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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, Bluegrass Corporate Center, Suite 100
Lexington, Kentucky 40507
(Address of Principal Executive Offices) (Zip Code)
Thomas P. Dupree
125 South Mill Street, Bluegrass Corporate 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, 2014
Date of reporting period: July 1, 2013 through December 31, 2013
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Item 1. Report to Stockholders
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December 31, 2013
SEMI-ANNUAL REPORT
TO SHAREHOLDERS
(Unaudited)
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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 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.
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(Unaudited) |
Six Months Ended December 31, 2013
The investment objective for our tax-exempt municipal bond funds is to provide a high level of tax-free income derived from state-specific municipal securities without incurring undue risk to principal. Similarly, the investment objectives for 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 bonds, respectively, without incurring undue risk to principal. As a general rule, we do not try to anticipate market direction; instead, we attempt to buy high quality investment grade bonds at the best possible prices and yields and hold them in down markets as well as up markets.
Factors which may influence the performance of a state-specific tax-exempt municipal bond fund or a taxable municipal bond fund include, but are not limited to, movements in interest rates, a downgrade or upgrade of credit ratings assigned to bonds issued by state or local governments, changes in the credit ratings assigned to bond insurers, downturns or upturns in the specific economies of a given state, the rate at which bonds are called, and the rate at which revenues are received by state and local governments which are used to pay debt service on issued bonds. Similarly, many factors may influence the performance of a government bond fund including, but not limited to, movements in interest rates, prevailing conditions in the U.S. Government securities markets, changes in an issuer’s financial strength, changes in the credit rating assigned to an obligation, and the rate at which bonds are called.
During the six month period ended December 31, 2013 (the “reporting period”), economic activity expanded at a moderate pace. Real gross domestic product (GDP), a measure of the output of goods and services produced by labor and property in the United States, increased at an annual rate of 4.1 percent in the third quarter of 2013. Real GDP increased at a 3.2 percent annual rate (advance estimate) during the fourth quarter of 2013. Economic growth during the second half of 2013 showed a meaningful improvement over the growth rates experienced during the first half of the year. Real GDP increased at a 1.8 percent annual rate during the first quarter and at a 2.5 percent annual rate during the second quarter. Increases in manufacturing production and higher retail and auto sales helped the economy grow at a quicker pace during the second half of the year.
The Federal Reserve Board (“Fed”) left the federal funds target rate range at 0 to 1/4 percent during the reporting period. The Fed also maintained its accommodative monetary policy stance by purchasing additional agency mortgage-backed securities at a pace of $40 billion per month and also purchasing longer-term Treasury securities at a pace of $45 billion per month. The Fed announced at its December meeting that it would begin to taper its bond purchases beginning in January by $10 billion per month. However, it emphasized that its plan to taper asset purchases was not on a preset course and could increase or decrease depending upon incoming economic data. The Fed also strengthened its forward guidance in its December statement and emphasized that the fed funds rate would remain at exceptionally low levels “well beyond” the time the 6.5 percent unemployment threshold is breached.
Conditions in the labor market improved somewhat during the reporting period. The seasonally adjusted national unemployment rate dropped to 6.7 percent in December, the lowest since October 2008. However, the unemployment rate remained elevated by historical standards. The labor participation rate dropped during the second half of the year meaning that people continued to leave the work force. The housing market continued to recover with home prices in most regions increasing on a year-over-year basis. Rising mortgage rates acted as a slight damper on housing activity (i.e., housing sales and building permits) during the second half of the year.
Measures of inflation continued to be subdued. The Consumer Price Index (CPI) increased at a 1.5 percent annual rate in December. This was the smallest calendar year gain in the CPI since 2010. The core CPI, which excludes food and energy prices, increased at a 1.7 percent annual rate in December. The Fed’s preferred inflation gauge, the core Personal Consumption Expenditures Index, increased by 1.2 percent on a year-over-year basis in December. All of these inflation measures continue to be well below the Fed’s longer-run objective of a 2 percent target rate. Longer-term inflation expectations also remained stable during the reporting period.
The yield on the 10-year and 30-year Treasury increased during the second half of the year. For the full calendar year, the yield on the 10-year and 30-year Treasury were up 188 and 92 basis points, respectively. Yields in the municipal bond market also moved higher with yields on the long end of the curve showing the biggest movement. During the reporting period, yields on 10-year and 30-year AAA rated municipal securities increased 21 and 36 basis points, respectively.
Beginning in early June outflows from the Treasury market and municipal bond market picked up steam. The sell-off was largely related to investor fears that the Fed was considering ending its quantitative easing policies and the possibility that interest rates might increase sooner than anticipated. As such, investors rotated out of fixed-income securities into other asset classes. The selloff in fixed-income markets led to higher yields and lower prices. Credit concerns, focused mainly on Detroit’s bankruptcy filing
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and Puerto Rico’s deteriorating fiscal condition, also contributed to the sell-off in the municipal bond sector. On a full year basis, the municipal bond market had its worst year in 2013 since 1994 when the Fed embarked on a tightening spree.
State revenues continued to show positive trends as the economy has continued to recover. According to data compiled by the Rockefeller Institute, state tax revenue collections slowed down in the third quarter and grew by 6.1 percent on a year-over-year basis. This was down slightly from second quarter growth of 9.0 percent and first quarter growth of 8.6 percent. States have now reported fifteen consecutive quarters of growth in tax collections, beginning with the first quarter of 2010. While the fiscal health of states and localities has continued to slowly improve, unfunded pension obligations still present challenges for many jurisdictions. Moreover, new Government Accounting Standards Board (GASB) pension accounting standards are scheduled to become effective in the near future which will likely cause the reported funded ratios for many government pension plans to decline even further. However, this is a long-term problem and there is ample time for a solution. Many jurisdictions, including Kentucky, have already taken steps in the right direction to address their pension funding shortfalls.
A discussion of the performance of each of our funds for the six month period ended December 31, 2013 follows:
The Kentucky Tax-Free Income Series achieved a total return of 0.71 percent during the reporting period compared to a total return of 0.138 percent for the Barclays Capital Municipal Bond Index. The Kentucky Tax-Free Short-to-Medium Series achieved a total return of 0.88 percent during the period under review compared to a total return of 0.138 percent for the Barclays Capital Municipal Bond Index. During the reporting period, the longest portion of the index underperformed the shorter elements of the index. Both funds outperformed the index primarily due to their position on the shorter part of the yield curve.
The Tennessee Tax-Free Income Series achieved a total return of 0.48 percent during the reporting period compared to a total return of 0.138 percent for the Barclays Capital Municipal Bond Index. The Tennessee Tax-Free Short-to-Medium Series provided shareholders with a total return of 0.53 percent during the reporting period compared to 0.138 percent for the Barclays Capital Municipal Bond Index. Both funds performed in line with the index.
The North Carolina Tax-Free Income Series achieved a total return of 0.01 percent during the reporting period compared to 0.138 percent for the Barclays Capital Municipal Bond Index. The North Carolina Tax-Free Short-to-Medium Series achieved a total return of 0.88 percent during the reporting period compared to 0.138 percent for the Barclays Capital Municipal Bond Index. The North Carolina Tax-Free Income Series performed in line with the index. During the reporting period, the longest portion of the index underperformed the shorter elements of the index. The North Carolina Tax-Free Short-to-Medium Series outperformed the index primarily due to its position on the shorter part of the yield curve.
The Alabama Tax-Free Income Series achieved a total a total return of 0.15 percent during the reporting period compared to 0.138 percent for the Barclays Capital Municipal Bond Index. The fund performed in line with the index.
The Mississippi Tax-Free Income Series achieved a total return of -0.25 percent during the reporting period compared to 0.138 percent for the Barclays Capital Municipal Bond Index. The fund performed in line with the index.
The Intermediate Government Bond Series achieved a total return of -0.88 percent during the reporting period compared to -0.017 percent for the Barclays Capital U.S. Government Intermediate Bond Index. The duration and average maturity of the fund is slightly longer than the index, which led to the relative underperformance of the fund as shorter securities outperformed during the reporting period.
The Taxable Municipal Bond Series achieved a total return of -0.41 percent during the reporting period compared with a total return of -1.247 percent for the Barclays Capital Taxable Municipal Bond Index during the same period. The worst performing parts of the index were the longest maturities and the 5-10 year portion. The fund’s positioning between those two sections led to its relative outperformance of the index.
It should be noted that none of the Barclays Capital indices take into account any operating expenses or transaction costs. An investment cannot be made directly in an index.
Thank you for investing with Dupree Mutual Funds.
Total returns include changes in share price, reinvestment of dividends, and reinvestment of capital gains, if any. Performance data quoted represents past performance which is not a guarantee of future results. The opinions expressed herein are those of the funds’ portfolio management and are current as of December 31, 2013. Management’s opinions are not guarantees of performance or investment results and should not be taken as investment advice. You may lose money investing in the funds.
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The illustrations below provide each Fund’s sector allocation and | Unaudited |
summarize key information about each Fund’s investments.
Kentucky Tax-Free Income Series | ||||
CREDIT QUALITY (reflects highest credit rating)* | % of Net Assets at Fair Value | |||
Aaa/AAA | 3.84% | |||
Aa/AA | 86.21% | |||
A | 8.66% | |||
Baa/BBB | 0.35% | |||
Not Rated | 0.94% | |||
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100.00% | ||||
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COMPOSITION | ||||
% of Net Assets | ||||
Miscellaneous Public Improvement | 26.92% | |||
Municipal Utility Revenue | 14.39% | |||
Turnpikes and Toll Roads Revenue | 11.73% | |||
Prerefunded | 10.27% | |||
Refunded | 9.67% | |||
University Consolidated Education and Building Revenue | 5.73% | |||
Hospital and Healthcare Revenue | 5.36% | |||
School Improvements | 4.68% | |||
Public Facilities Revenue | 3.37% | |||
Escrowed to Maturity | 3.19% | |||
State and Local Mortgage Revenue | 2.15% | |||
Airport Revenue | 0.79% | |||
Miscellaneous Revenue | 0.24% | |||
Other Assets Less Liabilities | 1.51% | |||
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100.00% | ||||
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Kentucky Tax-Free Short-to-Medium Series | ||||
CREDIT QUALITY (reflects highest credit rating)* | % of Net Assets at Fair Value | |||
Aaa/AAA | 1.90% | |||
Aa/AA | 90.39% | |||
A | 7.71% | |||
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100.00% | ||||
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COMPOSITION | ||||
% of Net Assets | ||||
Miscellaneous Public Improvement | 25.04% | |||
Turnpikes and Toll Roads Revenue | 16.60% | |||
School Improvements | 15.48% | |||
Refunded | 13.15% | |||
University Consolidated Education and Building Revenue | 10.00% | |||
Municipal Utility Revenue | 7.95% | |||
Public Facilities Revenue | 3.87% | |||
Hospital and Healthcare | 3.20% | |||
State and Local Mortgage Revenue | 1.87% | |||
Prerefunded | 0.92% | |||
Other Assets Less Liabilities | 1.92% | |||
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100.00% | ||||
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Alabama Tax-Free Income Series | ||||
CREDIT QUALITY (reflects highest credit rating)* | % of Net Assets at Fair Value | |||
Aaa/AAA | 2.22% | |||
Aa/AA | 86.58% | |||
A | 9.08% | |||
Baa/BBB | 0.58% | |||
Not Rated | 1.54% | |||
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100.00% | ||||
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COMPOSITION | ||||
% of Net Assets | ||||
University Consolidated Education and Building Revenue | 27.05% | |||
School Improvement Revenue | 26.53% | |||
Municipal Utility Revenue | 18.68% | |||
Public Facilities Revenue | 11.01% | |||
Miscellaneous Public Improvement | 7.43% | |||
Prerefunded | 5.56% | |||
Escrowed to Maturity | 1.62% | |||
Refunded | 1.22% | |||
State and Local Mortgage Revenue | 0.69% | |||
Industrial Revenue | 0.12% | |||
Other Assets Less Liabilities | 0.09% | |||
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100.00% | ||||
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Mississippi Tax-Free Income Series | ||||
CREDIT QUALITY (reflects highest credit rating)* | % of Net Assets at Fair Value | |||
Aaa/AAA | 0.35% | |||
Aa/AA | 79.18% | |||
A | 20.29% | |||
Not Rated | 0.18% | |||
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100.00% | ||||
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COMPOSITION | ||||
% of Net Assets | ||||
University Consolidated Education and Building Revenue | 31.35% | |||
Public Facilities Revenue | 16.34% | |||
Turnpikes and Toll Roads Revenue | 13.40% | |||
Municipal Utility Revenue | 9.21% | |||
Miscellaneous Public Improvement | 7.48% | |||
School Improvement Revenue | 6.38% | |||
Hospital and Healthcare Revenue | 4.12% | |||
Refunded | 3.81% | |||
Prerefunded | 3.71% | |||
Airport Revenue | 1.97% | |||
State and Local Mortgage Revenue | 0.35% | |||
Escrowed to Maturity | 0.29% | |||
Other Assets Less Liabilities | 1.59% | |||
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100.00% | ||||
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The illustrations below provide each Fund’s sector allocation and | Unaudited |
summarize key information about each Fund’s investments.
Tennessee Tax-Free Income Series | ||||
CREDIT QUALITY (reflects highest credit rating)* | % of Net Assets at Fair Value | |||
Aaa/AAA | 6.68% | |||
Aa/AA | 83.22% | |||
A | 8.56% | |||
Baa/BBB | 0.78% | |||
Not Rated | 0.76% | |||
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100.00% | ||||
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COMPOSITION | ||||
% of Net Assets | ||||
Municipal Utility Revenue | 41.00% | |||
University Consolidated Education and Building Revenue | 12.23% | |||
Public Facilities Revenue | 11.56% | |||
Hospital and Healthcare Revenue | 8.81% | |||
Prerefunded | 6.36% | |||
Refunded | 5.87% | |||
State and Local Mortgage Revenue | 4.59% | |||
School Improvement Revenue | 4.57% | |||
Miscellaneous Public Improvement | 2.16% | |||
Escrowed to Maturity | 1.23% | |||
Industrial Revenue | 0.92% | |||
Other Assets Less Liabilities | 0.70% | |||
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100.00% | ||||
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Tennessee Tax-Free Short-to-Medium Series | ||||
CREDIT QUALITY (reflects highest credit rating)* | % of Net Assets at Fair Value | |||
Aaa/AAA | 3.54% | |||
Aa/AA | 77.05% | |||
A | 19.02% | |||
Baa/BBB | 0.39% | |||
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100.00% | ||||
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COMPOSITION | ||||
% of Net Assets | ||||
Refunded | 21.08% | |||
Municipal Utility Revenue | 17.22% | |||
Miscellaneous Public Improvement | 14.49% | |||
Prerefunded | 10.78% | |||
School Improvement Revenue | 9.46% | |||
Hospital and Healthcare Revenue | 6.80% | |||
State and Local Mortgage Revenue | 6.09% | |||
University Consolidated Education and Building Revenue | 5.17% | |||
Public Facilities Revenue | 3.64% | |||
Airport Revenue | 2.41% | |||
Other Assets Less Liabilities | 2.86% | |||
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100.00% | ||||
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North Carolina Tax-Free Income Series | ||||
CREDIT QUALITY (reflects highest credit rating)* | % of Net Assets at Fair Value | |||
Aaa/AAA | 4.25% | |||
Aa/AA | 75.35% | |||
A | 18.98% | |||
Baa/BBB | 1.36% | |||
Not Rated | 0.06% | |||
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100.00% | ||||
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COMPOSITION | ||||
% of Net Assets | ||||
Municipal Utility Revenue | 21.52% | |||
School Improvement Revenue | 16.97% | |||
University Consolidated Education and Building Revenue | 16.18% | |||
Public Facilities Revenue | 10.78% | |||
Hospital and Healthcare | 10.17% | |||
Refunding | 7.17% | |||
Miscellaneous Public Improvement | 6.55% | |||
Airport Revenue | 4.98% | |||
Prefunded | 3.01% | |||
Turnpikes and Toll Roads Revenue | 2.32% | |||
Other Assets Less Liabilities | 0.35% | |||
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100.00% | ||||
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North Carolina Tax-Free Short-to-Medium Series | ||||
CREDIT QUALITY (reflects highest credit rating)* | % of Net Assets at Fair Value | |||
Aaa/AAA | 0.06% | |||
Aa/AA | 83.07% | |||
A | 15.30% | |||
Not Rated | 1.57% | |||
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100.00% | ||||
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COMPOSITION | ||||
% of Net Assets | ||||
Municipal Utility Revenue | 20.82% | |||
School Improvement Revenue | 17.38% | |||
Prerefunded | 14.44% | |||
Public Facilities Revenue | 12.73% | |||
Refunded | 7.83% | |||
Miscellaneous Public Improvement | 7.33% | |||
University Consolidated Education and Building Revenue | 6.68% | |||
Hospital and Healthcare Revenue | 5.34% | |||
Airport Revnue | 2.31% | |||
Turnpikes and Toll Roads Revenue | 1.33% | |||
Lease Revenue | 1.00% | |||
State and Local Mortgage Revenue | 0.53% | |||
Other Assets Less Liabilities | 2.28% | |||
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100.00% | ||||
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The illustrations below provide each Fund’s sector allocation and | Unaudited |
summarize key information about each Fund’s investments.
