed | | | (305,067 | ) | | | (3,185,007 | ) | | | (1,863,726 | ) | | | (18,573,842 | ) |
Net decrease | | | (70,517 | ) | | $ | (748,612 | ) | | | (1,596,800 | ) | | $ | (15,893,548 | ) |
52
NOTES TO FINANCIAL STATEMENTS
June 30, 2012
| 4. | | Capital Shares, continued |
| | | | | | | | | | | | | | | | |
TAXABLE MUNICIPAL
BOND SERIES | | Year Ended June 30, 2012 | | | *Period Ended June 30, 2011 | |
| | | SHARES | | | AMOUNT | | | SHARES | | | AMOUNT | |
Shares sold | | | 340,717 | | | $ | 3,518,945 | | | | 1,831,276 | | | $ | 17,353,159 | |
Shares reinvested | | | 24,087 | | | | 253,910 | | | | 5,247 | | | | 50,193 | |
Shares redeemed | | | (8,234 | ) | | | (86,570 | ) | | | (710,431 | ) | | | (6,760,000 | ) |
Net increase | | | 356,570 | | | $ | 3,686,285 | | | | 1,126,092 | | | $ | 10,643,352 | |
| | * | | Represents the period from commencement of operations (November 1, 2010) through June 30, 2011. |
| 5. | | Concentration of Credit Risk |
The Alabama Tax-Free Income Series, Kentucky Tax-Free Income Series, Kentucky Tax-Free Short-to-Medium Series, Mississippi Tax-Free Income Series, North Carolina Tax-Free Income Series, North Carolina Tax-Free Short-to-Medium Series, Tennessee Tax-Free Income Series, and Tennessee Tax-Free Short-to-Medium Series each invest solely in debt obligations issued by the states of Alabama, Kentucky, Mississippi, North Carolina, and Tennessee, respectively, and their respective political subdivisions, agencies and public authorities to obtain funds for various public purposes. Each of these state-specific Funds is more susceptible to economic and political factors adversely affecting issuers of their states’ respective municipal securities than a fund that is not concentrated in these issuers to the same extent.
On December 22, 2010, the Regulated Investment Company Modernization Act of 2010 (the “Act”) was enacted, which changed various technical rules governing the tax treatment of regulated investment companies. The changes are generally effective for taxable years beginning after the date of enactment. One of the more prominent changes addresses capital loss carryforwards. Under the Act, each Fund will be permitted to carry forward capital losses incurred in taxable years beginning after the date of enactment for an unlimited period. However, any losses incurred during those future taxable years will be required to be utilized prior to the losses incurred in pre-enactment taxable years, which carry an expiration date. As a result of this ordering rule, pre-enactment capital loss carryforwards may be more likely to expire unused. Additionally, post-enactment capital loss carryforwards will retain their character as either short-term or long-term capital losses rather than being considered all short-term as permitted under previous regulation.
Post-effective no expiration long-term capital losses: Mississippi Tax-Free Income Series $22,265
As of June 30, 2012, the Kentucky Tax-Free Short-to-Medium Series, Mississippi Tax-Free Income Series, Tennessee Tax-Free Income Series, Tennessee Tax-Free Short-to-Medium Series, Intermediate Government Bond Series, and the Taxable Municipal Bond Series have capital loss carry-forwards which are available to offset future capital gains, if any. As of June 30, 2012, the Alabama Tax-Free Income Series, Kentucky Tax-Free Income Series, North Carolina Tax-Free Income Series and the North Carolina Tax-Free Short-to-Medium Series do not have any capital loss carry-forwards.
The capital loss carry-forwards expire as follows:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | 2013 | | | 2014 | | | 2015 | | | 2016 | | | 2017 | | | 2018 | | | 2019 | | | Total | |
Kentucky Tax-Free Short-to-Medium Series | | $ | — | | | $ | 43,550 | | | $ | 446,645 | | | $ | 227,932 | | | $ | 223,976 | | | $ | — | | | $ | — | | | $ | 942,103 | |
Tennessee Tax-Free Income Series | | | | | | | — | | | | — | | | | — | | | | — | | | | 621,337 | | | | — | | | | 621,337 | |
Tennessee Tax-Free Short-to-Medium Series | | | — | | | | — | | | | 72,288 | | | | 23,418 | | | | — | | | | — | | | | — | | | | 95,706 | |
Intermediate Government Bond Series | | | 2 | | | | 64,307 | | | | 21,143 | | | | — | | | | — | | | | — | | | | | | | | 85,452 | |
Taxable Municipal Bond Series | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 21,110 | | | | 21,110 | |
53
NOTES TO FINANCIAL STATEMENTS
June 30, 2012
| 6. | | Federal Income Taxes, continued |
During the year ended June 30, 2012, the following Funds utilized capital loss carry-forwards as follows:
| | | | |
| | | Amount | |
Alabama Tax-Free Income Series | | $ | 37,041 | |
Kentucky Tax-Free Short-to-Medium Series | | | 88,570 | |
North Carolina Tax-Free Income Series | | | 138,890 | |
North Carolina Tax-Free Short-to-Medium Series | | | 46,841 | |
Tennessee Tax-Free Income Series | | | 202,311 | |
Tennessee Tax-Free Short-to-Medium Series | | | 214 | |
Intermediate Government Bond Series | | | 7,792 | |
During the year ended June 30, 2012 the Mississippi Tax-Free Income Series had expiration of a capital loss carry forward of $16,068.
Capital losses incurred after October 31 (“Post-October” losses) within the taxable year are deemed to arise on the first business day of the Funds’ next taxable year. The following Funds incurred and will elect to defer net capital losses during the fiscal year 2012 as follows:
| | | | |
| | | Post October Losses | |
Tennessee Tax-Free Short-to-Medium Series | | $ | (302 | ) |
At June 30, 2012, the effect of permanent book to tax differences resulted in increases and decreases to the components of net assets as follows:
| | | | | | | | | | | | |
| | | Accumulated Net
Investment Income | | | Accumulated Net
Realized Losses | | | Capital | |
Mississippi Tax-Free Income Series | | $ | 16,068 | | | $ | (16,068 | ) | | $ | — | |
Intermediate Government Bond Series | | | — | | | | 28,054 | | | | (28,054 | ) |
The tax character of distributions paid for the periods ended June 30, 2012 and 2011 were as follows:
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | 2012 | | | 2011 | |
| | | Tax
Exempt
Income | | | Ordinary
Income | | | Long-Term
Capital
Gain | | | Tax
Exempt
Income | | | Ordinary
Income | | | Long-Term
Capital
Gain | |
Alabama Tax-Free Income Series | | $ | 781,226 | | | $ | — | | | $ | 12,037 | | | $ | 774,546 | | | $ | — | | | $ | — | |
Kentucky Tax-Free Income Series | | | 34,105,207 | | | | 58,958 | | | | 3,685,303 | | | | 33,202,621 | | | | 3,723 | | | | 2,192,264 | |
Kentucky Tax-Free
Short-to-Medium Series | | | 1,911,427 | | | | — | | | | — | | | | 1,714,591 | | | | — | | | | — | |
Mississippi Tax-Free Income Series | | | 235,664 | | | | — | | | | 16,068 | | | | 242,439 | | | | — | | | | — | |
North Carolina Tax-Free Income Series | | | 2,780,923 | | | | — | | | | — | | | | 2,813,638 | | | | — | | | | — | |
North Carolina Tax-Free
Short-to-Medium Series | | | 495,128 | | | | — | | | | — | | | | 457,012 | | | | — | | | | — | |
Tennessee Tax-Free Income Series | | | 3,364,028 | | | | — | | | | — | | | | 3,451,031 | | | | — | | | | — | |
Tennessee Tax-Free
Short-to-Medium Series | | | 230,540 | | | | — | | | | — | | | | 249,321 | | | | — | | | | — | |