Intermediate Government Bond Series | ||||
CREDIT QUALITY (reflects highest credit rating)* | % of Net Assets at Fair Value | |||
Aaa/AAA | 100.00% | |||
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COMPOSITION | ||||
% of Net Assets | ||||
Federal Farm Credit | 65.80% | |||
Federal Home Loan Bank | 21.21% | |||
Federal National Mortgage Association | 5.75% | |||
Federal Home Loan Mortgage Corp | 3.95% | |||
Other Assets Less Liabilities | 3.29% | |||
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100.00% | ||||
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Taxable Municipal Bond Series | ||||
CREDIT QUALITY (reflects highest credit rating)* | % of Net Assets at Fair Value | |||
Aa/AA | 89.68% | |||
A | 10.32% | |||
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100.00% | ||||
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COMPOSITION | ||||
% of Net Assets | ||||
Public Facilities Revenue | 35.29% | |||
Municipal Utility Revenue | 28.17% | |||
School Improvement Revenue | 14.21% | |||
Miscellaneous Public Improvement | 12.25% | |||
University Consolidated Education and Building Revenue | 2.83% | |||
Turnpikes and Toll Roads Revenue | 2.79% | |||
Hospital and Healthcare Revenue | 2.36% | |||
Other Assets Less Liabilities | 2.10% | |||
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100.00% | ||||
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* | Bond ratings reflect the highest credit quality rating assigned to a specific bond by a Nationally Recognized Statistical Rating Organization (NRSRO) |
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UNAUDITED |
SCHEDULE OF PORTFOLIO INVESTMENTS
Alabama Municipal Bonds — 100% of Net Assets
December 31, 2013
Bond Description | Coupon | Maturity Date | Rating# | Par Value | Fair Value | |||||||||||||
UNIVERSITY CONSOLIDATED EDUCATION AND BUILDING REVENUE BONDS | ||||||||||||||||||
27.05% of Net Assets | ||||||||||||||||||
Mobile AL Spring Hill College Educational Building | 5.100 | % | 09/01/2019 | Baa3 | $ | 120,000 | $ | 119,584 | ||||||||||
AL State Board Education Bishop State Community College | 4.600 | 01/01/2021 | A1 | 100,000 | 100,043 | |||||||||||||
AL State Private Colleges & Universities Tuskegee University | 4.750 | 09/01/2026 | AA-* | 500,000 | 505,510 | |||||||||||||
AL State University Revenue General Tuition and Fee | 5.250 | 09/01/2034 | A3/AA-* | 75,000 | 77,516 | |||||||||||||
Auburn University AL General Fee Revenue | 5.000 | 06/01/2032 | Aa2/AA-* | 45,000 | 46,413 | |||||||||||||
Auburn University AL General Fee Revenue | 5.000 | 06/01/2027 | Aa2/AA-* | 300,000 | 322,368 | |||||||||||||
Auburn University AL General Fee Revenue | 5.000 | 06/01/2033 | Aa2/AA-* | 420,000 | 433,411 | |||||||||||||
Auburn University AL General Fee Revenue | 5.000 | 06/01/2038 | Aa2/AA-* | 600,000 | 608,808 | |||||||||||||
Auburn University AL General Fee Revenue | 5.000 | 06/01/2022 | Aa2/AA-* | 50,000 | 55,284 | |||||||||||||
Auburn University AL General Fee Revenue | 5.000 | 06/01/2036 | Aa2/AA-* | 150,000 | 156,023 | |||||||||||||
Jacksonville AL State University Revenue Tuition and Fee | 5.125 | 12/01/2033 | AA-* | 450,000 | 460,670 | |||||||||||||
Tuscaloosa AL Public Education Building Authority Student Housing | 6.375 | 07/01/2028 | AA-* | 250,000 | 280,017 | |||||||||||||
Tuscaloosa AL Public Education Building Authority Student Housing | 6.750 | 07/01/2033 | AA-* | 495,000 | 549,480 | |||||||||||||
University of AL General Revenue | 5.000 | 07/01/2028 | Aa2/AA-*/AA+@ | 325,000 | 345,630 | |||||||||||||
University of AL General Revenue | 5.000 | 07/01/2032 | Aa2/AA-*/AA+@ | 500,000 | 515,145 | |||||||||||||
University of AL General Revenue | 5.000 | 07/01/2034 | Aa2/AA-* | 250,000 | 258,020 | |||||||||||||
University South AL University Revenue Refunding Tuition | 5.000 | 12/01/2029 | Aa1/AA+* | 105,000 | 111,575 | |||||||||||||
University of Southern AL University Revenues Facilities | 5.000 | 08/01/2029 | Aa1/AA+* | 550,000 | 572,104 | |||||||||||||
University of South AL University Revenues Facilities Capital | 4.750 | 08/01/2033 | Aa1/AA+* | 100,000 | 101,767 | |||||||||||||
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5,619,368 | ||||||||||||||||||
SCHOOL IMPROVEMENT BONDS | ||||||||||||||||||
26.53% of Net Assets | ||||||||||||||||||
Montgomery County AL Warrants | 5.000 | 03/01/2028 | Aa1/AA* | 175,000 | 185,873 | |||||||||||||
Opelika AL Warrants | 5.000 | 11/01/2031 | Aa2/AA* | 150,000 | 159,165 | |||||||||||||
Phenix City AL School Warrants | 5.000 | 08/01/2024 | AA-* | 80,000 | 85,480 | |||||||||||||
Scottsboro AL Warrants | 5.000 | 07/01/2028 | A+* | 250,000 | 262,425 | |||||||||||||
AL State Public Schools & College Authority Capital Improvement | 5.000 | 12/01/2024 | Aa1/AA* | 100,000 | 110,967 | |||||||||||||
AL State Public Schools & College Authority Capital Improvement** | 5.000 | 12/01/2025 | Aa1/AA* | 640,000 | 704,608 | |||||||||||||
AL State Public Schools & College Authority Refinancing | 5.000 | 05/01/2024 | Aa1/AA*/AA+@ | 125,000 | 138,075 | |||||||||||||
Elmore County AL Public Education Cooperative | 5.000 | 08/01/2032 | Aa3 | 50,000 | 51,906 | |||||||||||||
Etowah County AL Board of Education Capital Outlay Warrants | 5.000 | 09/01/2037 | A+* | 200,000 | 203,080 | |||||||||||||
Madison County AL Board of Education Capital Outlay Tax | 4.950 | 09/01/2025 | Aa3/AA-* | 100,000 | 106,365 | |||||||||||||
Madison County AL Board of Education Capital Outlay Tax | 5.100 | 09/01/2028 | Aa3/AA-* | 285,000 | 301,567 | |||||||||||||
Madison County AL Board of Education Capital Outlay Tax | 5.125 | 09/01/2034 | Aa3/AA-* | 505,000 | 522,847 | |||||||||||||
Mobile AL Public Education Building Authority | 5.000 | 03/01/2033 | A3/AA-*/AA-@ | 200,000 | 204,817 | |||||||||||||
Morgan County AL Board of Education Capital Outlay Warrants** | 5.000 | 03/01/2035 | AA-* | 1,050,000 | 1,093,071 | |||||||||||||
Shelby County AL Board of Education Capital Outlay Warrants | 5.000 | 02/01/2031 | Aa2/A* | 615,000 | 641,027 | |||||||||||||
Shelby County AL Board of Education Special Tax School Warrants | 5.000 | 02/01/2025 | Aa3/A+* | 300,000 | 311,283 | |||||||||||||
Sumter County AL Limited Obligation School Warrants | 5.100 | 02/01/2034 | A* | 100,000 | 100,752 | |||||||||||||
Sumter County AL Limited Obligation School Warrants | 5.200 | 02/01/2039 | A* | 95,000 | 94,207 | |||||||||||||
Troy AL Public Educational Building Authority Educational | 5.250 | 12/01/2036 | A2/AA-* | 225,000 | 233,574 | |||||||||||||
|
| |||||||||||||||||
5,511,089 | ||||||||||||||||||
MUNICIPAL UTILITY REVENUE BONDS | ||||||||||||||||||
18.68% of Net Assets | ||||||||||||||||||
Tallassee AL Water Gas and Sewer Warrants | 5.125 | 05/01/2036 | A2/AA-* | 75,000 | 78,310 | |||||||||||||
AL Drinking Water Finance Authority Revolving Fund Loan | 4.750 | 08/15/2027 | NR | 75,000 | 75,167 | |||||||||||||
Bessemer AL Governmental Utility Services Water Supply | 4.750 | 06/01/2033 | A2 | 100,000 | 101,159 | |||||||||||||
Birmingham AL Waterworks Board Water Revenue | 4.750 | 01/01/2036 | Aa2/AA* | 215,000 | 212,399 | |||||||||||||
Birmingham AL Waterworks Board Water Revenue | 5.000 | 01/01/2026 | Aa2/AA* | 80,000 | 86,618 | |||||||||||||
Birmingham AL Waterworks Board Water Revenue | 5.000 | 01/01/2038 | Aa2/AA* | 100,000 | 102,107 | |||||||||||||
Chatom AL Industrial Board Gulf Opportunity Zone | 5.000 | 08/01/2037 | A3/AA-*/A-@ | 150,000 | 154,400 | |||||||||||||
Cullman AL Utility Board Water Revenue | 4.750 | 09/01/2037 | Aa3/AA-* | 400,000 | 400,656 | |||||||||||||
Cullman County AL Water Revenue | 5.000 | 05/01/2021 | Baa1/A+* | 125,000 | 130,090 | |||||||||||||
Fort Payne AL Waterworks Board Water Revenue | 4.750 | 07/01/2034 | AA-* | 100,000 | 102,282 | |||||||||||||
Huntsville AL Water Systems Revenue | 5.000 | 11/01/2033 | Aa1/AAA* | 300,000 | 317,811 | |||||||||||||
Jasper AL Water Works and Sewer Board Utility Revenue | 5.000 | 06/01/2030 | A+* | 455,000 | 481,567 |
The accompanying notes are an integral part of the financial statements.
1
Table of Contents
DUPREE MUTUAL FUNDS — ALABAMA TAX-FREE INCOME SERIES | UNAUDITED |
SCHEDULE OF PORTFOLIO INVESTMENTS
Alabama Municipal Bonds — 100% of Net Assets
December 31, 2013
Bond Description | Coupon | Maturity Date | Rating# | Par Value | Fair Value | |||||||||||||
Limestone County AL Water and Sewer Authority Water Revenue | 5.000 | % | 12/01/2029 | A+* | $ | 275,000 | $ | 278,566 | ||||||||||
Muscle Shoals AL Utilities Board Water and Sewer Revenue | 5.750 | 12/01/2033 | AA-* | 430,000 | 464,864 | |||||||||||||
North Marshall AL Utilities Board Water Revenue | 5.100 | 10/01/2030 | AA-* | 375,000 | 393,323 | |||||||||||||
Opelika AL Water Board Revenue | 5.000 | 06/01/2037 | Aa3/AA-* | 250,000 | 256,943 | |||||||||||||
Opelika AL Water Board Revenue | 5.250 | 06/01/2036 | Aa3/A+* | 70,000 | 72,776 | |||||||||||||
Phenix City AL Water and Sewer Revenue | 5.000 | 08/15/2034 | A3/AA-*/AA-@ | 90,000 | 93,386 | |||||||||||||
West Morgan East Lawrence AL Water and Sewer Revenue | 4.750 | 08/15/2030 | AA-* | 75,000 | 76,750 | |||||||||||||
|
| |||||||||||||||||
3,879,174 | ||||||||||||||||||
PUBLIC FACILITIES REVENUE BONDS | ||||||||||||||||||
11.01% of Net Assets | ||||||||||||||||||
Anniston AL Public Building Authority DHR Project | 5.250 | 05/01/2030 | AA-* | 50,000 | 53,899 | |||||||||||||
Anniston AL Public Building Authority Revenue | 5.500 | 05/01/2033 | AA-* | 200,000 | 213,055 | |||||||||||||
Anniston AL Public Building Authority | 5.000 | 03/01/2032 | A2/AA-* | 400,000 | 417,592 | |||||||||||||
Bessemer AL Public Educational Building Authority Revenue | 5.000 | 07/01/2030 | AA-* | 250,000 | 263,892 | |||||||||||||
Huntsville AL Public Building Authority Lease Revenue | 5.000 | 10/01/2027 | Aa1/AA+* | 375,000 | 400,684 | |||||||||||||
Huntsville AL Public Building Authority Lease Revenue | 5.000 | 10/01/2033 | Aa1/AA+* | 175,000 | 181,571 | |||||||||||||
Lowndes County AL Warrants | �� | 5.250 | 02/01/2037 | A2/AA-* | 250,000 | 254,873 | ||||||||||||
Montgomery AL Warrants | 5.000 | 02/01/2030 | A1/AA* | 300,000 | 319,716 | |||||||||||||
Montgomery County AL Public Building Authority Revenue | 5.000 | 03/01/2031 | Aa2/AA-* | 175,000 | 182,058 | |||||||||||||
|
| |||||||||||||||||
2,287,340 | ||||||||||||||||||
MISCELLANEOUS PUBLIC IMPROVEMENT BONDS | ||||||||||||||||||
7.43% of Net Assets | ||||||||||||||||||
Tuscaloosa AL Warrants | 5.000 | 10/15/2034 | Aa1/AA+* | 175,000 | 182,296 | |||||||||||||
Tuscaloosa AL Warrants | 5.125 | 01/01/2039 | Aa1/AA+* | 150,000 | 155,720 | |||||||||||||
Daphne AL Warrants | 5.000 | 04/01/2023 | Aa2/AA* | 250,000 | 267,670 | |||||||||||||
Mobile AL Refunding Warrants | 5.000 | 02/15/2027 | Aa2/AA-* | 335,000 | 355,137 | |||||||||||||
AL Incentives Financing Authority Special Obligation | 5.000 | 09/01/2029 | AA-* | 125,000 | 131,274 | |||||||||||||
AL State Incentives Financing Authority Special Obligation | 5.000 | 09/01/2037 | Aa3/A+* | 450,000 | 451,539 | |||||||||||||
|
| |||||||||||||||||
1,543,636 | ||||||||||||||||||
PREREFUNDED BONDS | ||||||||||||||||||
5.56% of Net Assets | ||||||||||||||||||
Albertville AL Warrants | 5.000 | 02/01/2035 | AA-* | 110,000 | 129,186 | |||||||||||||
Enterprise AL Warrants General Obligation | 5.000 | 10/01/2019 | NR | 55,000 | 56,918 | |||||||||||||
Enterprise AL Warrants General Obligation | 5.000 | 10/01/2023 | NR | 50,000 | 51,751 | |||||||||||||
Huntsville AL Health Care Authority | 5.000 | 06/01/2024 | A1/A* | 100,000 | 106,580 | |||||||||||||
Montgomery AL Warrants | 5.000 | 01/01/2023 | A1/AA* | 80,000 | 87,323 | |||||||||||||
Morgan County AL Warrants | 5.000 | 04/01/2029 | Aa3 | 25,000 | 25,295 | |||||||||||||
Oxford AL Warrants | 5.000 | 10/01/2036 | Aa2 | 50,000 | 54,568 | |||||||||||||
Phenix City AL School Warrants | 5.000 | 02/01/2017 | NR | 120,000 | 135,594 | |||||||||||||
Tuscaloosa AL Warrants | 5.000 | 01/01/2030 | Aa1/AA+* | 150,000 | 153,203 | |||||||||||||
University of AL General Revenue | 5.000 | 07/01/2034 | Aa2/AA-*/AA+@ | 350,000 | 354,374 | |||||||||||||
|
| |||||||||||||||||
1,154,792 | ||||||||||||||||||
ESCROWED TO MATURITY BONDS | ||||||||||||||||||
1.62% of Net Assets | ||||||||||||||||||
West Morgan — East Lawrence Water Authority AL Water Revenue | 5.000 | 08/15/2025 | A2/AA-* | 300,000 | 335,862 | |||||||||||||
|
| |||||||||||||||||
REFUNDING BONDS | ||||||||||||||||||
1.22% of Net Assets | ||||||||||||||||||
Muscle Shoals AL Refunded Warrants | 4.600 | 08/01/2024 | Aa3 | 250,000 | 252,858 | |||||||||||||
|
| |||||||||||||||||
STATE AND LOCAL MORTGAGE/HOUSING BONDS | ||||||||||||||||||
.69% of Net Assets | ||||||||||||||||||
AL Housing Finance Authority Single Family Mortgage Revenue | 5.375 | 10/01/2033 | Aaa | 140,000 | 143,646 | |||||||||||||
|
|
The accompanying notes are an integral part of the financial statements.
2
Table of Contents
DUPREE MUTUAL FUNDS — ALABAMA TAX-FREE INCOME SERIES | UNAUDITED |
SCHEDULE OF PORTFOLIO INVESTMENTS
Alabama Municipal Bonds — 100% of Net Assets
December 31, 2013
Bond Description | Coupon | Maturity Date | Rating# | Par Value | Fair Value | |||||||||||||
INDUSTRIAL REVENUE/POLLUTION CONTROL BONDS | ||||||||||||||||||
.12% of Net Assets | ||||||||||||||||||
Auburn AL Industrial Development Board Facilities Revenue | 6.200 | % | 11/01/2020 | A* | $ | 25,000 | $ | 24,998 | ||||||||||
|
| |||||||||||||||||
Total Investments (cost $20,449,346) (See (a) below for further explanation) 99.91% of Net Assets |
| $ | 20,752,763 | |||||||||||||||
|
| |||||||||||||||||
Other assets in excess of liabilities .09% |
| 18,859 | ||||||||||||||||
|
| |||||||||||||||||
Net Assets 100% | $ | 20,771,622 | ||||||||||||||||
|
|
* | Standard and Poor’s Corporation |
** | Segregated security — see footnote 8 |
@ | Fitch’s Investors Service |
(All other ratings by Moody's Investors Service, Inc.) |
NR | Not Rated |
# | Bond ratings are unaudited and not covered by Report of Independent Registered Public Accounting Firm. |
(a) | Cost for federal income tax purposes is $20,449,248 and net unrealized appreciation of investments is as follows: |
Unrealized appreciation | $ | 521,341 | ||||
Unrealized depreciation | (217,826 | ) | ||||
|
| |||||
Net unrealized appreciation | $ | 303,515 | ||||
|
|
Other Information
The following is a summary of the inputs used, as of December 31, 2013 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.
The Fund held no investments or other financial instruments as of December 31, 2013 whose fair value was determined using Level 3 inputs. There were no transfers in and out of level 1, 2 or 3 during the period ending December 31, 2013.
Valuation Inputs | Municipal Bonds | |||||
Level 1 | Quoted Prices | $ | — | |||
Level 2 | Other Significant Observable Inputs | 20,752,763 | ||||
Level 3 | Significant Unobservable Inputs | — | ||||
|
| |||||
$ | 20,752,763 | |||||
|
|
The accompanying notes are an integral part of the financial statements.
3
Table of Contents
ALABAMA TAX-FREE INCOME SERIES
STATEMENT OF ASSETS AND LIABILITIES
December 31, 2013 | UNAUDITED |
ASSETS: | ||||||||
Investments in securities, at fair value (Cost: $20,449,346) | $ | 20,752,763 | ||||||
Cash | 1,265 | |||||||
Interest receivable | 304,523 | |||||||
|
| |||||||
Total assets | 21,058,551 | |||||||
LIABILITIES: | ||||||||
Payable for: | ||||||||
Distributions to shareholders | 100,995 | |||||||
Fund shares redeemed | 53,604 | |||||||
Investment advisory fee | 7,455 | |||||||
Transfer agent fee | 3,416 | |||||||
Trustee fees | 655 | |||||||
Notes payable | 111,000 | |||||||
Accrued expenses | 9,804 | |||||||
|
| |||||||
Total liabilities | 286,929 | |||||||
|
| |||||||
NET ASSETS: | ||||||||
Capital | 20,516,563 | |||||||
Accumulated net investment income | 98 | |||||||
Net accumulated realized loss on investment transactions | (48,456 | ) | ||||||
Net unrealized appreciation in value of investments | 303,417 | |||||||
|
| |||||||
Net assets at value | $ | 20,771,622 | ||||||
|
| |||||||
NET ASSET VALUE, offering price and redemption price per share | $ | 11.89 | ||||||
|
|
STATEMENT OF OPERATIONS
For the six months ended December 31, 2013
Net investment income: | ||||
Interest income | $ | 476,526 | ||
|
| |||
Expenses: | ||||
Investment advisory fee | 56,553 | |||
Transfer agent fee | 17,098 | |||
Custodian expense | 4,945 | |||
Professional fees | 2,578 | |||
Trustee fees | 1,378 | |||
Other expenses | 9,242 | |||
|
| |||
Total expenses | 91,794 | |||
Fees waived by Adviser | (9,752 | ) | ||
Custodian expense reduction | (2 | ) | ||
|
| |||
Net expenses | 82,040 | |||
|
| |||
Net investment income | 394,486 | |||
|
| |||
Realized and unrealized loss on investments: | ||||
Net realized loss | (48,453 | ) | ||
Net change in unrealized appreciation/depreciation | (351,300 | ) | ||
|
| |||
Net realized and unrealized loss on investments | (399,753 | ) | ||
|
| |||
Net decrease in net assets resulting from operations | $ | (5,267 | ) | |
|
|
The accompanying notes are an integral part of the financial statements.