Intermediate Government Bond Series | | | — | | | | 837,279 | | | | — | | | | — | | | | 1,125,601 | | | | — | |
Taxable Municipal Bond Series | | | — | | | | 696,663 | | | | — | | | | — | | | | 457,937 | | | | — | |
54
NOTES TO FINANCIAL STATEMENTS
June 30, 2012
| 6. | | Federal Income Taxes, continued |
At June 30, 2012, the Fund’s components of distributable earnings (accumulated losses) on a tax basis were as follows:
| | | | | | | | | | | | | | | | |
| | | Undistributed
Ordinary
Income | | | Undistributed
Tax Exempt
Income | | | Undistributed Net
Long Term
Capital Gain | | | Net Unrealized
Appreciation/
Depreciation
Investments | |
Alabama Tax-Free Income | | $ | — | | | $ | 98,883 | | | $ | 15,769 | | | $ | 1,341,821 | |
Kentucky Tax-Free Income | | | 37,796 | | | | 3,531,740 | | | | 41,247 | | | | 69,292,400 | |
Kentucky Tax-Free Short-to-Medium | | | — | | | | 44,838 | | | | | | | | 5,013,549 | |
Mississippi Tax-Free Income | | | — | | | | 52,001 | | | | | | | | 434,846 | |
North Carolina Tax-Free Income | | | — | | | | 224,371 | | | | 131,685 | | | | 4,906,703 | |
North Carolina Tax-Free Short-to-Medium | | | — | | | | 8,731 | | | | 31,376 | | | | 1,158,054 | |
Tennessee Tax-Free Income | | | — | | | | 360,503 | | | | | | | | 5,604,574 | |
Tennessee Tax-Free Short-to-Medium | | | — | | | | 5,996 | | | | | | | | 297,847 | |
Intermediate Government Bond | | | 16,063 | | | | | | | | | | | | 1,484,489 | |
Taxable Municipal Bond Series | | | 34,805 | | | | | | | | | | | | 1,733,588 | |
| | | | | | | | | | | | |
| | | Accumulated
Capital and
Other Losses | | | Other
Temporary
Differences | | | Total
Accumulated Earnings | |
Alabama Tax-Free Income | | | | | | $ | (98,460 | ) | | $ | 1,358,013 | |
Kentucky Tax-Free Income | | | | | | | (3,484,260 | ) | | | 69,418,923 | |
Kentucky Tax-Free Short-to-Medium | | $ | (942,103 | ) | | | (44,839 | ) | | | 4,071,445 | |
Mississippi Tax-Free Income | | | (22,265 | ) | | | (35,727 | ) | | | 428,855 | |
North Carolina Tax-Free Income | | | | | | | (220,966 | ) | | | 5,041,793 | |
North Carolina Tax-Free Short-to-Medium | | | | | | | (8,731 | ) | | | 1,189,430 | |
Tennessee Tax-Free Income | | | (621,337 | ) | | | (360,504 | ) | | | 4,983,236 | |
Tennessee Tax-Free Short-to-Medium | | | (96,008 | ) | | | (5,996 | ) | | | 201,839 | |
Intermediate Government Bond | | | (85,452 | ) | | | (16,064 | ) | | | 1,399,036 | |
Taxable Municipal Bond Series | | | (21,110 | ) | | | (34,588 | ) | | | 1,712,695 | |
| 7. | | Contingencies and Commitments |
The Funds indemnify the Trust’s officers and Trustees for certain liabilities that might arise from their performance of their duties to the Funds. Additionally, in the normal course of business, the Funds enter into contracts that contain a variety of representations and warranties and which may provide for indemnification. The Funds’ maximum exposure under these arrangements is unknown, as this would involve predicting future claims that may be made against the Funds, if any, that have not yet occurred. However, based on experience, the Funds expect the risk of loss to be immaterial.
| 8. | | Line of Credit Agreement and Custodian Agreement |
Under the terms of an agreement with the Funds’ custodian, principal amounts up to 5% of a Fund’s net assets are available on an uncommitted line of credit. The principal amounts borrowed are due on demand. The agreement expires on September 30, 2012, but may be renewed annually. Interest is payable based on the published prime rate of the bank. Securities with a minimum value of three times the loan proceeds will be assigned as collateral until the balance of the note and unpaid interest is paid in full and terminated.