4
Table of Contents
ALABAMA TAX-FREE INCOME SERIES
STATEMENTS OF CHANGES IN NET ASSETS
For the six months ended December 31, 2013 and the year ended June 30, 2013 | UNAUDITED |
Six Months Ended 12/31/2013 | One Year Ended 6/30/2013 | |||||||
Operations: | ||||||||
Net investment income | $ | 394,486 | $ | 842,102 | ||||
Net realized gain/(loss) on investments | (48,453 | ) | 30,045 | |||||
Net change in unrealized appreciation/depreciation | (351,300 | ) | (687,104 | ) | ||||
|
|
|
| |||||
Net increase/(decrease) in net assets resulting from operations | (5,267 | ) | 185,043 | |||||
Distributions from net investment income | (394,478 | ) | (842,439 | ) | ||||
Distributions from capital gains | (29,276 | ) | (16,538 | ) | ||||
Net fund share transactions (Note 4) | (3,099,232 | ) | 2,062,926 | |||||
|
|
|
| |||||
Total increase/(decrease) | (3,528,253 | ) | 1,388,992 | |||||
Net assets: | ||||||||
Beginning of period | 24,299,875 | 22,910,883 | ||||||
|
|
|
| |||||
End of period | $ | 20,771,622 | $ | 24,299,875 | ||||
|
|
|
| |||||
Accumulated net investment income | $ | 98 | $ | 90 | ||||
|
|
|
|
FINANCIAL HIGHLIGHTS
Selected data for a share outstanding: | Six Months Ended 12/31/2013 | For the years ended June 30, | ||||||||||||||||||||||
2013 | 2012 | 2011 | 2010 | 2009 | ||||||||||||||||||||
Net asset value, beginning of period | $12.10 | $12.41 | $11.72 | $11.77 | $11.40 | $11.43 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Income from investment operations: | ||||||||||||||||||||||||
Net investment income | 0.21 | 0.43 | 0.44 | 0.45 | 0.46 | 0.46 | ||||||||||||||||||
Net gains/(losses) on securities, both realized and unrealized | (0.20 | ) | (0.30 | ) | 0.70 | (0.05 | ) | 0.37 | (0.03 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total from investment operations | 0.01 | 0.13 | 1.14 | 0.40 | 0.83 | 0.43 | ||||||||||||||||||
Less distributions: | ||||||||||||||||||||||||
Distributions from net investment income | (0.21 | ) | (0.43 | ) | (0.44 | ) | (0.45 | ) | (0.46 | ) | (0.46 | ) | ||||||||||||
Distributions from capital gains | (0.01 | ) | (0.01 | ) | (0.01 | ) | — | — | — | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total distributions | (0.22 | ) | (0.44 | ) | (0.45 | ) | (0.45 | ) | (0.46 | ) | (0.46 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net asset value, end of period | $11.89 | $12.10 | $12.41 | $11.72 | $11.77 | $11.40 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total return | 0.15% | (b) | 0.94% | 9.81% | 3.45% | 7.40% | 3.95% | |||||||||||||||||
Net assets, end of period (in thousands) | $20,772 | $24,300 | $22,911 | $21,235 | $19,853 | $14,262 | ||||||||||||||||||
Ratio of net expenses to average net assets (a) | 0.73% | (c) | 0.70% | 0.68% | 0.60% | 0.47% | 0.45% | |||||||||||||||||
Ratio of net investment income to average net assets | 3.52% | (c) | 3.40% | 3.59% | 3.83% | 3.94% | 4.14% | |||||||||||||||||
Portfolio turnover | 1.17% | (b) | 6.46% | 7.80% | 4.70% | 15.73% | 14.06% |
(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 | |||||||
.04%(c) | 0% | (c) | For the six months ended December 31, 2013 | |||||
.08% | 0% | For the year ended June 30, 2013 | ||||||
.10% | 0% | For the year ended June 30, 2012 | ||||||
.18% | 0% | For the year ended June 30, 2011 | ||||||
.33% | 0% | For the year ended June 30, 2010 | ||||||
.37% | .03% | For the year ended June 30, 2009 |
(b) | Not annualized |
(c) | Annualized |
The accompanying notes are an integral part of the financial statements.
5
Table of Contents
UNAUDITED |
SCHEDULE OF PORTFOLIO INVESTMENTS
Kentucky Municipal Bonds — 100% of Net Assets
December 31, 2013
Bond Description | Coupon | Maturity Date | Rating# | Par Value | Fair Value | |||||||||||||
MISCELLANEOUS PUBLIC IMPROVEMENT BONDS | ||||||||||||||||||
26.92% of Net Assets | ||||||||||||||||||
KY Asset Liability Commission General Fund | 5.000 | % | 05/01/2020 | Aa3/A+*/A+@ | $ | 2,000,000 | $ | 2,102,100 | ||||||||||
KY Asset Liability Commission Project Notes | 5.000 | 05/01/2023 | Aa3/A+*/A+@ | 5,600,000 | 5,859,952 | |||||||||||||
KY Asset Liability Commission General Fund | 5.000 | 05/01/2024 | Aa3/A+*/A+@ | 5,880,000 | 6,144,953 | |||||||||||||
KY Asset Liability Commission | 5.000 | 05/01/2025 | Aa3/A+*/A+@ | 1,000,000 | 1,042,490 | |||||||||||||
Ky State Property & Building #93 | 5.300 | 02/01/2025 | Aa3/AA-*/A+@ | 7,250,000 | 7,913,520 | |||||||||||||
KY State Property & Building #93 | 4.900 | 02/01/2028 | Aa3/AA-*/A+@ | 500,000 | 520,160 | |||||||||||||
KY State Property & Building #93 | 5.300 | 02/01/2028 | Aa3/AA-*/A+@ | 10,500,000 | 11,222,505 | |||||||||||||
KY State Property & Building #93 | 5.000 | 02/01/2029 | Aa3/AA-*/A+@ | 500,000 | 523,010 | |||||||||||||
KY State Property & Building #93 | 5.300 | 02/01/2029 | Aa3/AA-*/A+@ | 22,640,000 | 24,273,476 | |||||||||||||
KY State Property & Building #96 | 5.000 | 11/01/2029 | Aa3/A+*/A+@ | 5,000,000 | 5,297,600 | |||||||||||||
KY State Property & Building #98 | 5.000 | 08/01/2021 | Aa3/A+*/A+@ | 2,505,000 | 2,843,851 | |||||||||||||
KY State Property & Building #100 | 5.000 | 08/01/2026 | Aa3/A+*/A+@ | 2,000,000 | 2,166,360 | |||||||||||||
KY State Property & Building #100 | 5.000 | 08/01/2027 | Aa3/A+*/A+@ | 1,710,000 | 1,832,402 | |||||||||||||
KY State Property & Building #100 | 5.000 | 08/01/2028 | Aa3/A+*/A+@ | 4,000,000 | 4,256,600 | |||||||||||||
KY State Property & Building #100 | 5.000 | 08/01/2029 | Aa3/A+*/A+@ | 2,500,000 | 2,640,300 | |||||||||||||
KY State Property & Building #100 | 5.000 | 08/01/2030 | Aa3/A+*/A+@ | 9,980,000 | 10,493,571 | |||||||||||||
KY State Property & Building #100 | 5.000 | 08/01/2031 | Aa3/A+*/A+@ | 5,100,000 | 5,345,565 | |||||||||||||
KY State Property & Building #87 | 5.000 | 03/01/2019 | Aa3/A+*/A+@ | 3,000,000 | 3,311,700 | |||||||||||||
KY State Property & Building #87 | 5.000 | 03/01/2022 | Aa3/A+*/A+@ | 1,665,000 | 1,811,071 | |||||||||||||
KY State Property & Building #87 | 5.000 | 03/01/2023 | Aa3/A+*/A+@ | 5,175,000 | 5,551,637 | |||||||||||||
KY State Property & Building #87 | 5.000 | 03/01/2025 | Aa3/A+*/A+@ | 14,835,000 | 15,775,094 | |||||||||||||
KY State Property & Building #87 | 5.000 | 03/01/2026 | Aa3/A+*/A+@ | 8,230,000 | 8,720,837 | |||||||||||||
KY State Property & Building #87 | 5.000 | 03/01/2027 | Aa3/A+*/A+@ | 10,290,000 | 10,862,227 | |||||||||||||
KY State Property & Building #88 | 5.000 | 11/01/2024 | Aa3/A+*/A+@ | 1,355,000 | 1,461,571 | |||||||||||||
KY State Property & Building #88 | 4.800 | 11/01/2027 | Aa3/A+*/A+@ | 5,800,000 | 6,102,412 | |||||||||||||
KY State Property & Building #76 | 5.500 | 08/01/2021 | Aa3/A+*/A+@ | 1,400,000 | 1,656,620 | |||||||||||||
KY State Property & Building #89 | 5.000 | 11/01/2025 | Aa3/AA-*/A+@ | 5,000,000 | 5,418,500 | |||||||||||||
KY State Property & Building #89 | 5.000 | 11/01/2026 | Aa3/AA-*/A+@ | 13,390,000 | 14,318,328 | |||||||||||||
KY State Property & Building #89 | 5.000 | 11/01/2027 | Aa3/AA-*/A+@ | 4,900,000 | 5,217,275 | |||||||||||||
KY State Property & Building #90 | 5.400 | 11/01/2023 | Aa3/A+*/A+@ | 1,200,000 | 1,348,547 | |||||||||||||
KY State Property & Building #90 | 5.500 | 11/01/2028 | Aa3/A+*/A+@ | 24,805,000 | 27,269,873 | |||||||||||||
KY State Property & Building #91 | 5.800 | 04/01/2029 | A1/A+*/A@ | 210,000 | 229,016 | |||||||||||||
KY State Property & Building #83 | 5.000 | 10/01/2017 | Aa3/A+*/A+@ | 5,000,000 | 5,712,400 | |||||||||||||
KY State Property & Building #106 | 5.000 | 10/01/2029 | Aa3/A+*/A+@ | 4,130,000 | 4,412,285 | |||||||||||||
KY State Property & Building #106 | 5.000 | 10/01/2032 | Aa3/A+*/A+@ | 6,000,000 | 6,253,500 | |||||||||||||
KY State Property & Building #106 | 5.000 | 10/01/2030 | Aa3/A+*/A+@ | 7,165,000 | 7,589,812 | |||||||||||||
KY State Property & Building #106 | 5.000 | 10/01/2031 | Aa3/A+*/A+@ | 4,910,000 | 5,153,094 | |||||||||||||
Ky State Property & Building #106 | 5.000 | 10/01/2033 | Aa3/A+*/A+@ | 4,870,000 | 5,052,333 | |||||||||||||
KY State Property & Building #105 | 4.800 | 04/01/2031 | A1/A+*/A@ | 2,110,000 | 2,160,661 | |||||||||||||
KY State Property & Building #105 | 4.800 | 04/01/2032 | A1/A+*/A@ | 2,205,000 | 2,244,514 | |||||||||||||
KY State Property & Building #105 | 4.800 | 04/01/2033 | A1/A+*/A@ | 2,310,000 | 2,344,419 | |||||||||||||
KY Association of Counties | 5.000 | 02/01/2030 | AA-* | 625,000 | 647,294 | |||||||||||||
KY Association of Counties | 5.000 | 02/01/2032 | AA-* | 1,000,000 | 1,028,180 | |||||||||||||
KY Association of Counties | 5.000 | 02/01/2035 | AA-* | 995,000 | 1,013,388 | |||||||||||||
KY Bond Corporation Finance Program | 5.500 | 02/01/2031 | AA-* | 1,115,000 | 1,190,307 | |||||||||||||
Pendleton County KY Multi-County Lease Revenue | 6.400 | 03/01/2019 | B* | 3,000,000 | 3,204,390 | |||||||||||||
|
| |||||||||||||||||
251,539,700 | ||||||||||||||||||
MUNICIPAL UTILITY REVENUE BONDS | ||||||||||||||||||
14.39% of Net Assets | ||||||||||||||||||
Campbell and Kenton Counties Sanitary District No. 1 | 5.000 | 08/01/2025 | Aa2/AA* | 2,395,000 | 2,593,809 | |||||||||||||
Campbell and Kenton Counties Sanitary Sewer | 5.000 | 08/01/2026 | Aa2/AA* | 4,175,000 | 4,452,178 | |||||||||||||
Campbell and Kenton Counties Sanitary Sewer | 5.000 | 08/01/2027 | Aa2/AA* | 4,385,000 | 4,656,212 | |||||||||||||
Campbell and Kenton Counties Sanitary District No. 1 | 5.000 | 08/01/2037 | Aa2/AA* | 11,220,000 | 11,624,818 | |||||||||||||
KY Infrastructure Authority Wastewater and Drinking Water | 5.000 | 02/01/2027 | Aaa/AAA*/AAA@ | 2,500,000 | 2,793,750 | |||||||||||||
KY Infrastructure Authority Wastewater and Drinking Water | 5.000 | 02/01/2028 | Aaa/AAA*/AAA@ | 2,000,000 | 2,216,180 | |||||||||||||
KY Rural Water Financial Corporation Public Project Revenue | 5.400 | 02/01/2020 | A+* | 395,000 | 395,470 |
The accompanying notes are an integral part of the financial statements.
6
Table of Contents
DUPREE MUTUAL FUNDS — KENTUCKY TAX-FREE INCOME SERIES | UNAUDITED |
SCHEDULE OF PORTFOLIO INVESTMENTS
Kentucky Municipal Bonds — 100% of Net Assets
December 31, 2013
Bond Description | Coupon | Maturity Date | Rating# | Par Value | Fair Value | |||||||||||||
KY Rural Water Finance Corporation | 5.100 | % | 02/01/2035 | A+* | $ | 525,000 | $ | 540,866 | ||||||||||
Kentucky Rural Water Financing Corporation | 4.500 | 02/01/2023 | A+* | 1,085,000 | 1,185,547 | |||||||||||||
Kentucky Rural Water Financing Corporation | 4.500 | 02/01/2024 | A+* | 880,000 | 947,945 | |||||||||||||
Louisville & Jefferson County Metropolitan Sewer | 5.000 | 05/15/2031 | Aa3/AA*/AA-@ | 2,465,000 | 2,624,239 | |||||||||||||
Louisville & Jefferson County Metropolitan Sewer | 5.000 | 05/15/2025 | Aa3/AA*/AA-@ | 3,270,000 | 3,472,609 | |||||||||||||
Louisville & Jefferson County Metropolitan Sewer | 5.000 | 05/15/2026 | Aa3/AA*/AA-@ | 3,230,000 | 3,417,082 | |||||||||||||
Louisville & Jefferson County Metropolitan Sewer | 5.000 | 05/15/2032 | Aa3/AA*/AA-@ | 4,590,000 | 4,767,541 | |||||||||||||
Louisville & Jefferson County Metropolitan Sewer | 5.000 | 05/15/2036 | Aa3/AA*/AA-@ | 2,000,000 | 2,053,400 | |||||||||||||
Louisville & Jefferson County Metropolitan Sewer | 5.000 | 05/15/2024 | Aa3/AA* | 7,000,000 | 7,612,150 | |||||||||||||
Louisville & Jefferson County Metropolitan Sewer | 5.000 | 05/15/2025 | Aa3/AA* | 5,185,000 | 5,660,102 | |||||||||||||
Louisville & Jefferson County Metropolitan Sewer | 5.000 | 05/15/2021 | Aa3/AA* | 2,865,000 | 3,250,486 | |||||||||||||
Louisville & Jefferson County Metropolitan Sewer | 5.000 | 05/15/2023 | Aa3/AA* | 2,500,000 | 2,774,400 | |||||||||||||
Louisville & Jefferson County Metropolitan Sewer | 5.000 | 05/15/2034 | Aa3/AA*/AA-@ | 27,730,000 | 29,107,904 | |||||||||||||
Louisville & Jefferson County KY Metropolitan Sewer District | 5.000 | 05/15/2022 | Aa3 | 975,000 | 1,015,999 | |||||||||||||
Louisville & Jefferson County KY Metropolitan Sewer District | 5.000 | 05/15/2023 | Aa3 | 1,020,000 | 1,061,616 | |||||||||||||
Louisville & Jefferson County KY Metropolitan Sewer District | 5.000 | 05/15/2024 | Aa3 | 1,070,000 | 1,112,030 | |||||||||||||
Louisville & Jefferson County KY Metropolitan Sewer District | 5.000 | 05/01/2025 | Aa3 | 1,120,000 | 1,162,906 | |||||||||||||
Louisville & Jefferson County Waterworks | 5.000 | 11/15/2027 | Aaa/AAA* | 2,000,000 | 2,159,640 | |||||||||||||
Louisville & Jefferson County Waterworks | 5.000 | 11/15/2031 | Aaa/AAA* | 10,695,000 | 11,373,170 | |||||||||||||
Louisville & Jefferson County Metropolitan Sewer District | 5.000 | 05/15/2026 | Aa3/AA* | 4,775,000 | 4,955,924 | |||||||||||||
Northern KY Water District | 4.500 | 02/01/2022 | Aa3 | 1,385,000 | 1,408,213 | |||||||||||||
Northern KY Water District | 6.000 | 02/01/2028 | Aa3 | 1,010,000 | 1,132,846 | |||||||||||||
Northern KY Water District | 6.000 | 02/01/2031 | Aa3 | 1,000,000 | 1,104,540 | |||||||||||||
Northern KY Water District | 6.500 | 02/01/2033 | Aa3 | 1,585,000 | 1,776,847 | |||||||||||||
Northern KY Water District | 5.000 | 02/01/2033 | Aa3 | 3,580,000 | 3,740,384 | |||||||||||||
Northern KY Water District | 5.000 | 02/01/2026 | Aa3 | 1,000,000 | 1,090,080 | |||||||||||||
Northern Ky Water District | 5.000 | 02/01/2027 | Aa3 | 4,315,000 | 4,663,005 | |||||||||||||
Owensboro Water Revenue | 5.000 | 09/15/2025 | A1 | 545,000 | 588,257 | |||||||||||||
|
| |||||||||||||||||
134,492,145 | ||||||||||||||||||
TURNPIKES/TOLLROAD/HIGHWAY BONDS | ||||||||||||||||||
11.73% of Net Assets | ||||||||||||||||||
KY Asset Liability Commission Federal Highway | 5.300 | 09/01/2019 | Aa3/AA*/A+@ | 1,765,000 | 2,057,443 | |||||||||||||
KY Asset Liability Project | 5.000 | 09/01/2021 | Aa3/AA*/A+@ | 1,570,000 | 1,785,828 | |||||||||||||
Kentucky Asset Liability Highway Trust | 5.000 | 09/01/2022 | Aa3/AA*/A+@ | 3,500,000 | 3,917,725 | |||||||||||||
KY State Turnpike Economic Development Road Revenue | 5.000 | 07/01/2022 | Aa2/AA+*/A+@ | 1,625,000 | 1,725,051 | |||||||||||||
KY State Turnpike Economic Development Road Revenue | 5.000 | 07/01/2023 | Aa2/AA+*/A+@ | 575,000 | 609,604 | |||||||||||||
KY State Turnpike Economic Development Road Revenue | 5.000 | 07/01/2025 | Aa2/AA+*/A+@ | 2,000,000 | 2,115,100 | |||||||||||||
KY State Turnpike Economic Development Road Revenue | 5.000 | 07/01/2026 | Aa2/AA+*/A+@ | 4,720,000 | 5,061,209 | |||||||||||||
KY State Turnpike Economic Development Road Revenue | 5.000 | 07/01/2025 | Aa2/AA+*/A+@ | 3,225,000 | 3,548,822 | |||||||||||||
KY State Turnpike Economic Development Road Revenue | 5.000 | 07/01/2027 | Aa2/AA+*/A+@ | 9,530,000 | 10,393,799 | |||||||||||||
KY State Turnpike Economic Development Road Revenue | 5.000 | 07/01/2028 | Aa2/AA+*/A+@ | 2,460,000 | 2,667,821 | |||||||||||||
KY State Turnpike Economic Development Road Revenue | 5.000 | 07/01/2026 | Aa2/AA+*/A+@ | 4,440,000 | 4,875,342 | |||||||||||||
KY State Turnpike Economic Development Road Revenue | 5.000 | 07/01/2027 | Aa2/AA+*/A+@ | 3,080,000 | 3,364,068 | |||||||||||||
KY State Turnpike Economic Development Road Revenue | 5.000 | 07/01/2029 | Aa2/AA+*/A+@ | 10,035,000 | 10,813,414 | |||||||||||||
KY State Turnpike Economic Development Road Revenue | 5.000 | 07/01/2025 | Aa2/AA+*/A+@ | 3,775,000 | 4,203,614 | |||||||||||||
KY State Turnpike Economic Development Road Revenue | 5.000 | 07/01/2029 | Aa2/AA+*/A+@ | 5,165,000 | 5,548,760 | |||||||||||||
KY State Turnpike Economic Development Road Revenue | 5.000 | 07/01/2030 | Aa2/AA+*/A+@ | 1,845,000 | 1,974,630 | |||||||||||||
KY State Turnpike Economic Development Road Revenue | 5.000 | 07/01/2028 | Aa2/AA+*/A+@ | 4,930,000 | 5,367,537 | |||||||||||||
KY State Turnpike Economic Development Road Revenue | 5.000 | 07/01/2030 | Aa2/AA+*/A+@ | 1,465,000 | 1,587,254 | |||||||||||||
KY State Turnpike Economic Development Road Revenue | 5.000 | 07/01/2031 | Aa2/AA+*/A+@ | 9,350,000 | 10,011,232 | |||||||||||||
KY State Turnpike Economic Development Road Revenue | 5.000 | 07/01/2029 | Aa2/AA+*/A+@ | 7,235,000 | 7,816,983 | |||||||||||||
Ky State Turnpike Economic Development Road Revenue | 5.000 | 07/01/2032 | Aa2/AA+*/A+@ | 8,755,000 | 9,296,322 | |||||||||||||
KY Asset Liability Commission Federal Highway Trust | 5.300 | 09/01/2025 | Aa3/AA*/A+@ | 3,400,000 | 3,810,176 | |||||||||||||
Kentucky State Turnpike Economic Development | 5.000 | 07/01/2024 | Aa2/AA+*/A+@ | 1,500,000 | 1,697,160 | |||||||||||||
KY Turnpike Authority Economic Development Road Revenue | 5.000 | 07/01/2033 | Aa2/AA+*/A+@ | 5,000,000 | 5,330,850 | |||||||||||||
|
| |||||||||||||||||
109,579,744 |
The accompanying notes are an integral part of the financial statements.