55
NOTES TO FINANCIAL STATEMENTS
June 30, 2012
| 8. | | Line of Credit Agreement and Custodian Agreement, continued |
At June 30, 2012 the Funds had an unused line of credit amount of $24,997,000. During the year ended June 30, 2012, the average interest rate on borrowings was 3.25% and the daily weighted average borrowings for each Fund were as follows:
| | | | |
| | | Weighted
Average Borrowings | |
Alabama Tax-Free Income Series | | $ | 954 | |
Kentucky Tax Free Income Series | | | 32,948 | |
Kentucky Tax-Free Short-to-Medium Series | | | 3,388 | |
Mississippi Tax-Free Income Series | | | — | |
North Carolina Tax-Free Income Series | | | 6,186 | |
North Carolina Tax-Free Short-to-Medium Series | | | 8,142 | |
Tennessee Tax-Free Income Series | | | 9,770 | |
Tennessee Tax-Free Short-to-Medium Series | | | 16 | |
Taxable Municipal Bond Series | | | — | |
Intermediate Government Bond Series | | | 683 | |
The Funds have a contractual agreement with the custodian whereby the Funds compensate the custodian for custodial services incurred exceeding the credits realized as a result of uninvested cash balances. Credits realized as a result of uninvested cash balances are used to reduce each Fund’s expenses. During the year, these credits reduced each of Funds’ expenses by the amount shown on the Statement of Operation as “Custodian expense reduction.”
56
Report of Independent Registered Public Accounting Firm
To the Shareholders and Board of Trustees of
Dupree Mutual Funds
We have audited the accompanying statements of assets and liabilities, including the schedules of portfolio investments, of Dupree Mutual Funds, comprised of Alabama Tax-Free Income Series, Kentucky Tax-Free Income Series, Kentucky Tax-Free Short-to-Medium Series, Mississippi Tax-Free Income Series, North Carolina Tax-Free Income Series, North Carolina Tax-Free Short-to-Medium Series, Tennessee Tax-Free Income Series, Tennessee Tax-Free Short-to-Medium Series, Intermediate Government Bond Series, and Taxable Municipal Bond Series (collectively, the Funds), as of June 30, 2012, and the related statements of operations for the year then ended, and the statements of changes in net assets and financial highlights for each of the years or periods indicated therein. These financial statements and financial highlights are the responsibility of the Funds’ management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not engaged to perform an audit of the Funds’ internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Funds’ internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of June 30, 2012, by correspondence with the custodian and brokers. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of each of the respective Funds comprising the Dupree Mutual Funds at June 30, 2012, the results of their operations for the year then ended, and the changes in their net assets and financial highlights for each of the years or periods then ended indicated above, in conformity with U.S. generally accepted accounting principles.
Cincinnati, Ohio
August 23, 2012
57
DUPREE MUTUAL FUNDS
OTHER UNAUDITED INFORMATION
June 30, 2012
Trustee and officer information
The following table sets forth information as to the Trustees and officers:
| | | | | | | | | | |
| Name, Address and Age | | Position(s) Held with
Funds | | Term of Office and
Length of Time Served | | Principal Occupation(s)
During Past 5 Years | | Number of
Portfolios in
Fund Complex
Overseen by
Trustee | | Other
Directorships
Held by Trustee |
| Officers: | | | | | | | | | | |
Thomas P. Dupree Sr. 125 South Mill Street Lexington, KY 40507 Age: 81 | | President | | Annual Term;
33 years of service | | Chairman of the Board of Dupree & Company, Inc. | | N/A | | KY Historical Society Foundation |
Gay M. Elste P.O. Box 28 Versailles, KY 40383 Age: 61 | | Compliance Officer | | Annual Term;
8 years of service | | Attorney at Law, Darsie & Elste. Anstruther Farm, beef cattle farming | | N/A | | N/A |
Allen E. Grimes, III 125 South Mill Street Lexington, KY 40507 Age: 49 | | Executive Vice President | | Annual Term;
7 years of service | | President, Dupree & Company, Inc. | | N/A | | International Book Project, Inc. |
Michelle M. Dragoo 125 South Mill Street Lexington, KY 40507 Age: 51 | | Vice President, Secretary, Treasurer | | Annual Term;
14 years of service as Vice President, 12 years of service as Secretary, Treasurer | | Vice President, Secretary, Treasurer of Dupree & Company, Inc. | | N/A | | N/A |
Alison L. Arnold 125 South Mill Street Lexington, KY 40507 Age: 52 | | Assistant Secretary | | Annual Term;
19 years of service | | Dupree & Company, Inc. | | N/A | | N/A |
| Trustees: | | | | | | | | | | |
William A. Combs, Jr. 111 Woodland Ave., #510 Lexington, KY 40502 Age: 72 | | Chairman, Trustee | | Annual Term; 11 years of service as Chairman; 23 years of service as Trustee | | Officer, Director: Mercedes-Benz of Cincinnati, Ohio; Mercedes-Benz of West Chester, Ohio and Freedom Dodge, Lexington, KY | | 10 | | N/A |
James C. Baughman, Jr. 1999 Richmond Road Suite 4 Lexington, KY 40502 Age: 49 | | Trustee | | One Year Term; 5 Years of Service | | Chief Executive Officer, Secretary, Treasurer, Director Office Suites Plus, Inc. (executive office space rental) | | 10 | | Advisory Board, Community Trust Bank; President/ Director Global Workspace Association International; Vice President, Director, Preferred Office Network, LLC |
Lucy A. Breathitt 1703 Fairway Drive Lexington, KY 40502 Age: 75 | | Trustee | | Annual Term; 16 years of service | | Alexander Farms, farming | | 10 | | KY Natural Lands Trust, Bluegrass Conservancy |
C. Timothy Cone 201 West Short Street Lexington, KY 40507 Age: 68 | | Trustee | | Annual Term; 10 years of service | | President, Gess, Mattingly & Atchison, P.S.C. (law firm) | | 10 | | N/A |
58
DUPREE MUTUAL FUNDS
OTHER UNAUDITED INFORMATION
June 30, 2012
Trustee and officer information, continued
| | | | | | | | | | |
| Name, Address and Age | | Position(s) Held with
Funds | | Term of Office and
Length of Time Served | | Principal Occupation(s)
During Past 5 Years | | Number of
Portfolios in
Fund Complex
Overseen by
Trustee | | Other
Directorships
Held by Trustee |
Ann Rosenstein Giles 343 Waller Avenue Suite 100 Lexington, KY 40504 Age: 60 | | Trustee | | Annual Term; First year of service | | Rosenstein Development, LLC (self-employed marketing consultant) | | 10 | | Trustee, Transylvania University, KY Historical Society |
Marc A. Mathews 2104 Lakeside Drive Lexington, KY 40502 Age: 54 | | Trustee | | Annual Term; First year of service | | Vice President for Finance and Business, Transylvania University 2009 to date; Treasurer, University of Kentucky 2008-2009; Controller, University of Kentucky 2004-2008 | | 10 | | Director, Bank of the Bluegrass |
As of June 30, 2012, none of the Trustees nor members of their immediate family held any beneficial interest in the Trust’s Investment Adviser. Further, the Trust does not have an underwriter.
The Statement of Additional Information (“SAI”) includes additional information about Trustees and officers and is available upon request without charge. Please call (800) 866-0614 to request the SAI.
Proxy Voting Information
A description of the policies and procedures that the Funds use to determine how to vote proxies relating to portfolio securities is available without charge upon request by calling (800) 866-0614, or on the Securities and Exchange Commission’s website at http://www.sec.gov. For the year ending June 30, 2011, the Funds exercised no proxy votes due to the fact that the debt instruments in which the Funds invest carry no voting rights.