7
Table of Contents
DUPREE MUTUAL FUNDS — KENTUCKY TAX-FREE INCOME SERIES | UNAUDITED |
SCHEDULE OF PORTFOLIO INVESTMENTS
Kentucky Municipal Bonds — 100% of Net Assets
December 31, 2013
Bond Description | Coupon | Maturity Date | Rating# | Par Value | Fair Value | |||||||||||||
PREREFUNDED BONDS | ||||||||||||||||||
10.27% of Net Assets | ||||||||||||||||||
Barren County KY School District Finance Corporation | 4.800 | % | 08/01/2022 | Aa3 | $ | 3,085,000 | $ | 3,166,413 | ||||||||||
Boone County KY School District Finance Corporation | 5.000 | 05/01/2024 | Aa3 | 1,765,000 | 1,792,975 | |||||||||||||
Davies County KY School District Finance Corporation | 5.000 | 06/01/2021 | Aa3 | 1,155,000 | 1,177,730 | |||||||||||||
Eastern Kentucky University Consolidated Education Building | 5.000 | 05/01/2021 | Baa1/A* | 1,580,000 | 1,604,601 | |||||||||||||
Fayette County KY School District Finance Corporation | 5.000 | 04/01/2024 | Aa2/AA-* | 6,985,000 | 7,393,343 | |||||||||||||
Fayette County KY School District Finance Corporation | 5.000 | 04/01/2025 | Aa2/AA-* | 7,340,000 | 7,769,096 | |||||||||||||
Jefferson County KY School District Finance Corporation | 4.500 | 07/01/2023 | Aa2/AA-* | 2,500,000 | 2,746,825 | |||||||||||||
Jefferson County KY School District Finance Corporation | 4.600 | 07/01/2025 | Aa2/AA-* | 7,545,000 | 8,313,307 | |||||||||||||
Jefferson County KY School District Finance Corporation | 5.000 | 07/01/2026 | Aa2/AA-* | 5,025,000 | 5,583,428 | |||||||||||||
Kenton County KY School District Finance Corporation | 5.000 | 06/01/2021 | Aa3 | 4,055,000 | 4,134,802 | |||||||||||||
KY State Property & Building #85 | 5.000 | 08/01/2020 | Aa3/AA-* | 5,760,000 | 6,182,496 | |||||||||||||
KY State Property & Building #85 | 5.000 | 08/01/2022 | Aa3/AA-* | 5,200,000 | 5,581,420 | |||||||||||||
KY State Property & Building #85 | 5.000 | 08/01/2024 | Aa3/AA-* | 8,300,000 | 8,908,805 | |||||||||||||
KY State Property & Building #85 | 5.000 | 08/01/2025 | Aa3/AA-* | 2,500,000 | 2,685,875 | |||||||||||||
Knox County General Obligation | 5.600 | 06/01/2036 | NR | 2,490,000 | 2,734,618 | |||||||||||||
Letcher County KY School District Finance Corporation | 5.000 | 06/01/2022 | Aa3 | 1,755,000 | 1,788,872 | |||||||||||||
Letcher County KY School District Finance Corporation | 5.000 | 06/01/2024 | Aa3 | 1,930,000 | 1,967,249 | |||||||||||||
Louisville & Jefferson County KY Metropolitan Sewer District | 5.000 | 05/15/2015 | Aa3/AA-* | 1,880,000 | 2,001,166 | |||||||||||||
Louisville & Jefferson County KY Metropolitan Sewer District | 5.000 | 05/15/2015 | Aa3/AA-* | 1,970,000 | 2,096,967 | |||||||||||||
Louisville & Jefferson County KY Metropolitan Sewer District | 5.000 | 05/15/2015 | Aa3/AA-* | 2,065,000 | 2,198,089 | |||||||||||||
Louisville & Jefferson County KY Metropolitan Sewer District | 5.000 | 05/15/2015 | Aa3/AA-* | 2,165,000 | 2,304,534 | |||||||||||||
Louisville & Jefferson County Metropolitan Health — St. Mary’s | 6.100 | 02/01/2037 | NR | 1,300,000 | 1,564,745 | |||||||||||||
Louisville & Jefferson County Metropolitan Sewer | 5.000 | 05/15/2026 | Aa3/AA-* | 9,225,000 | 9,819,552 | |||||||||||||
Marshall County KY School District Finance Corporation | 5.000 | 06/01/2022 | Aa3 | 1,400,000 | 1,427,440 | |||||||||||||
Spencer County KY School District Finance Corporation | 5.000 | 07/01/2023 | Aa3 | 1,000,000 | 1,023,670 | |||||||||||||
|
| |||||||||||||||||
95,968,018 | ||||||||||||||||||
REFUNDED BONDS | ||||||||||||||||||
9.67% of Net Assets | ||||||||||||||||||
KY State Property & Building #80 | 5.300 | 05/01/2018 | Aa3/A+*/A+@ | 2,940,000 | 3,404,843 | |||||||||||||
KY State Property & Building #80 | 5.300 | 05/01/2020 | Aa3/A+*/A+@ | 1,000,000 | 1,165,220 | |||||||||||||
KY State Property & Building #83 | 5.000 | 10/01/2018 | Aa3/A+*/A+@ | 17,750,000 | 20,543,494 | |||||||||||||
KY State Property & Building #83 | 5.300 | 10/01/2020 | Aa3/A+*/A+@ | 24,220,000 | 28,381,723 | |||||||||||||
KY State Property & Building #84 | 5.000 | 08/01/2019 | Aa3/A+*/A+@ | 10,000,000 | 11,594,400 | |||||||||||||
KY State Property & Building #84 | 5.000 | 08/01/2021 | Aa3/A+*/A+@ | 310,000 | 356,299 | |||||||||||||
KY State Property & Building #84 | 5.000 | 08/01/2022 | Aa3/A+*/A+@ | 18,000,000 | 20,632,680 | |||||||||||||
KY State Property & Building #102 | 5.000 | 05/01/2024 | Aa3/A+*/A+@ | 405,000 | 451,450 | |||||||||||||
KY State Property & Building #104 | 5.000 | 11/01/2021 | A1/A+*/A@ | 2,085,000 | 2,381,925 | |||||||||||||
KY State Property & Building #104 | 5.000 | 11/01/2022 | A1/A+*/A@ | 1,290,000 | 1,465,259 | |||||||||||||
|
| |||||||||||||||||
90,377,293 | ||||||||||||||||||
UNIVERSITY CONSOLIDATED EDUCATION AND BUILDING REVENUE BONDS | ||||||||||||||||||
5.73% of Net Assets | ||||||||||||||||||
Boyle County KY College Improvement — Centre College — A | 4.800 | 06/01/2032 | A3/AA-* | 5,330,000 | 5,385,005 | |||||||||||||
KY Asset Liability Commission University of KY Project Note | 5.000 | 10/01/2023 | Aa2/AA-* | 8,075,000 | 8,569,836 | |||||||||||||
KY Asset Liability Commission University of KY Project Note | 5.000 | 10/01/2024 | Aa2/AA-* | 7,405,000 | 7,854,780 | |||||||||||||
KY Asset Liability Commission University of KY Project Note | 5.000 | 10/01/2025 | Aa2/AA-* | 3,700,000 | 3,924,738 | |||||||||||||
KY Asset Liability Commission University of KY Project Note | 5.000 | 10/01/2024 | Aa2/AA-* | 5,445,000 | 5,939,406 | |||||||||||||
KY Asset Liability Commission University of KY Project Note | 5.000 | 10/01/2026 | Aa2/AA-* | 6,090,000 | 6,550,039 | |||||||||||||
Louisville & Jefferson County University of Louisville Housing | 5.000 | 06/01/2025 | NR | 2,030,000 | 2,075,350 | |||||||||||||
Louisville & Jefferson County Univeristy of Louisville | 4.800 | 03/01/2028 | Aa2/AA-* | 3,250,000 | 3,425,435 | |||||||||||||
University of Louisville General Receipts | 5.000 | 09/01/2029 | Aa2/AA-* | 2,280,000 | 2,438,460 | |||||||||||||
University of Louisville | 5.000 | 09/01/2030 | Aa2/AA-* | 440,000 | 467,289 | |||||||||||||
University of Louisville | 5.000 | 09/01/2031 | Aa2/AA-* | 2,580,000 | 2,720,868 | |||||||||||||
Western KY University | 4.800 | 09/01/2033 | Aa3/A+* | 2,505,000 | 2,629,649 | |||||||||||||
Western KY University | 5.000 | 05/01/2032 | Aa3/A+* | 1,500,000 | 1,586,805 | |||||||||||||
|
| |||||||||||||||||
53,567,660 |
The accompanying notes are an integral part of the financial statements.
8
Table of Contents
DUPREE MUTUAL FUNDS — KENTUCKY TAX-FREE INCOME SERIES | UNAUDITED |
SCHEDULE OF PORTFOLIO INVESTMENTS
Kentucky Municipal Bonds — 100% of Net Assets
December 31, 2013
Bond Description | Coupon | Maturity Date | Rating# | Par Value | Fair Value | |||||||||||||
HOSPITAL AND HEALTHCARE BONDS | ||||||||||||||||||
5.36% of Net Assets | ||||||||||||||||||
Lexington-Fayette Urban County Government Healthcare | 5.300 | % | 06/01/2028 | Aa3/A+*/A+@ | $ | 1,000,000 | $ | 1,051,320 | ||||||||||
Lexington-Fayette Urban County Government Public Facilities | 5.000 | 06/01/2033 | Aa3/A+*/A+@ | 5,000,000 | 5,064,700 | |||||||||||||
Lexington-Fayette Urban County Government | 5.300 | 06/01/2032 | Aa3/A+*/A+@ | 1,500,000 | 1,554,915 | |||||||||||||
Louisville & Jefferson County Metropolitan Health—Norton Healthcare | 5.500 | 10/01/2033 | A-*/A-@ | 2,000,000 | 2,016,340 | |||||||||||||
KY Development Finance Authority — St. Elizabeth | 5.500 | 05/01/2039 | AA*/AA@ | 1,000,000 | 1,046,880 | |||||||||||||
KY Development Finance Authority — Baptist Heathcare | 5.400 | 08/15/2024 | A2/A+@ | 1,205,000 | 1,304,883 | |||||||||||||
KY Development Finance Authority — Baptist Healthcare | 5.600 | 08/15/2027 | A2/A+@ | 4,855,000 | 5,263,548 | |||||||||||||
KY Development Finance Authority — St. Elizabeth | 5.100 | 05/01/2029 | AA*/AA@ | 2,750,000 | 2,856,948 | |||||||||||||
KY Development Finance Authority — St. Elizabeth | 5.400 | 05/01/2034 | AA*/AA@ | 2,560,000 | 2,694,733 | |||||||||||||
KY Development Finance Authority — Catholic Health | 5.000 | 05/01/2029 | A1/A+*/A+@ | 2,500,000 | 2,515,200 | |||||||||||||
KY Development Finance Authority — Catholic Health | 5.000 | 05/01/2029 | A1/A+*/A+@ | 2,410,000 | 2,488,349 | |||||||||||||
Louisville & Jefferson Metropolitan Government Health | 5.000 | 10/01/2026 | A-*/A-@ | 535,000 | 540,157 | |||||||||||||
Louisville & Jefferson County Metropolitan Health — Norton Health | 5.000 | 10/01/2030 | A-*/A-@ | 2,000,000 | 1,962,040 | |||||||||||||
Louisville & Jefferson County Metropolitan Health — Norton Health | 5.300 | 10/01/2036 | A-*/A-@ | 3,460,000 | 3,387,755 | |||||||||||||
Louisville & Jefferson County Catholic Health Initiatives | 5.000 | 12/01/2030 | A1/A+*/A+@ | 1,000,000 | 1,042,500 | |||||||||||||
Louisville & Jefferson County Catholic Health Initiatives | 5.000 | 12/01/2035 | A1/A+*/A+@ | 7,685,000 | 7,544,134 | |||||||||||||
Louisville and Jefferson County Catholic Health Initiatives | 5.000 | 12/01/2031 | A1/A+*/A+@ | 2,750,000 | 2,837,560 | |||||||||||||
Pike County KY Mortgage Revenue — Phelps Regional Health | 5.700 | 09/20/2027 | NR | 2,320,000 | 2,320,905 | |||||||||||||
Warren County Hospital | 5.000 | 04/01/2028 | A* | 2,475,000 | 2,546,849 | |||||||||||||
|
| |||||||||||||||||
50,039,716 | ||||||||||||||||||
SCHOOL IMPROVEMENT BONDS | ||||||||||||||||||
4.68% of Net Assets | ||||||||||||||||||
Laurel County KY School District Finance Corporation | 4.800 | 06/01/2026 | Aa3 | 1,000,000 | 1,029,820 | |||||||||||||
Campbell County KY School District Finance Corporation | 4.500 | 08/01/2023 | Aa3 | 980,000 | 1,029,725 | |||||||||||||
Fayette County School District Finance Corporation | 5.000 | 06/01/2031 | Aa3/AA-* | 3,705,000 | 3,906,588 | |||||||||||||
Fayette County School District Finance Corporation | 5.000 | 10/01/2029 | Aa3/AA-* | 3,660,000 | 3,916,237 | |||||||||||||
Fayette County School District Finance Corporation | 5.000 | 10/01/2032 | Aa3/AA-* | 3,615,000 | 3,785,230 | |||||||||||||
Fayette County School District Finance Corporation | 5.000 | 10/01/2033 | Aa3/AA-* | 4,385,000 | 4,549,174 | |||||||||||||
Franklin County School Building Revenue | 4.800 | 05/01/2027 | Aa3 | 3,570,000 | 3,750,428 | |||||||||||||
Hardin County School District Finance Corporation | 4.800 | 06/01/2027 | Aa3 | 1,250,000 | 1,282,038 | |||||||||||||
Hardin County School District Finance Corporation | 5.000 | 05/01/2030 | Aa3 | 450,000 | 468,171 | |||||||||||||
Hardin County School District Finance Corporation | 5.000 | 05/01/2031 | Aa3 | 470,000 | 484,810 | |||||||||||||
Jefferson County KY School District Finance Corporation | 4.800 | 12/01/2026 | Aa2/AA-* | 3,770,000 | 3,975,540 | |||||||||||||
Jefferson County KY School District Finance Corporation | 4.800 | 06/01/2027 | Aa2/AA-* | 3,000,000 | 3,145,320 | |||||||||||||
Kenton County School District Finance Corporation | 5.000 | 02/01/2029 | Aa3 | 3,270,000 | 3,405,215 | |||||||||||||
Laurel County KY School District Finance Corporation | 4.600 | 08/01/2026 | Aa3 | 3,150,000 | 3,279,434 | |||||||||||||
Scott County School District Finance Corporation | 4.500 | 01/01/2025 | Aa3 | 4,890,000 | 5,231,762 | |||||||||||||
Shelby County KY School District Finance Corporation | 5.000 | 02/01/2028 | Aa3 | 500,000 | 520,910 | |||||||||||||
|
| |||||||||||||||||
43,760,402 | ||||||||||||||||||
PUBLIC FACILITIES REVENUE BONDS | ||||||||||||||||||
3.37% of Net Assets | ||||||||||||||||||
Bracken County Public Property | 5.000 | 08/01/2029 | Aa3 | 840,000 | 890,501 | |||||||||||||
Franklin County Public Properties Justice Center | 5.000 | 04/01/2029 | Aa3 | 2,630,000 | 2,746,798 | |||||||||||||
Wolfe County Public Property | 5.000 | 04/01/2030 | Aa3 | 2,855,000 | 3,050,396 | |||||||||||||
Taylor County Detention Facility | 4.800 | 09/01/2027 | Aa3 | 2,110,000 | 2,133,569 | |||||||||||||
Louisville & Jefferson County International Convention Center | 4.500 | 12/01/2023 | A2/AA-* | 2,340,000 | 2,383,454 | |||||||||||||
Louisville & Jefferson County International Convention Center | 4.500 | 12/01/2024 | A2/AA-* | 2,250,000 | 2,281,478 | |||||||||||||
Louisville & Jefferson County International Convention Center | 4.600 | 12/01/2025 | A2/AA-* | 1,490,000 | 1,510,026 | |||||||||||||
Louisville & Jefferson County Metropolitan Parking Authority | 5.000 | 12/01/2022 | Aa2/AA* | 625,000 | 695,512 | |||||||||||||
Louisville & Jefferson County Metropolitan Parking Authority | 5.800 | 12/01/2034 | Aa2/AA* | 2,750,000 | 3,101,478 | |||||||||||||
River City, Inc. Parking Authority | 4.800 | 06/01/2027 | Aa2/AA* | 750,000 | 802,868 | |||||||||||||
River City, Inc. Parking Authority | 4.800 | 06/01/2028 | Aa2/AA* | 940,000 | 998,627 | |||||||||||||
River City, Inc. Parking Authority | 4.800 | 06/01/2030 | Aa2/AA* | 1,025,000 | 1,072,499 | |||||||||||||
River City, Inc. Parking Authority | 4.800 | 06/01/2029 | Aa2/AA* | 1,160,000 | 1,220,227 | |||||||||||||
River City, Inc. Parking Authority | 4.800 | 06/01/2031 | Aa2/AA* | 1,270,000 | 1,317,816 |
The accompanying notes are an integral part of the financial statements.
9
Table of Contents
DUPREE MUTUAL FUNDS — KENTUCKY TAX-FREE INCOME SERIES | UNAUDITED |
SCHEDULE OF PORTFOLIO INVESTMENTS
Kentucky Municipal Bonds — 100% of Net Assets
December 31, 2013
Bond Description | Coupon | Maturity Date | Rating# | Par Value | Fair Value | |||||||||||||
River City, Inc. Parking Authority | 4.800 | % | 06/01/2029 | Aa2/AA* | $ | 980,000 | $ | 1,030,881 | ||||||||||
River City, Inc. Parking Authority | 5.000 | 06/01/2033 | Aa2/AA* | 1,395,000 | 1,471,014 | |||||||||||||
River City, Inc. Parking Authority | 5.000 | 06/01/2031 | Aa2/AA* | 1,080,000 | 1,150,048 | |||||||||||||
River City Inc. Parking Authority | 5.000 | 06/01/2032 | Aa2/AA* | 1,130,000 | 1,196,965 | |||||||||||||
Warren County Downtown Economic Development Authority | 5.000 | 06/01/2038 | AA-* | 2,345,000 | 2,430,170 | |||||||||||||
|
| |||||||||||||||||
31,484,327 | ||||||||||||||||||
ESCROWED TO MATURITY BONDS | ||||||||||||||||||
3.19% of Net Assets | ||||||||||||||||||
Jefferson County KY Health Facilities — Alliant Health | 5.100 | 10/01/2017 | A* | 3,980,000 | 4,209,527 | |||||||||||||
Jefferson County KY Health Facilities — Alliant Health | 5.100 | 10/01/2018 | A* | 23,905,000 | 25,557,791 | |||||||||||||
|
| |||||||||||||||||
29,767,318 | ||||||||||||||||||
STATE AND LOCAL MORTGAGE/HOUSING BONDS | ||||||||||||||||||
2.15% of Net Assets | ||||||||||||||||||
Greater KY Housing Assistance Corporation — Chenowith Woods | 6.100 | 01/01/2024 | Baa1/A* | 390,000 | 390,218 | |||||||||||||
KY Economic Development Finance Authority — Christian Care | 5.400 | 11/20/2035 | AA+* | 1,905,000 | 1,965,484 | |||||||||||||
KY Housing Corporation Country Place Apartments | 4.800 | 04/20/2031 | AA+* | 935,000 | 946,108 | |||||||||||||
KY Housing Corporation | 4.800 | 07/01/2032 | Aaa/AAA* | 1,265,000 | 1,271,667 | |||||||||||||
KY Housing Corporation | 4.900 | 07/01/2028 | Aaa/AAA* | 2,000,000 | 2,032,120 | |||||||||||||
KY Housing Corporation | 5.000 | 07/01/2033 | Aaa/AAA* | 2,270,000 | 2,290,294 | |||||||||||||
KY Housing Corporation | 4.900 | 07/01/2023 | Aaa/AAA* | 1,535,000 | 1,569,383 | |||||||||||||
KY Housing Corporation | 4.900 | 07/01/2029 | Aaa/AAA* | 3,200,000 | 3,265,440 | |||||||||||||
KY Housing Corporation | 5.200 | 07/01/2039 | Aaa/AAA* | 2,185,000 | 2,221,555 | |||||||||||||
KY Housing Corporation | 4.800 | 07/01/2035 | Aaa/AAA* | 4,140,000 | 4,140,000 | |||||||||||||
|
| |||||||||||||||||
20,092,269 | ||||||||||||||||||
AIRPORT BONDS | ||||||||||||||||||
.79% of Net Assets | ||||||||||||||||||
Lexington-Fayette Urban County Airport Board | 5.000 | 07/01/2030 | Aa2/AA* | 1,250,000 | 1,322,700 | |||||||||||||
Lexington-Fayette Urban County Airport Board | 5.000 | 07/01/2032 | Aa2/AA* | 1,430,000 | 1,500,642 | |||||||||||||
Lexington-Fayette Urban County Airport Board | 5.000 | 07/01/2033 | Aa2/AA* | 1,520,000 | 1,585,193 | |||||||||||||
Lexington-Fayette Urban County Airport Board | 5.000 | 07/01/2038 | Aa2/AA* | 1,720,000 | 1,759,440 | |||||||||||||
Lexington-Fayette Urban County Government Airport | 5.000 | 07/01/2028 | Aa2/AA* | 1,170,000 | 1,253,608 | |||||||||||||
|
| |||||||||||||||||
7,421,583 | ||||||||||||||||||
MISCELLANEOUS REVENUE BONDS | ||||||||||||||||||
.24% of Net Assets | ||||||||||||||||||
KY State Property & Building #106 | 5.000 | 10/01/2028 | Aa3/A+*/A+@ | 2,030,000 | 2,187,345 | |||||||||||||
|
| |||||||||||||||||
Total Investments (cost $893,280,835) (See (a) below for further explanation) 98.49% of Net Assets |
| $ | 920,277,520 | |||||||||||||||
|
| |||||||||||||||||
Other assets in excess of liabilities 1.51% |
| 14,057,209 | ||||||||||||||||
|
| |||||||||||||||||
Net Assets 100% |
| $ | 934,334,729 | |||||||||||||||
|
|
* | Standard and Poor’s Corporation |
@ | Fitch’s Investors Service |
(All other ratings by Moody’s Investors Service, Inc.) |
NR | Not Rated |
# | Bond ratings are unaudited and not covered by Report of Independent Registered Public Accounting Firm. |
(a) | Cost for federal income tax purposes is $893,247,317 and net unrealized appreciation of investments is as follows: |
Unrealized appreciation | $ | 35,718,910 | ||||
Unrealized depreciation | (8,688,707 | ) | ||||
|
| |||||
Net unrealized appreciation | $ | 27,030,203 | ||||
|
|
The accompanying notes are an integral part of the financial statements.
10
Table of Contents
DUPREE MUTUAL FUNDS — KENTUCKY TAX-FREE INCOME SERIES | UNAUDITED |
SCHEDULE OF PORTFOLIO INVESTMENTS
Kentucky Municipal Bonds — 100% of Net Assets
December 31, 2013
Other Information
The following is a summary of the inputs used, as of December 31, 2013 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.
The Fund held no investments or other financial instruments as of December 31, 2013 whose fair value was determined using Level 3 inputs. There were no transfers in and out of level 1, 2 or 3 during the period ending December 31, 2013.
Valuation Inputs | Municipal Bonds | |||||
Level 1 | Quoted Prices | $ | — | |||
Level 2 | Other Significant Observable Inputs | 920,277,520 | ||||
Level 3 | Significant Unobservable Inputs | — | ||||
|
| |||||
$ | 920,277,520 | |||||
|
|
The accompanying notes are an integral part of the financial statements.
11
Table of Contents
KENTUCKY TAX-FREE INCOME SERIES
STATEMENT OF ASSETS AND LIABILITIES
December 31, 2013 | UNAUDITED |
ASSETS: | ||||||||
Investments in securities, at fair value (Cost: $893,280,835) |
| $ | 920,277,520 | |||||
Cash | 9,130,704 | |||||||
Receivable for fund shares sold | 18,719 | |||||||
Interest receivable | 12,751,515 | |||||||
|
| |||||||
Total assets | 942,178,458 | |||||||
LIABILITIES: | ||||||||
Payable for: | ||||||||
Investments purchased | 2,147,136 | |||||||
Distributions to shareholders | 3,758,175 | |||||||
Fund shares redeemed | 1,194,791 | |||||||
Investment advisory fee | 300,971 | |||||||
Transfer agent fee | 97,438 | |||||||
Trustees fees | 49,961 | |||||||
Accrued expenses | 295,257 | |||||||
|
| |||||||
Total liabilities | 7,843,729 | |||||||
|
| |||||||
NET ASSETS: | ||||||||
Capital | 907,107,089 | |||||||
Accumulated net investment income |
| 33,518 | ||||||
Net accumulated realized gain on investment transactions |
| 197,437 | ||||||
Net unrealized appreciation in value of investments |
| 26,996,685 | ||||||
|
| |||||||
Net assets at value | $ | 934,334,729 | ||||||
|
| |||||||
NET ASSET VALUE, offering price and redemption price per share | $ | 7.65 | ||||||
|
|
STATEMENT OF OPERATIONS
For the six months ended December 31, 2013
Net investment income: | ||||
Interest income | $ | 18,864,075 | ||
|
| |||
Expenses: | ||||
Investment advisory fee | 1,783,862 | |||
Transfer agent fee | 577,828 | |||
Custodian expense | 47,997 | |||
Professional fees | 102,085 | |||
Trustees fees | 54,390 | |||
Other expenses | 113,051 | |||
|
| |||
Total expenses | 2,679,213 | |||
Custodian expense reduction | (106 | ) | ||
|
| |||
Net expenses | 2,679,107 | |||
|
| |||
Net investment income | 16,184,968 | |||
|
| |||
Realized and unrealized gain/(loss) on investments: | ||||
Net realized gain | 1,184,818 | |||
Net change in unrealized appreciation/depreciation | (11,249,916 | ) | ||
|
| |||
Net realized and unrealized loss on investments | (10,065,098 | ) | ||
|
| |||
Net increase in net assets resulting from operations | $ | 6,119,870 | ||
|
|
The accompanying notes are an integral part of the financial statements.
12
Table of Contents
KENTUCKY TAX-FREE INCOME SERIES
STATEMENTS OF CHANGES IN NET ASSETS
For the six months ended December 31, 2013 and the year ended June 30, 2013 | UNAUDITED |
Six Months Ended 12/31/2013 | One Year Ended 6/30/2013 | |||||||
Operations: | ||||||||
Net investment income | $ | 16,184,968 | $ | 33,453,684 | ||||
Net realized gain on investments | 1,184,818 | 382,491 | ||||||
Net change in unrealized appreciation/depreciation | (11,249,916 | ) | (31,045,800 | ) | ||||
|
|
|
| |||||
Net increase in net assets resulting from operations | 6,119,870 | 2,790,375 | ||||||
Distributions from net investment income | (16,180,744 | ) | (33,471,869 | ) | ||||
Distributions from capital gains | (1,302,574 | ) | (146,341 | ) | ||||
Net fund share transactions (Note 4) | (2,578,199 | ) | (10,299,757 | ) | ||||
|
|
|
| |||||
Total (decrease) | (13,941,647 | ) | (41,127,592 | ) | ||||
Net assets: | ||||||||
Beginning of period | 948,276,376 | 989,403,968 | ||||||
|
|
|
| |||||
End of period | $ | 934,334,729 | $ | 948,276,376 | ||||
|
|
|
| |||||
Accumulated net investment income | $ | 33,518 | $ | 29,294 | ||||
|
|
|
|
FINANCIAL HIGHLIGHTS
Selected data for a share outstanding: | Six Months Ended 12/31/13 | For the years ended June 30, | ||||||||||||||||||||||
2013 | 2012 | 2011 | 2010 | 2009 | ||||||||||||||||||||
Net asset value, beginning of year | $ | 7.74 | $ | 7.99 | $ | 7.63 | $ | 7.67 | $ | 7.49 | $ | 7.39 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Income from investment operations: | ||||||||||||||||||||||||
Net investment income | 0.13 | 0.27 | 0.28 | 0.29 | 0.29 | 0.29 | ||||||||||||||||||
Net gains/(losses) on securities, | ||||||||||||||||||||||||
both realized and unrealized | (0.08 | ) | (0.25 | ) | 0.39 | (0.02 | ) | 0.20 | 0.11 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total from investment operations | 0.05 | 0.02 | 0.67 | 0.27 | 0.49 | 0.40 | ||||||||||||||||||
Less distributions: | ||||||||||||||||||||||||
Distributions from net investment income | (0.13 | ) | (0.27 | ) | (0.28 | ) | (0.29 | ) | (0.29 | ) | (0.29 | ) | ||||||||||||
Distributions from capital gains | (0.01 | ) | 0.00 | (b) | (0.03 | ) | (0.02 | ) | (0.02 | ) | (0.01 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total distributions | (0.14 | ) | (0.27 | ) | (0.31 | ) | (0.31 | ) | (0.31 | ) | (0.30 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net asset value, end of period | $ | 7.65 | $ | 7.74 | $ | 7.99 | $ | 7.63 | $ | 7.67 | $ | 7.49 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total return | 0.71% | (c) | 0.17% | 8.97% | 3.57% | 6.58% | 5.65% | |||||||||||||||||
Net assets, end of period (in thousands) | $ | 934,335 | $ | 948,276 | $ | 989,404 | $ | 896,625 | $ | 882,897 | $ | 788,923 | ||||||||||||
Ratio of net expenses to average net assets (a) | 0.58% | (d) | 0.57% | 0.57% | 0.58% | 0.58% | 0.58% | |||||||||||||||||
Ratio of net investment income to average net assets | 3.48% | (d) | 3.35% | 3.60% | 3.78% | 3.81% | 3.99% | |||||||||||||||||
Portfolio turnover | 6.23% | (c) | 7.02% | 8.39% | 11.42% | 4.76% | 6.09% |
(a) | Percentages are after custodian reduction for which no recovery will be sought. |
Percentages before custodian reductions were: |
0.58% | (d) | For the six months ended December 31, 2013 | ||||
0.57% | For the year ended June 30, 2013 | |||||
0.57% | For the year ended June 30, 2012 | |||||
0.58% | For the year ended June 30, 2011 | |||||
0.58% | For the year ended June 30, 2010 | |||||
0.58% | For the year ended June 30, 2009 |
(b) | Rounds to less than $0.01. |
(c) | Not annualized |
(d) | Annualized |
The accompanying notes are an integral part of the financial statements.
13
Table of Contents
DUPREE MUTUAL FUNDS — KENTUCKY TAX-FREE SHORT-TO-MEDIUM SERIES | UNAUDITED |
SCHEDULE OF PORTFOLIO INVESTMENTS
Kentucky Municipal Bonds — 100% of Net Assets
December 31, 2013
Bond Description | Coupon | Maturity Date | Rating# | Par Value | Fair Value | |||||||||||||
MISCELLANEOUS PUBLIC IMPROVEMENT BONDS | ||||||||||||||||||
25.04% of Net Assets | ||||||||||||||||||
KY State Property & Building #94 | 5.000 | % | 05/01/2017 | Aa2/A+*/A+@ | $ | 500,000 | $ | 561,544 | ||||||||||
KY State Property & Building #95 | 5.000 | 08/01/2017 | Aa3/A+*/A+@ | 200,000 | 227,482 | |||||||||||||
KY State Property & Building #100 | 5.000 | 08/01/2019 | Aa3/A+*/A+@ | 100,000 | 115,887 | |||||||||||||
KY State Property & Building #100 | 5.000 | 08/01/2017 | Aa3/A+*/A+@ | 500,000 | 568,704 | |||||||||||||
KY State Property & Building #87 | 5.000 | 03/01/2017 | Aa3/A+*/A+@ | 850,000 | 954,295 | |||||||||||||
KY State Property & Building #87 | 5.000 | 03/01/2018 | Aa3/A+*/A+@ | 100,000 | 111,573 | |||||||||||||
KY State Property & Building #87 | 5.000 | 03/01/2020 | Aa3/A+*/A+@ | 4,500,000 | 4,931,010 | |||||||||||||
KY State Property & Building #88 | 5.000 | 11/01/2014 | Aa3/A+*/A+@ | 250,000 | 259,727 | |||||||||||||
KY State Property & Building #88 | 5.000 | 11/01/2015 | Aa3/A+*/A+@ | 955,000 | 1,033,511 | |||||||||||||
KY State Property & Building #89 | 5.000 | 11/01/2015 | Aa3/AA-*/A+@ | 2,230,000 | 2,413,328 | |||||||||||||
KY State Property & Building #89 | 3.800 | 11/01/2017 | Aa3/AA-*/A+@ | 100,000 | 109,722 | |||||||||||||
KY State Property & Building #76 | 5.500 | 08/01/2017 | Aa3/A+*/A+@ | 190,000 | 219,439 | |||||||||||||
KY State Property & Building #76 | 5.500 | 08/01/2018 | Aa3/A+*/A+@ | 1,415,000 | 1,664,083 | |||||||||||||
KY State Property & Building #89 | 5.000 | 11/01/2020 | Aa3/AA-*/A+@ | 200,000 | 227,408 | |||||||||||||
KY State Property & Building #90 | 5.000 | 11/01/2015 | Aa3/A+*/A+@ | 250,000 | 270,407 | |||||||||||||
KY State Property & Building #90 | 5.000 | 11/01/2018 | Aa3/A+*/A+@ | 250,000 | 289,883 | |||||||||||||
KY State Property & Building #90 | 5.800 | 11/01/2019 | Aa3/A+*/A+@ | 200,000 | 236,408 | |||||||||||||
KY State Property & Building #90 | 5.000 | 11/01/2020 | Aa3/A+*/A+@ | 495,000 | 563,325 | |||||||||||||
KY State Property & Building #83 | 5.000 | 10/01/2017 | Aa3/A+*/A+@ | 100,000 | 114,248 | |||||||||||||
KY State Property & Building #93 | 5.300 | 02/01/2018 | Aa3/A+*/A+@ | 510,000 | 586,123 | |||||||||||||
KY State Property & Building #93 | 5.300 | 02/01/2021 | Aa3/AA-*/A+@ | 200,000 | 226,404 | |||||||||||||
KY State Property & Building #85 | 5.000 | 08/01/2016 | Aa3/AA-*/A+@ | 835,000 | 891,847 | |||||||||||||
KY State Property & Building #106 | 5.000 | 10/01/2021 | Aa3/A+*/A+@ | 750,000 | 864,203 | |||||||||||||
KY State Property & Building #99 | 5.000 | 11/01/2021 | Aa3/A+*/A+@ | 1,000,000 | 1,136,590 | |||||||||||||
KY Asset Liability Commission | 5.000 | 05/01/2016 | Aa3/A+*/A+@ | 1,000,000 | 1,058,200 | |||||||||||||
KY Association of Counties | 4.300 | 02/01/2017 | AA-* | 500,000 | 535,955 | |||||||||||||
KY Association of Counties | 4.000 | 02/01/2018 | AA-* | 115,000 | 126,585 | |||||||||||||
KY Association of Counties | 4.300 | 02/01/2019 | AA-* | 255,000 | 282,076 | |||||||||||||
|
| |||||||||||||||||
20,579,967 | ||||||||||||||||||
TURNPIKES/TOLLROAD/HIGHWAY BONDS | ||||||||||||||||||
16.60% of Net Assets | ||||||||||||||||||
KY Asset Liability Project Notes | 5.000 | 09/01/2016 | Aa3/AA*/A+@ | 2,000,000 | 2,102,380 | |||||||||||||
KY Asset Liability Project Notes | 5.000 | 09/01/2015 | Aa3/AA*/A+@ | 275,000 | 295,130 | |||||||||||||
KY Asset Liability Project Notes | 4.500 | 09/01/2016 | Aa3/AA*/A+@ | 175,000 | 193,026 | |||||||||||||
KY Asset Liability Project Notes | 5.000 | 09/01/2017 | Aa3/AA*/A+@ | 1,500,000 | 1,713,720 | |||||||||||||
KY Asset Liability Projects — Federal Highway | 4.200 | 09/01/2018 | Aa3/AA*/A+@ | 1,500,000 | 1,641,134 | |||||||||||||
KY Asset Liability Project Notes | 4.300 | 09/01/2019 | Aa3/AA*/A+@ | 1,400,000 | 1,518,426 | |||||||||||||
KY Turnpike Authority Economic Development | 5.000 | 07/01/2019 | Aa2/AA+*/A+@ | 2,250,000 | 2,394,113 | |||||||||||||
KY Turnpike Authority Economic Development | 5.000 | 07/01/2017 | Aa2/AA+*/A+@ | 2,570,000 | 2,836,638 | |||||||||||||
KY Turnpike Authority Economic Development | 4.100 | 07/01/2019 | Aa2/AA+*/A+@ | 105,000 | 115,699 | |||||||||||||
KY Turnpike Authority Economic Development | 5.000 | 07/01/2016 | Aa2/AA+*/A+@ | 750,000 | 831,173 | |||||||||||||
|
| |||||||||||||||||
13,641,439 | ||||||||||||||||||
SCHOOL IMPROVEMENT BONDS | ||||||||||||||||||
15.48% of Net Assets | ||||||||||||||||||
KY Interlocal School Transportation Assistance Equipment | 3.800 | 03/01/2015 | Aa3 | 770,000 | 770,601 | |||||||||||||
Boone County School District Finance Corporation | 4.000 | 08/01/2018 | Aa3 | 145,000 | 150,742 | |||||||||||||
Breathitt County School District Finance Corporation | 3.900 | 07/01/2017 | Aa3 | 280,000 | 291,102 | |||||||||||||
Bullitt County KY School District Finance Corporation | 4.000 | 10/01/2014 | Aa3 | 150,000 | 154,143 | |||||||||||||
Campbell County School District Finance Corporation | 4.400 | 08/01/2019 | Aa3 | 875,000 | 938,735 | |||||||||||||
Corbin KY Independent School District | 4.000 | 02/01/2018 | Aa3 | 300,000 | 321,387 | |||||||||||||
Daviess County School District Finance Corporation | 4.300 | 08/01/2019 | Aa3 | 100,000 | 107,061 | |||||||||||||
Fayette County School District Finance Corporation | 4.000 | 06/01/2019 | Aa3/AA-* | 140,000 | 146,696 | |||||||||||||
Fayette County School District Finance Corporation | 4.400 | 05/01/2021 | Aa3/AA-* | 200,000 | 213,968 | |||||||||||||
Fayette County School District Finance Corporation | 4.000 | 06/01/2022 | Aa3/AA-* | 1,000,000 | 1,060,570 | |||||||||||||
Gallatin County School District Finance Corporation | 4.000 | 05/01/2016 | Aa3 | 175,000 | 187,919 | |||||||||||||
Grant County School District Finance Corporation | 3.800 | 06/01/2017 | Aa3 | 190,000 | 203,547 |
The accompanying notes are an integral part of the financial statements.
14
Table of Contents
DUPREE MUTUAL FUNDS — KENTUCKY TAX-FREE SHORT-TO-MEDIUM SERIES | UNAUDITED |
SCHEDULE OF PORTFOLIO INVESTMENTS
Kentucky Municipal Bonds — 100% of Net Assets
December 31, 2013
Bond Description | Coupon | Maturity Date | Rating# | Par Value | Fair Value | |||||||||||||
Hardin County School District Finance Corporation | 4.000 | % | 02/01/2019 | Aa3 | $ | 1,475,000 | $ | 1,509,486 | ||||||||||
Hazard KY Independent School District Finance Corporation | 3.900 | 09/01/2017 | Aa3 | 200,000 | 208,480 | |||||||||||||
Jefferson County School District Finance Corporation | 5.300 | 01/01/2017 | Aa2/AA-* | 200,000 | 224,554 | |||||||||||||
Jessamine County KY School District | 4.100 | 01/01/2018 | Aa3 | 100,000 | 102,621 | |||||||||||||
Johnson County School District Finance Corporation | 3.000 | 12/01/2019 | Aa3 | 180,000 | 190,512 | |||||||||||||
Madison County KY School District Finance Corporation | 3.600 | 02/01/2017 | Aa3 | 300,000 | 308,052 | |||||||||||||
Oldham County School Building Corporation | 4.400 | 06/01/2018 | Aa3 | 2,570,000 | 2,802,585 | |||||||||||||
Pendleton County School District Finance Corporation | 4.000 | 02/01/2020 | Aa3 | 450,000 | 471,267 | |||||||||||||
Warren County KY School District Finance Corporation | 4.000 | 02/01/2015 | Aa3 | 785,000 | 811,344 | |||||||||||||
Warren County KY School District Finance Corporation | 4.000 | 02/01/2016 | Aa3 | 1,330,000 | 1,409,786 | |||||||||||||
Warren County KY School District Finance Corporation | 4.000 | 04/01/2018 | Aa3 | 125,000 | 135,400 | |||||||||||||
|
| |||||||||||||||||
12,720,558 | ||||||||||||||||||
REFUNDED BONDS | ||||||||||||||||||
13.15% of Net Assets | ||||||||||||||||||
KY State Property & Building #82 | 5.300 | 10/01/2015 | Aa3/AA-*/A+@ | 2,525,000 | 2,734,145 | |||||||||||||
KY State Property & Building #82 | 5.300 | 10/01/2017 | Aa3/AA-*/A+@ | 1,260,000 | 1,453,070 | |||||||||||||
KY State Property & Building #83 | 5.000 | 10/01/2016 | Aa3/A+*/A+@ | 775,000 | 865,605 | |||||||||||||
KY State Property & Building #83 | 5.000 | 10/01/2019 | Aa3/A+*/A+@ | 1,750,000 | 2,036,878 | |||||||||||||
KY State Property & Building #84 | 5.000 | 08/01/2019 | Aa3/A+*/A+@ | 1,000,000 | 1,159,440 | |||||||||||||
KY State Property & Building #101 | 5.000 | 10/01/2019 | Aa3/A+*/A+@ | 1,050,000 | 1,222,127 | |||||||||||||
KY State Property & Building #104 | 5.000 | 11/01/2021 | A1/A+*/A@ | 1,000,000 | 1,142,410 | |||||||||||||
Lexington-Fayette Urban County Government Public Property | 4.000 | 05/01/2017 | Aa2/AA* | 180,000 | 196,475 | |||||||||||||
|
| |||||||||||||||||
10,810,150 | ||||||||||||||||||
UNIVERSITY CONSOLIDATED EDUCATION AND BUILDING REVENUE BONDS | ||||||||||||||||||
10.00% of Net Assets | ||||||||||||||||||
Boyle County Centre College | 5.000 | 06/01/2018 | A3/AA-* | 200,000 | 222,660 | |||||||||||||
Boyle County Centre College | 5.000 | 06/01/2020 | A3/AA-* | 150,000 | 162,460 | |||||||||||||
KY Asset Liability University of Kentucky Project Notes | 5.000 | 10/01/2016 | Aa2/AA-* | 1,250,000 | 1,348,100 | |||||||||||||
KY Asset Liability Project Notes | 4.400 | 10/01/2019 | Aa2/AA-* | 1,750,000 | 1,837,290 | |||||||||||||
KY Asset Liability University of Kentucky Project Notes | 4.500 | 10/01/2020 | Aa2/AA-* | 500,000 | 523,865 | |||||||||||||
KY Asset Liability University of Kentucky Project Notes | 5.000 | 10/01/2019 | Aa2/AA-* | 320,000 | 360,560 | |||||||||||||
KY Asset Liability — University of Kentucky | 4.000 | 10/01/2019 | Aa2/AA-* | 100,000 | 106,013 | |||||||||||||
Louisville & Jefferson County University of Louisville | 4.000 | 03/01/2020 | Aa2/AA-* | 300,000 | 319,899 | |||||||||||||
Northern KY University General Receipts | 4.000 | 09/01/2018 | Aa3/A+* | 150,000 | 165,839 | |||||||||||||
Western KY University | 4.000 | 09/01/2020 | Aa3/A+* | 290,000 | 304,517 | |||||||||||||
Western KY University | 3.000 | 09/01/2014 | Aa3/AA-* | 500,000 | 508,985 | |||||||||||||
Western KY University | 4.000 | 09/01/2017 | Aa3/AA-* | 2,145,000 | 2,356,540 | |||||||||||||
|
| |||||||||||||||||
8,216,728 | ||||||||||||||||||
MUNICIPAL UTILITY REVENUE BONDS | ||||||||||||||||||
7.95% of Net Assets | ||||||||||||||||||
Bourbon County Public Project | 3.800 | 02/01/2019 | A2 | 260,000 | 272,254 | |||||||||||||
KY State Rural Water Corporation | 3.000 | 02/01/2018 | A+* | 530,000 | 560,936 | |||||||||||||
KY State Rural Water Corporation | 3.000 | 08/01/2019 | A+* | 545,000 | 569,830 | |||||||||||||
KY Rural Water Finance Corporation | 3.000 | 02/01/2018 | A+* | 300,000 | 317,268 | |||||||||||||
KY Rural Water Finance Corporation | 3.000 | 02/01/2019 | A+* | 250,000 | 261,038 | |||||||||||||
KY Rural Water Finance Corporation | 3.600 | 02/01/2016 | Baa1/A+* | 60,000 | 60,664 | |||||||||||||
KY Rural Water Finance Corporation | 4.500 | 08/01/2021 | Baa1/A+* | 100,000 | 106,919 | |||||||||||||
Lawrenceburg Water and Sewer | 3.000 | 10/01/2018 | A1 | 375,000 | 394,166 | |||||||||||||
Louisville & Jefferson County Municipal Sewer | 5.000 | 05/15/2018 | Aa3/AA*/AA-@ | 1,220,000 | 1,340,158 | |||||||||||||
Louisville & Jefferson County Municipal Sewer | 5.000 | 05/15/2016 | Aa3/AA* | 100,000 | 110,273 | |||||||||||||
Louisville & Jefferson County Metropolitan Sewer | 5.000 | 05/15/2015 | Aa3/AA* | 500,000 | 531,655 | |||||||||||||
Louisville & Jefferson County Metropolitan Sewer | 5.000 | 05/15/2015 | Aa3/AA* | 1,000,000 | 1,062,740 | |||||||||||||
Louisville & Jefferson County Metropolitan Sewer | 5.000 | 05/15/2016 | Aa3/AA* | 175,000 | 185,780 | |||||||||||||
Paducah Electric Plant | 3.000 | 10/01/2014 | A3/A-@ | 750,000 | 762,930 | |||||||||||||
|
| |||||||||||||||||
NR | 6,536,611 |
The accompanying notes are an integral part of the financial statements.
15
Table of Contents
DUPREE MUTUAL FUNDS — KENTUCKY TAX-FREE SHORT-TO-MEDIUM SERIES | UNAUDITED |
SCHEDULE OF PORTFOLIO INVESTMENTS
Kentucky Municipal Bonds — 100% of Net Assets
December 31, 2013
Bond Description | Coupon | Maturity Date | Rating# | Par Value | Fair Value | |||||||||||||
PUBLIC FACILITIES REVENUE BONDS | ||||||||||||||||||
3.87% of Net Assets | ||||||||||||||||||
Lexington-Fayette Urban County Government | 5.000 | % | 06/01/2021 | Aa3/A+*/A+@ | $ | 500,000 | $ | 560,740 | ||||||||||
Adair County Public Properties | 4.000 | 12/01/2022 | Aa3 | 170,000 | 175,345 | |||||||||||||
Lexington-Fayette Urban County Government Public Facilities | 4.000 | 10/01/2018 | Aa3 | 1,540,000 | 1,631,322 | |||||||||||||
Pulaski County KY Public Property | 3.800 | 12/01/2014 | Aa3 | 480,000 | 495,149 | |||||||||||||
Todd County Public Properties — Courthouse Facilities | 3.300 | 06/01/2019 | Aa3 | 100,000 | 105,385 | |||||||||||||
Whitley County Public Properties — Justice Center | 3.400 | 09/01/2019 | Aa3 | 200,000 | 212,782 | |||||||||||||
|
| |||||||||||||||||
3,180,723 | ||||||||||||||||||
HOSPITAL AND HEALTHCARE | ||||||||||||||||||
3.20% of Net Assets | ||||||||||||||||||
KY State Asset Liability Commission General Receipts | 4.000 | 10/01/2018 | Aa2/AA-* | 105,000 | 114,938 | |||||||||||||
KY Asset Liability Comission Revenue University of Kentucky | 4.100 | 10/01/2019 | Aa2/AA-* | 150,000 | 162,930 | |||||||||||||
KY Asset Liability Comission Revenue University of Kentucky | 5.000 | 10/01/2020 | Aa2/AA-* | 150,000 | 166,635 | |||||||||||||
KY Development Finance Authority — King’s Daughters | 5.000 | 02/01/2016 | A2/A*/A+@ | 1,000,000 | 1,075,790 | |||||||||||||
KY Economic Development — Baptist Healthcare System | 4.800 | 08/15/2019 | A2/A+@ | 110,000 | 121,091 | |||||||||||||
KY Development Finance Authority — St. Elizabeth | 5.000 | 05/01/2015 | AA*/AA@ | 400,000 | 422,396 | |||||||||||||
KY Economic Development Finance Authority — Catholic Health | 4.000 | 05/01/2015 | A1/A+*/A+@ | 250,000 | 252,978 | |||||||||||||
Warren County Hospital | 4.000 | 04/01/2020 | A* | 300,000 | 314,526 | |||||||||||||
|
| |||||||||||||||||
2,631,284 | ||||||||||||||||||
STATE AND LOCAL MORTGAGE/HOUSING BONDS | ||||||||||||||||||
1.87% of Net Assets | ||||||||||||||||||
KY Housing Corporation | 4.900 | 07/01/2023 | Aaa/AAA* | 1,500,000 | 1,533,600 | |||||||||||||
|
| |||||||||||||||||
PREREFUNDED BONDS | ||||||||||||||||||
.92% of Net Assets | ||||||||||||||||||
Clay County School District Finance Corporation | 3.800 | 06/01/2017 | Aa3 | 210,000 | 219,958 | |||||||||||||
Jefferson County School District School Building Revenue | 4.300 | 07/01/2017 | Aa2/AA-* | 175,000 | 191,238 | |||||||||||||
Louisville & Jefferson County Metropolitan Sanitary Sewer | 5.000 | 05/15/2015 | Aa3/AA-* | 325,000 | 345,947 | |||||||||||||
|
| |||||||||||||||||
757,143 | ||||||||||||||||||
|
| |||||||||||||||||
Total Investments (cost $77,707,632) (See (a) below for further explanation) 98.08% of Net Assets |
| $ | 80,608,203 | |||||||||||||||
|
| |||||||||||||||||
Other assets in excess of liabilities 1.92% | �� | 1,573,545 | ||||||||||||||||
|
| |||||||||||||||||
Net Assets 100% | $ | 82,181,748 | ||||||||||||||||
|
|
* | Standard and Poor’s Corporation |
@ | Fitch’s Investors Service |
(All other ratings by Moody’s Investors Service, Inc.) |
NR | Not Rated |
# | Bond ratings are unaudited and not covered by Report of Independent Registered Public Accounting Firm. |
(a) | Cost for federal income tax purposes is $77,707,632 and net unrealized appreciation of investments is as follows: |
Unrealized appreciation | $ | 3,108,886 | ||||
Unrealized depreciation | (208,315 | ) | ||||
|
| |||||
Net unrealized appreciation | $ | 2,900,571 | ||||
|
|
The accompanying notes are an integral part of the financial statements.
16
Table of Contents
DUPREE MUTUAL FUNDS — KENTUCKY TAX-FREE SHORT-TO-MEDIUM SERIES | UNAUDITED |
SCHEDULE OF PORTFOLIO INVESTMENTS
Kentucky Municipal Bonds — 100% of Net Assets
December 31, 2013
Other Information
The following is a summary of the inputs used, as of December 31, 2013 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.
The Fund held no investments or other financial instruments as of December 31, 2013 whose fair value was determined using Level 3 inputs. There were no transfers in and out of level 1, 2 or 3 during the period ending December 31, 2013.
Valuation Inputs | Municipal Bonds | |||||
Level 1 | Quoted Prices | $ | — | |||
Level 2 | Other Significant Observable Inputs | 80,608,203 | ||||
Level 3 | Significant Unobservable Inputs | — | ||||
|
| |||||
$ | 80,608,203 | |||||
|
|
The accompanying notes are an integral part of the financial statements.
17
Table of Contents
KENTUCKY TAX-FREE SHORT-TO-MEDIUM SERIES
STATEMENT OF ASSETS AND LIABILITIES
December 31, 2013 | UNAUDITED |
ASSETS: | ||||||||
Investments in securities, at fair value (Cost: $77,707,632) | $ | 80,608,203 | ||||||
Cash | 846,345 | |||||||
Receivable for fund shares sold | 292,680 | |||||||
Interest receivable | 1,024,820 | |||||||
|
| |||||||
Total assets | 82,772,048 | |||||||
LIABILITIES: | ||||||||
Payable for: | ||||||||
Distributions to shareholders | 45,708 | |||||||
Fund shares redeemed | 473,125 | |||||||
Investment advisory fee | 26,286 | |||||||
Transfer agent fee | 25,806 | |||||||
Trustees fees | 3,272 | |||||||
Accrued expenses | 16,103 | |||||||
|
| |||||||
Total liabilities | 590,300 | |||||||
|
| |||||||
NET ASSETS: | ||||||||
Capital | 80,046,889 | |||||||
Net accumulated realized loss on investment transactions | (765,712 | ) | ||||||
Net unrealized appreciation in value of investments | 2,900,571 | |||||||
|
| |||||||
Net assets at value | $ | 82,181,748 | ||||||
|
| |||||||
NET ASSET VALUE, offering price and redemption price per share | $ | 5.42 | ||||||
|
|
STATEMENT OF OPERATIONS
For the six months ended December 31, 2013
Net investment income: | ||||
Interest income | $ | 1,240,933 | ||
|
| |||
Expenses: | ||||
Investment advisory fee | 218,688 | |||
Transfer agent fee | 57,414 | |||
Custodian expense | 8,843 | |||
Professional fees | 14,599 | |||
Trustees fees | �� | 5,087 | ||
Other expenses | 16,773 | |||
|
| |||
Total expenses | 321,404 | |||
Custodian expense reduction | (10 | ) | ||
|
| |||
Net expenses | 321,394 | |||
|
| |||
Net investment income | 919,539 | |||
|
| |||
Realized and unrealized gain/(loss) on investments: | ||||
Net realized gain | 31,313 | |||
Net change in unrealized appreciation/depreciation | (156,900 | ) | ||
|
| |||
Net realized and unrealized loss on investments | (125,587 | ) | ||
|
| |||
Net increase in net assets resulting from operations | $ | 793,952 | ||
|
|
The accompanying notes are an integral part of the financial statements.
18
Table of Contents
KENTUCKY TAX-FREE SHORT-TO-MEDIUM SERIES
STATEMENTS OF CHANGES IN NET ASSETS
For the six months ended December 31, 2013 and the year ended June 30, 2013 | UNAUDITED |
Six Months Ended 12/31/2013 | One Year Ended 6/30/2013 | |||||||
Operations: | ||||||||
Net investment income | $ | 919,539 | $ | 1,932,832 | ||||
Net realized gain on investments | 31,313 | 145,079 | ||||||
Net change in unrealized appreciation/depreciation | (156,900 | ) | (1,956,078 | ) | ||||
|
|
|
| |||||
Net increase in net assets resulting from operations | 793,952 | 121,833 | ||||||
Distributions from net investment income | (919,539 | ) | (1,932,832 | ) | ||||
Net fund share transactions (Note 4) | (7,095,170 | ) | 1,685,639 | |||||
|
|
|
| |||||
Total (decrease) | (7,220,757 | ) | (125,360 | ) | ||||
Net assets: | ||||||||
Beginning of period | 89,402,505 | 89,527,865 | ||||||
|
|
|
| |||||
End of period | $ | 82,181,748 | $ | 89,402,505 | ||||
|
|
|
|
FINANCIAL HIGHLIGHTS
Selected data for a share outstanding: | Six Months Ended 12/31/2013 | For the years ended June 30, | ||||||||||||||||||||||
2013 | 2012 | 2011 | 2010 | 2009 | ||||||||||||||||||||
Net asset value, beginning of year | $5.43 | $5.54 | $5.39 | $5.36 | $5.25 | $5.16 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Income from investment operations: | ||||||||||||||||||||||||
Net investment income | 0.06 | 0.12 | 0.12 | 0.13 | 0.15 | 0.17 | ||||||||||||||||||
Net gains/(losses) on securities, both realized and unrealized | (0.01 | ) | (0.11 | ) | 0.15 | 0.03 | 0.11 | 0.09 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total from investment operations | 0.05 | 0.01 | 0.27 | 0.16 | 0.26 | 0.26 | ||||||||||||||||||
Less distributions: | ||||||||||||||||||||||||
Distributions from net investment income | (0.06 | ) | (0.12 | ) | (0.12 | ) | (0.13 | ) | (0.15 | ) | (0.17 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net asset value, end of period | $5.42 | $5.43 | $5.54 | $5.39 | $5.36 | $5.25 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total return | 0.88% | (b) | 0.11% | 5.10% | 3.04% | 4.99% | 5.02% | |||||||||||||||||
Net assets, end of period (in thousands) | $82,182 | $89,403 | $89,528 | $72,405 | $69,166 | $60,570 | ||||||||||||||||||
Ratio of net expenses to average net assets (a) | 0.74% | (c) | 0.72% | 0.73% | 0.72% | 0.72% | 0.72% | |||||||||||||||||
Ratio of net investment income to average net assets | 2.12% | (c) | 2.12% | 2.22% | 2.44% | 2.80% | 3.16% | |||||||||||||||||
Portfolio turnover | 2.60% | (b) | 6.63% | 4.73% | 15.37% | 20.26% | 15.64% |
(a) | Percentages are after custodian reduction for which no recovery will be sought. |
Percentages before custodian reductions were: |
0.74% | (c) | For the six months ended December 31, 2013 | ||||
0.72% | For the year ended June 30, 2013 | |||||
0.73% | For the year ended June 30, 2012 | |||||
0.72% | For the year ended June 30, 2011 | |||||
0.72% | For the year ended June 30, 2010 | |||||
0.72% | For the year ended June 30, 2009 |
(b) | Not annualized |
(c) | Annualized |
The accompanying notes are an integral part of the financial statements.
19
Table of Contents
UNAUDITED |
SCHEDULE OF PORTFOLIO INVESTMENTS
Mississippi Municipal Bonds — 100% of Net Assets
December 31, 2013
Bond Description | Coupon | Maturity Date | Rating# | Par Value | Fair Value | |||||||||||||
UNIVERSITY CONSOLIDATED EDUCATION AND BUILDING REVENUE BONDS | ||||||||||||||||||
31.35% of Net Assets | ||||||||||||||||||
Alcorn State University Education Building MS Revenue | 5.125 | % | 09/01/2034 | Aa2 | $ | 95,000 | $ | 98,319 | ||||||||||
Jackson State University Education Building | 5.000 | 03/01/2034 | Aa2/AA-* | 175,000 | 180,511 | |||||||||||||
MS Development Bank Special Obligation Hinds College | 5.000 | 10/01/2026 | Aa2 | 85,000 | 90,671 | |||||||||||||
MS Development Bank Special Obligation Hinds College | 5.125 | 10/01/2028 | Aa2 | 100,000 | 106,674 | |||||||||||||
MS Development Bank Special Obligation Hinds College | 5.375 | 10/01/2033 | Aa2 | 60,000 | 63,344 | |||||||||||||
MS Development Bank Special Obligation Jones County Junior College | 5.100 | 03/01/2028 | AA-* | 55,000 | 58,775 | |||||||||||||
MS Development Bank Special Obligation Jones County Junior College | 5.000 | 03/01/2033 | AA-* | 150,000 | 157,574 | |||||||||||||
MS Development Bank Special Obligation Jones County Junior College | 5.125 | 03/01/2039 | AA-* | 45,000 | 46,616 | |||||||||||||
MS Development Bank Special Obligation Hinds Community | 5.000 | 04/01/2036 | A2/AA-* | 250,000 | 260,628 | |||||||||||||
MS State University Education Building Corporation Revenue | 5.000 | 08/01/2024 | Aa2/A*/AA@ | 225,000 | 234,747 | |||||||||||||
MS State University Education Building Corporation Revenue | 5.000 | 08/01/2028 | Aa2/A*/AA@ | 30,000 | 31,176 | |||||||||||||
MS State University Education Building Corporation Revenue | 5.250 | 08/01/2033 | Aa2/AA@ | 50,000 | 52,460 | |||||||||||||
MS State University Education Building Corporation Revenue | 5.000 | 08/01/2036 | Aa2/AA@ | 175,000 | 180,450 | |||||||||||||
MS State University Education Building Corporation Revenue | 5.250 | 08/01/2038 | Aa2/AA@ | 100,000 | 106,102 | |||||||||||||
Southern Mississippi Education Building Corporation | 5.000 | 03/01/2038 | Aa2/AA@ | 500,000 | 514,035 | |||||||||||||
University of Mississippi Education Building Corporation | 5.000 | 10/01/2028 | Aa2/AA@ | 200,000 | 216,528 | |||||||||||||
University Southern MS Education Building | 5.000 | 03/01/2022 | Aa2 | 100,000 | 106,745 | |||||||||||||
University Southern MS Education Building Corporation | 5.000 | 03/01/2032 | Aa2 | 50,000 | 51,740 | |||||||||||||
University Southern MS Education Building Athletics | 5.000 | 03/01/2034 | Aa2 | 105,000 | 107,460 | |||||||||||||
University Southern MS Education Building Corporation | 5.125 | 09/01/2029 | Aa2/A+* | 100,000 | 105,596 | |||||||||||||
|
| |||||||||||||||||
2,770,151 | ||||||||||||||||||
PUBLIC FACILITIES REVENUE BONDS | ||||||||||||||||||
16.34% of Net Assets | ||||||||||||||||||
MS Development Bank Special Obligation Department of Corrections | 5.250 | 08/01/2027 | AA-*/AA@ | 50,000 | 53,914 | |||||||||||||
MS Development Bank Special Obligation Department of Corrections | 5.250 | 08/01/2027 | AA-*/AA@ | 305,000 | 329,982 | |||||||||||||
MS State Capital Improvement Projects | 5.000 | 10/01/2029 | Aa2/AA*/AA+@ | 145,000 | 157,695 | |||||||||||||
MS State Capital Improvement Projects | 5.000 | 10/01/2036 | Aa2/AA*/AA+@ | 480,000 | 505,795 | |||||||||||||
MS State Development Bank Special Obligation City of Jackson Convention Center | 5.000 | 03/01/2027 | Aa2/AA-* | 125,000 | 137,154 | |||||||||||||
MS State Development Bank Special Obligation Refunding — City of Jackson | 5.000 | 03/01/2036 | Aa2/AA-* | 150,000 | 155,612 | |||||||||||||
MS State Development Bank Special Obligation Alcorn County | 4.750 | 07/01/2031 | AA-* | 100,000 | 103,271 | |||||||||||||
|
| |||||||||||||||||
1,443,423 | ||||||||||||||||||
TURNPIKES/TOLLROAD/HIGHWAY BONDS | ||||||||||||||||||
13.40% of Net Assets | ||||||||||||||||||
MS Development Bank Special Obligation Highway Construction | 5.000 | 01/01/2027 | Aa3/AA-* | 125,000 | 133,676 | |||||||||||||
MS Development Bank Special Obligation Highway — Desoto | 4.750 | 01/01/2035 | Aa3/AA-* | 225,000 | 225,650 | |||||||||||||
MS Development Bank Special Obligation Highway Construction | 5.000 | 01/01/2027 | Aa3/AA-* | 245,000 | 261,910 | |||||||||||||
MS Development Bank Special Obligation Highway Construction | 4.750 | 01/01/2031 | Aa3/AA-* | 125,000 | 127,369 | |||||||||||||
MS State Development Bank Special Obligation Highway | 5.000 | 01/01/2025 | Aa3/AA-* | 200,000 | 224,862 | |||||||||||||
MS Development Bank Special Obligation Marshall County | 5.000 | 01/01/2028 | Aa3/AA-* | 200,000 | 210,498 | |||||||||||||
|
| |||||||||||||||||
1,183,965 | ||||||||||||||||||
MUNICIPAL UTILITY REVENUE BONDS | ||||||||||||||||||
9.21% of Net Assets | ||||||||||||||||||
MS Development Bank Special Obligation Rankin Utilities | 5.000 | 01/01/2028 | A2/AA-* | 55,000 | 56,892 | |||||||||||||
MS Development Bank Special Obligation Desoto County | 5.000 | 07/01/2032 | A* | 45,000 | 45,896 | |||||||||||||
MS Development Bank Special Obligation Southaven Water | 5.000 | 03/01/2025 | A+* | 325,000 | 343,476 | |||||||||||||
MS Development Bank Special Obligation Desoto County | 5.250 | 07/01/2031 | A* | 225,000 | 237,551 | |||||||||||||
MS State Development Bank Special Obligation Jackson Water | 5.000 | 09/01/2030 | A1/AA-* | 125,000 | 129,710 | |||||||||||||
|
| |||||||||||||||||
813,525 | ||||||||||||||||||
MISCELLANEOUS PUBLIC IMPROVEMENT BONDS | ||||||||||||||||||
7.48% of Net Assets | ||||||||||||||||||
MS Development Bank Special Obligation Lowndes County | 5.000 | 07/01/2022 | A2/AA-* | 80,000 | 87,139 | |||||||||||||
MS Development Bank Special Obligation Lowndes County | 5.000 | 07/01/2027 | A2/AA-* | 150,000 | 158,924 | |||||||||||||
MS Development Bank Special Obligation Canton | 5.750 | 10/01/2031 | A2 | 370,000 | 399,448 |
The accompanying notes are an integral part of the financial statements.
20
Table of Contents
DUPREE MUTUAL FUNDS — MISSISSIPPI TAX-FREE INCOME SERIES | UNAUDITED |
SCHEDULE OF PORTFOLIO INVESTMENTS
Mississippi Municipal Bonds — 100% of Net Assets
December 31, 2013
Bond Description | Coupon | Maturity Date | Rating# | Par Value | Fair Value | |||||||||||||
MS Development Bank Special Obligation Capital Projects | 5.000 | % | 07/01/2031 | NR | $ | 5,000 | $ | 5,150 | ||||||||||
MS Development Bank Special Obligation Capital Projects | 5.875 | 07/01/2024 | NR | 5,000 | 5,250 | |||||||||||||
MS Development Bank Special Obligation Capital Projects | 5.000 | 07/01/2024 | NR | 5,000 | 5,150 | |||||||||||||
|
| |||||||||||||||||
661,061 | ||||||||||||||||||
SCHOOL IMPROVEMENT BONDS | ||||||||||||||||||
6.38% of Net Assets | ||||||||||||||||||
MD Development Bank Special Obligation Jackson Public | 5.375 | 04/01/2028 | A2 | 70,000 | 75,568 | |||||||||||||
MS State Development Bank Special Obligation — Jackson Schools | 5.000 | 04/01/2028 | A+* | 475,000 | 487,711 | |||||||||||||
|
| |||||||||||||||||
563,279 | ||||||||||||||||||
HOSPITAL AND HEALTHCARE REVENUE BONDS | ||||||||||||||||||
4.12% of Net Assets | ||||||||||||||||||
Medical Center Education Building Corporation MS Revenue | 5.500 | 12/01/2023 | Aa2 | 120,000 | 135,418 | |||||||||||||
Medical Center Education Building Corporation — University of Mississippi | 5.000 | 06/01/2034 | Aa2/AA-* | 100,000 | 102,039 | |||||||||||||
MS Development Bank Special Obligation Jones County Rest Home | 5.250 | 04/01/2028 | A2/AA-* | 120,000 | 126,568 | |||||||||||||
|
| |||||||||||||||||
364,025 | ||||||||||||||||||
REFUNDED BONDS | ||||||||||||||||||
3.81% of Net Assets | ||||||||||||||||||
MS State Refunding | 5.250 | % | 11/01/2019 | Aa2/AA*/AA+@ | $ | 50,000 | $ | 59,419 | ||||||||||
MS State Development Bank Special Obligation Lowndes County | 5.125 | 12/01/2027 | AA-* | 135,000 | 143,841 | |||||||||||||
MS Development Bank Special Obligation Capital Improvement | 5.250 | 07/01/2026 | A2/AA-* | 125,000 | 133,764 | |||||||||||||
|
| |||||||||||||||||
337,024 | ||||||||||||||||||
PREREFUNDED BONDS | ||||||||||||||||||
3.71% of Net Assets | ||||||||||||||||||
MS Development Special Obligation Madison County Highway | 5.000 | 01/01/2027 | Aa3/AA-* | 295,000 | 327,471 | |||||||||||||
|
| |||||||||||||||||
AIRPORT BONDS | ||||||||||||||||||
1.97% of Net Assets | ||||||||||||||||||
Jackson MS Municipal Airport Authority | 5.000 | 10/01/2031 | A3/A-@ | 170,000 | 174,253 | |||||||||||||
|
| |||||||||||||||||
STATE AND LOCAL MORTGAGE/HOUSING BONDS | ||||||||||||||||||
.35% of Net Assets | ||||||||||||||||||
MS Home Corporation Single Family Mortgage — Series E-1 | 5.050 | 12/01/2028 | Aaa | 30,000 | 30,526 | |||||||||||||
|
| |||||||||||||||||
ESCROWED TO MATURITY BONDS | ||||||||||||||||||
.29% of Net Assets | ||||||||||||||||||
Harrison County MS Wastewater Management District | 5.000 | 02/01/2015 | AA+* | 25,000 | 25,701 | |||||||||||||
|
| |||||||||||||||||
Total Investments (cost $8,698,070) (See (a) below for further explanation) 98.41% of Net Assets |
| $ | 8,694,404 | |||||||||||||||
|
| |||||||||||||||||
Other assets in excess of liabilities 1.59% |
| 140,593 | ||||||||||||||||
|
| |||||||||||||||||
Net Assets 100% |
| $ | 8,834,997 | |||||||||||||||
|
|
* | Standard and Poor’s Corporation |
@ | Fitch’s Investors Service |
(All other ratings by Moody’s Investors Service, Inc.) |
NR | Not Rated |
# | Bond ratings are unaudited and not covered by Report of Independent Registered Public Accounting Firm. |
(a) | Cost for federal income tax purposes is $8,697,864 and net unrealized depreciation of investments is as follows: |
Unrealized appreciation | $ | 177,496 | ||||
Unrealized depreciation | (180,956 | ) | ||||
|
| |||||
Net unrealized depreciation | $ | (3,460 | ) | |||
|
|
The accompanying notes are an integral part of the financial statements.
21
Table of Contents
DUPREE MUTUAL FUNDS — MISSISSIPPI TAX-FREE INCOME SERIES | UNAUDITED |
SCHEDULE OF PORTFOLIO INVESTMENTS
Mississippi Municipal Bonds — 100% of Net Assets
December 31, 2013
Other Information
The following is a summary of the inputs used, as of December 31, 2013 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.
The Fund held no investments or other financial instruments as of December 31, 2013 whose fair value was determined using Level 3 inputs.
There were no transfers in and out of level 1, 2 or 3 during the period ending December 31, 2013.
Valuation Inputs | Municipal Bonds | |||||
Level 1 | Quoted Prices | $ | — | |||
Level 2 | Other Significant Observable Inputs | 8,694,404 | ||||
Level 3 | Significant Unobservable Inputs | — | ||||
|
| |||||
$ | 8,694,404 | |||||
|
|
The accompanying notes are an integral part of the financial statements.
22
Table of Contents
MISSISSIPPI TAX-FREE INCOME SERIES
STATEMENT OF ASSETS AND LIABILITIES
December 31, 2013 | UNAUDITED |
ASSETS: | ||||||||
Investments in securities, at fair value (Cost: $8,698,070) | $ | 8,694,404 | ||||||
Cash | 154,258 | |||||||
Interest receivable | 144,366 | |||||||
|
| |||||||
Total assets | 8,993,028 | |||||||
LIABILITIES: | ||||||||
Payable for: | ||||||||
Distributions to shareholders | 52,983 | |||||||
Fund shares redeemed | 95,012 | |||||||
Investment advisory fee | 2,110 | |||||||
Transfer agent fee | 2,827 | |||||||
Trustees fees | 337 | |||||||
Accrued expenses | 4,762 | |||||||
|
| |||||||
Total liabilities | 158,031 | |||||||
|
| |||||||
NET ASSETS: | ||||||||
Capital | 8,845,724 | |||||||
Accumulated net investment income | 206 | |||||||
Net accumulated realized loss on investment transactions |
| (7,267 | ) | |||||
Net unrealized depreciation in value of investments | (3,666 | ) | ||||||
|
| |||||||
Net assets at value | $ | 8,834,997 | ||||||
|
| |||||||
NET ASSET VALUE, offering price and redemption price per share | $ | 11.43 | ||||||
|
|
STATEMENT OF OPERATIONS
For the six months ended December 31, 2013
Net investment income: | ||||
Interest income | $ | 171,054 | ||
|
| |||
Expenses: | ||||
Investment advisory fee | 21,431 | |||
Transfer agent fee | 6,658 | |||
Custodian expense | 4,062 | |||
Professional fees | 910 | |||
Trustee fees | 482 | |||
Registration fees | 2,221 | |||
Other expenses | 3,557 | |||
|
| |||
Total expenses | 39,321 | |||
Fees waived by Adviser | (9,773 | ) | ||
Custodian expense reduction | (1 | ) | ||
|
| |||
Net expenses | 29,547 | |||
|
| |||
Net investment income | 141,507 | |||
|
| |||
Realized and unrealized loss on investments: | ||||
Net realized loss | (7,267 | ) | ||
Net change in unrealized appreciation/depreciation | (134,938 | ) | ||
|
| |||
Net realized and unrealized loss on investments | (142,205 | ) | ||
|
| |||
Net decrease in net assets resulting from operations | $ | (698 | ) | |
|
|
The accompanying notes are an integral part of the financial statements.
23
Table of Contents
MISSISSIPPI TAX-FREE INCOME SERIES
STATEMENTS OF CHANGES IN NET ASSETS
For the six months ended December 31, 2013 and the year ended June 30, 2013 | UNAUDITED |
Six Months Ended 12/31/2013 | One Year Ended 6/30/2013 | |||||||
Operations: | ||||||||
Net investment income | $ | 141,507 | $ | 271,005 | ||||
Net realized gain/(loss) on investments | (7,267 | ) | 32,190 | |||||
Net change in unrealized appreciation/depreciation | (134,938 | ) | (303,574 | ) | ||||
|
|
|
| |||||
Net decrease in net assets resulting from operations | (698 | ) | (379 | ) | ||||
Distributions from net investment income | (141,475 | ) | (287,105 | ) | ||||
Distributions from capital gains | (9,925 | ) | — | |||||
Net fund share transactions (Note 4) | 678,567 | 884,037 | ||||||
|
|
|
| |||||
Total increase | 526,469 | 596,553 | ||||||
Net assets: | ||||||||
Beginning of period | 8,308,528 | 7,711,975 | ||||||
|
|
|
| |||||
End of period | $ | 8,834,997 | $ | 8,308,528 | ||||
|
|
|
| |||||
Accumulated net investment income | $ | 206 | $ | 174 | ||||
|
|
|
|
FINANCIAL HIGHLIGHTS
Selected data for a share outstanding: | Six Months Ended 12/31/2013 | For the years ended June 30, | ||||||||||||||||||||||
2013 | 2012 | 2011 | 2010 | 2009 | ||||||||||||||||||||
Net asset value, beginning of year | $11.65 | $12.01 | $11.33 | $11.41 | $11.03 | $11.08 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Income from investment operations: | ||||||||||||||||||||||||
Net investment income | 0.19 | 0.39 | 0.42 | 0.44 | 0.45 | 0.45 | ||||||||||||||||||
Net gains/(losses) on securities, both realized and unrealized | (0.21 | ) | (0.33 | ) | 0.68 | (0.08 | ) | 0.38 | (0.05 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total from investment operations | (0.02 | ) | 0.06 | 1.10 | 0.36 | 0.83 | 0.40 | |||||||||||||||||
Less distributions: | ||||||||||||||||||||||||
Distributions from net investment income | (0.19 | ) | (0.42 | ) | (0.42 | ) | (0.44 | ) | (0.45 | ) | (0.45 | ) | ||||||||||||
Distributions from capital gains | (0.01 | ) | — | — | — | — | (b) | — | (b) | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total distributions | (0.20 | ) | (0.42 | ) | (0.42 | ) | (0.44 | ) | (0.45 | ) | (0.45 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net asset value, end of period | $11.43 | $11.65 | $12.01 | $11.33 | $11.41 | $11.03 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total return | (0.25 | )%(c) | 0.38% | 9.87% | 3.19% | 7.65% | 3.72% | |||||||||||||||||
Net assets, end of period (in thousands) | $8,835 | $8,309 | $7,712 | $6,376 | $6,321 | $5,001 | ||||||||||||||||||
Ratio of net expenses to average net assets (a) | 0.69% | (d) | 0.66% | 0.65% | 0.58% | 0.45% | 0.44% | |||||||||||||||||
Ratio of net investment income to average net assets | 3.32% | (d) | 3.22% | 3.59% | 3.86% | 3.99% | 4.11% | |||||||||||||||||
Portfolio turnover | 1.85% | (c) | 13.81% | 9.99% | 20.53% | 10.04% | 9.30% |
(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 | |||||||
.23%(d) | 0% | (d) | For the six months ended December 31, 2013 | |||||
.23% | 0% | For the year ended June 30, 2013 | ||||||
.27% | 0% | For the year ended June 30, 2012 | ||||||
.26% | 0% | For the year ended June 30, 2011 | ||||||
.46% | 0% | For the year ended June 30, 2010 | ||||||
.53% | .08% | For the year ended June 30, 2009 |
(b) | Rounds to less than $0.01. |
(c) | Not annualized |
(d) | Annualized |
The accompanying notes are an integral part of the financial statements.
24
Table of Contents
UNAUDITED |
SCHEDULE OF PORTFOLIO INVESTMENTS
North Carolina Municipal Bonds — 100% of Net Assets
December 31, 2013
Bond Description | Coupon | Maturity Date | Rating# | Par Value | Fair Value | |||||||||||||
MUNICIPAL UTILITY REVENUE BONDS | ||||||||||||||||||
21.52% of Net Assets | ||||||||||||||||||
Mooresville NC Certificates of Participation | 5.000 | % | 09/01/2032 | AA-* | $ | 1,890,000 | $ | 1,938,838 | ||||||||||
Wilson NC Certificates of Participation Public Facilities | 5.000 | 05/01/2021 | A1/AA-* | 780,000 | 830,380 | |||||||||||||
Wilson NC Certificates of Participation Public Facilities | 5.000 | 05/01/2025 | A1/AA-* | 750,000 | 783,390 | |||||||||||||
Wilson County Certificates of Participation Public Facilities | 5.000 | 05/01/2029 | A1/AA-* | 1,355,000 | 1,398,523 | |||||||||||||
Asheville NC Water System Revenue | 4.800 | 08/01/2027 | Aa2/AA* | 1,000,000 | 1,036,270 | |||||||||||||
Beaufort NC Limited Obligation | 5.000 | 06/01/2025 | A1 | 500,000 | 546,250 | |||||||||||||
Charlotte NC Water and Sewer Systems Revenue | 4.500 | 07/01/2028 | Aaa/AAA*/AAA@ | 750,000 | 774,345 | |||||||||||||
Moore County NC | 5.000 | 06/01/2031 | Aa3/AA-* | 2,750,000 | 2,897,813 | |||||||||||||
NC Municipal Power Agency Number 1 Catawba Electric Revenue | 5.000 | 01/01/2031 | A2/A*/A@ | 500,000 | 516,640 | |||||||||||||
NC Eastern Municipal Power Agency Power System Revenue | 5.000 | 01/01/2021 | /A-*A-@ | 1,000,000 | 1,067,270 | |||||||||||||
NC Eastern Municipal Power Agency Power System Revenue | 6.000 | 01/01/2025 | Baa1/A*/A-@ | 1,000,000 | 1,198,290 | |||||||||||||
NC Eastern Municipal Power Agency Power System Revenue | 6.000 | 01/01/2018 | Baa1 | 1,000,000 | 1,176,630 | |||||||||||||
NC Eastern Municipal Power Agency | 6.000 | 01/01/2022 | A3/AA-* | 915,000 | 1,093,141 | |||||||||||||
NC Municipal Power Agency Number 1 Catawba Electric Revenue | 4.800 | 01/01/2030 | A2/A*/A@ | 290,000 | 297,917 | |||||||||||||
NC Municipal Power Agency Number 1 Catawba Electric Revenue | 5.000 | 01/01/2030 | A2/A*/A@ | 2,545,000 | 2,661,662 | |||||||||||||
Wilmington NC Store Water Revenue | 5.000 | 06/01/2028 | Aa2/AA* | 500,000 | 535,255 | |||||||||||||
|
| |||||||||||||||||
18,752,614 | ||||||||||||||||||
SCHOOL IMPROVEMENT BONDS | ||||||||||||||||||
16.97% of Net Assets | ||||||||||||||||||
Nash County NC Limited Obligation | 5.000 | 10/01/2030 | Aa3/AA-* | 2,045,000 | 2,182,260 | |||||||||||||
Cabarrus County NC Certificates of Participation Installment | 5.000 | 06/01/2025 | Aa2/AA*/AA@ | 1,000,000 | 1,087,740 | |||||||||||||
Cabarrus County NC Certificates of Participation | 5.000 | 01/01/2029 | Aa2/AA*/AA@ | 750,000 | 800,130 | |||||||||||||
Davie County NC Public School and Community College Facility | 5.000 | 06/01/2023 | Aa3/A+* | 1,000,000 | 1,058,980 | |||||||||||||
Davie County NC Public School and Community College Facility | 5.000 | 06/01/2025 | Aa3/A+* | 1,690,000 | 1,771,001 | |||||||||||||
Forsyth County NC Certificates of Participation | 5.000 | 02/01/2026 | Aa1/AA+*/AA+@ | 550,000 | 568,370 | |||||||||||||
Franklin County NC Certificates of Participation | 5.000 | 09/01/2027 | Aa3/A+* | 750,000 | 792,600 | |||||||||||||
Harnett County NC Certificates of Participation | 5.000 | 06/01/2027 | A1/AA-* | 300,000 | 317,013 | |||||||||||||
Iredell County NC Certificates of Participation School Project | 5.000 | 06/01/2024 | Aa3/AA-* | 1,000,000 | 1,074,840 | |||||||||||||
Lee County NC Certificates of Participation | 5.000 | 04/01/2025 | Aa3/AA-* | 550,000 | 583,974 | |||||||||||||
Mecklenburg County NC Certificates of Participation | 5.000 | 02/01/2028 | Aa1/AA+*/AA+@ | 415,000 | 440,174 | |||||||||||||
Montgomery County NC Certificates of Participation | 5.000 | 02/01/2030 | A-* | 1,680,000 | 1,715,986 | |||||||||||||
Sampson County NC Certificates of Participation | 5.000 | 06/01/2022 | A2/AA-* | 1,250,000 | 1,346,600 | |||||||||||||
Sampson County NC Certificates of Participation | 5.000 | 06/01/2026 | A2/AA-* | 1,000,000 | 1,045,910 | |||||||||||||
|
| |||||||||||||||||
14,785,578 | ||||||||||||||||||
UNIVERSITY CONSOLIDATED EDUCATION AND BUILDING REVENUE BONDS | ||||||||||||||||||
16.18% of Net Assets | ||||||||||||||||||
Pitt County NC Limited Obligation | 5.000 | 04/01/2035 | Aa3/AA-*/AA@ | 105,000 | 107,251 | |||||||||||||
Iredell County NC Community College | 5.000 | 04/01/2026 | Aa2/AA*/AA+@ | 225,000 | 246,017 | |||||||||||||
Iredell County NC Community College | 5.000 | 04/01/2027 | Aa2/AA*/AA+@ | 325,000 | 355,358 | |||||||||||||
NC State University at Raleigh | 5.000 | 10/01/2042 | Aa1/AA* | 750,000 | 788,963 | |||||||||||||
NC Capital Facilites Financial Agency Education Wake Forest | 5.000 | 01/01/2031 | Aa3/AA* | 500,000 | 536,265 | |||||||||||||
NC Capital Facilites Financial Agency Education Wake Forest | 5.000 | 01/01/2038 | Aa3/AA* | 1,250,000 | 1,302,113 | |||||||||||||
NC Capital Facilities Financial Agency Revenue Duke University | 5.000 | 10/01/2038 | Aa1/AA+* | 500,000 | 521,750 | |||||||||||||
NC State Capital Facilities Davidson College | 5.000 | 03/01/2032 | AA+* | 310,000 | 326,758 | |||||||||||||
University NC Chapel Hill Revenue General Refunding | 5.000 | 12/01/2034 | Aaa/AAA*/AAA@ | 1,000,000 | 1,047,630 | |||||||||||||
University NC University Revenues UNC Chapel Hill | 5.000 | 12/01/2031 | Aaa/AAA*/AAA@ | 1,215,000 | 1,315,820 | |||||||||||||
University of NC at Charlotte | 5.000 | 04/01/2031 | Aa3/AA-* | 750,000 | 795,720 | |||||||||||||
University of NC Greensboro | 5.000 | 04/01/2031 | Aa3/A+* | 500,000 | 531,200 | |||||||||||||
University of NC System Pool Revenue | 5.000 | 10/01/2033 | Aa3/A+* | 430,000 | 439,267 | |||||||||||||
University of NC System Pool Revenue | 5.000 | 10/01/2026 | A1 | 1,000,000 | 1,061,470 | |||||||||||||
University of NC System Pool Revenue | 5.000 | 10/01/2033 | A1 | 1,000,000 | 1,039,740 | |||||||||||||
University of NC System Pool Revenue General Trust Indenture | 5.000 | 10/01/2034 | Aa2 | 1,950,000 | 2,058,401 | |||||||||||||
University of NC Wilmington Certificates of Participation | 5.300 | 06/01/2025 | Baa1/A* | 1,000,000 | 1,031,380 | |||||||||||||
University of NC Wilmington Student Housing Project | 5.000 | 06/01/2025 | Baa1/A* | 580,000 | 599,842 | |||||||||||||
|
| |||||||||||||||||
14,104,945 |
The accompanying notes are an integral part of the financial statements.
25
Table of Contents
DUPREE MUTUAL FUNDS — NORTH CAROLINA TAX-FREE INCOME SERIES | UNAUDITED |
SCHEDULE OF PORTFOLIO INVESTMENTS
North Carolina Municipal Bonds — 100% of Net Assets
December 31, 2013
Bond Description | Coupon | Maturity Date | Rating# | Par Value | Fair Value | |||||||||||||
PUBLIC FACILITIES REVENUE BONDS | ||||||||||||||||||
10.78% of Net Assets | ||||||||||||||||||
Chatham County NC Limited Obligation | 4.500 | % | 06/01/2033 | Aa3/AA* | $ | 815,000 | $ | 826,940 | ||||||||||
Raleigh NC Limited Obligation | 5.000 | 10/01/2038 | Aa1/AA+*/AA+@ | 500,000 | 525,975 | |||||||||||||
Wake County NC Limited Obligation Series 209 | 5.000 | 06/01/2032 | Aa1/AA+*/AA+@ | 1,500,000 | 1,587,330 | |||||||||||||
Charlotte NC Certificiates of Participation Transit Project | 5.000 | 06/01/2035 | Aa2/AA+*/AA+@ | 500,000 | 502,830 | |||||||||||||
Charlotte NC Certificates of Participation Convention Facilities | 5.000 | 06/01/2034 | Aa2/AA+*/AA@ | 900,000 | 922,689 | |||||||||||||
Mecklenburg County NC Certificates of Participation | 5.000 | 02/01/2026 | Aa1/AA+*/AA+@ | 1,000,000 | 1,088,740 | |||||||||||||
NC Infrastructure Finance Corporation Certificates of Participation | 5.000 | 02/01/2025 | Aa1/AA+*/AA+@ | 200,000 | 208,686 | |||||||||||||
Rockingham County NC Certificates of Participation | 5.000 | 04/01/2032 | Aa3/AA-* | 1,325,000 | 1,348,227 | |||||||||||||
Winston Salem NC Limited Obligation | 5.000 | 06/01/2031 | Aa2/AA+*/AA+@ | 800,000 | 841,696 | |||||||||||||
Forsyth County Limited Tax | 5.000 | 04/01/2031 | Aa1/AA+*/AA+@ | 335,000 | 354,701 | |||||||||||||
Jacksonville Public Facilities Corporation Limited Obligation | 5.000 | 04/01/2031 | A1/A+@ | 265,000 | 277,940 | |||||||||||||
Jacksonville Public Facilities Corporation Limited Obligation | 5.000 | 04/01/2032 | A1/A+@ | 100,000 | 104,107 | |||||||||||||
Watauga NC Public Facilities Corporation Limited Obligation | 5.000 | 06/01/2027 | Aa3/AA-* | 750,000 | 805,898 | |||||||||||||
|
| |||||||||||||||||
9,395,759 | ||||||||||||||||||
HOSPITAL AND HEALTHCARE | ||||||||||||||||||
10.17% of Net Assets | ||||||||||||||||||
Charlotte Mecklenburg NC