Quarterly Portfolio Disclosure
The Trust files with the Securities and Exchange Commission a complete listing of portfolio holdings for each Fund as of the end of the first and third quarters of each fiscal year on Form N-Q. The complete listing (i) is available on the commission’s website and (ii) will be made available to shareholders upon request by calling (800) 866-0614. Information on the operation of the S.E.C.’s Public Reference Room may be obtained by calling 1-800-SEC-0300.
59
DUPREE MUTUAL FUNDS
OTHER UNAUDITED INFORMATION
June 30, 2012
Schedule of Shareholder Expenses
As a shareholder of the Funds, you incur transaction costs including investment advisory fees and other Fund expenses. The following examples are intended to help you understand your ongoing costs (in dollars) of investing in the Funds and to compare these costs with the ongoing costs of investing in other mutual funds.
Actual Expenses
The first line of the table below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that 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 first line under the heading entitled “Expenses Paid During the Six Months Ended June 30, 2011” to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The second line of the table below provides information about hypothetical account values and hypothetical expenses based on each Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses which is not the Funds’ actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Funds and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds.
| | | | | | | | | | | | | | | | |
| | | Net Expense
Ratio
Annualized
June 30, 2012 | | | Beginning
Account Value
January 1, 2012* | | | Ending
Account Value
June 30, 2012** | | | Expenses Paid During
the Six Months
Ended June 30, 2012 | |
Alabama Tax-Free Income Series | | | | | | | | | | | | | | | | |
| Actual | | | .70 | % | | $ | 1,000.00 | | | $ | 1,017.75 | | | $ | 3.49 | |
| Hypothetical | | | .70 | | | | 1,000.00 | | | | 1,024.86 | | | | 3.50 | |
Kentucky Tax-Free Income Series | | | | | | | | | | | | | | | | |
| Actual | | | .56 | | | | 1,000.00 | | | | 1,015.12 | | | | 2.82 | |
| Hypothetical | | | .56 | | | | 1,000.00 | | | | 1,024.86 | | | | 2.84 | |
Kentucky Tax-Free Short-to-Medium Series | | | | | | | | | | | | | | | | |
| Actual | | | .72 | | | | 1,000.00 | | | | 1,006.27 | | | | 3.61 | |
| Hypothetical | | | .72 | | | | 1,000.00 | | | | 1,024.86 | | | | 3.64 | |
Mississippi Tax-Free Income Series | | | | | | | | | | | | | | | | |
| Actual | | | .65 | | | | 1,000.00 | | | | 1,015.96 | | | | 3.24 | |
| Hypothetical | | | .65 | | | | 1,000.00 | | | | 1,024.86 | | | | 3.25 | |
North Carolina Tax-Free Income Series | | | | | | | | | | | | | | | | |
| Actual | | | .71 | | | | 1,000.00 | | | | 1,016.71 | | | | 3.57 | |
| Hypothetical | | | .71 | | | | 1,000.00 | | | | 1,024.86 | | | | 3.58 | |
North Carolina Tax-Free Short-to-Medium Series | | | | | | | | | | | | | | | | |
| Actual | | | .79 | | | | 1,000.00 | | | | 1,014.70 | | | | 3.97 | |
| Hypothetical | | | .79 | | | | 1,000.00 | | | | 1,024.86 | | | | 3.99 | |
Tennessee Tax-Free Income Series | | | | | | | | | | | | | | | | |
| Actual | | | .70 | | | | 1,000.00 | | | | 1,014.22 | | | | 3.50 | |
| Hypothetical | | | .70 | | | | 1,000.00 | | | | 1,024.86 | | | | 3.52 | |
Tennessee Tax-Free Short-to-Medium Series | | | | | | | | | | | | | | | | |
| Actual | | | .90 | | | | 1,000.00 | | | | 1,005.22 | | | | 4.47 | |
| Hypothetical | | | .90 | | | | 1,000.00 | | | | 1,024.86 | | | | 4.51 | |
60
DUPREE MUTUAL FUNDS
OTHER UNAUDITED INFORMATION
June 30, 2012
Schedule of Shareholder Expenses, continued
| | | | | | | | | | | | | | | | |
| | | Net Expense
Ratio
Annualized
June 30, 2012 | | | Beginning
Account Value
January 1, 2012* | | | Ending
Account Value
June 30, 2012** | | | Expenses Paid During
the Six Months
Ended June 30, 2012 | |
Intermediate Government Bond Series | | | | | | | | | | | | | | | | |
| Actual | | | .53 | % | | $ | 1,000.00 | | | $ | 1,008.85 | | | $ | 2.66 | |
| Hypothetical | | | .53 | | | | 1,000.00 | | | | 1,024.90 | | | | 2.68 | |
Taxable Municipal Bond Series | | | | | | | | | | | | | | | | |
| Actual | | | .90 | | | | 1,000.00 | | | | 1,022.48 | | | | 4.52 | |
| Hypothetical | | | .90 | | | | 1,000.00 | | | | 1,024.86 | | | | 4.52 | |
| * | | The example is based on an investment of $1,000 invested at the beginning of the period. |
| ** | | Expenses are equal to the Fund’s annualized expense ratio, multiplied by the average account value over the period multiplied by [182/366] (to reflect one-half year period). |
61
Item 2. Code of Ethics: The registrant has adopted a code of ethics that applies to the principal executive officer, principal financial officer, principal accounting officer and persons performing similar functions. The full text of the Code of Ethics is attached hereto as Exhibit 12(a)(1). There have been no waivers from the Code of Ethics during the reporting period. The Registrant’s Code of Ethics is posted on its web site. A copy of the Code of Ethics will be provided to any person free of charge upon request by telephoning or writing the Registrant.
Item 3. Audit Committee Financial Expert: Audit Committee Financial Expert: The board does not have a financial expert serving on the audit committee. The registrant’s audit committee is comprised of all Trustees all of who are non-interested and independent. The audit committee believes that the collective experience and expertise of the members in assessing the performance of companies and the evaluation of financial statements is sufficient to assess the issues which can reasonably be expected to be raised by the Trust’s financial statements.
Item 4. Principal Accountant Fees and Services: This information is incorporated by reference in the registrant’s definitive proxy statement to be filed within 120 days after June 30, 2012.
Item 5. Not applicable.
Item 6. Included as part of item 1.
Item 7. Not applicable
Item 8. Not applicable.
Item 9. Not applicable
Item 10. There have been no changes to the procedures by which shareholders may recommend nominees to the board of trustees nominating committee.
Item 11. Controls and Procedures:
On August 24, 2012 the Registrant’s President and Treasurer assessed the disclosure controls and procedures to evaluate the effectiveness of the Registrant’s disclosure controls and procedures designed to ensure that information required to be disclosed by the investment company on Form N-CSR is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an investment company in the reports that it files on Form N-CSR is accumulated and communicated to the investment company’s management, including its principal executive and principal financial officers or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.
Further, on August 24, 2012 the Registrant’s President and Treasurer assessed the internal control over financial reporting to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that: (1) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the investment company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the investment company are being made only in accordance with authorizations of management and trustees of the investment company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the investment company’s assets that could have a material effect on the financial statements.
The Registrant’s President and Treasurer have deemed the disclosure controls and procedures and the internal control over financial reporting effective. There were no changes in the Registrant’s disclosure controls and
procedures or internal control over financial reporting that occurred during the fourth quarter of the fiscal year that materially affected or is reasonably likely to materially affect the Registrant’s financial statements.
Item 12. Exhibits
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.
| | |
Dupree Mutual Funds |
| |
By: | | /s/ Michelle M. Dragoo, |
| | Vice President, Secretary, Treasurer |
Date: August 24, 2012
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
| | |
By: | | /s/ Thomas P. Dupree, Sr., |
| | President |
Date: August 24, 2012
| | |
By: | | /s/ Michelle M. Dragoo, |
| | Vice President, Secretary, Treasurer |
Date: August 24, 2012
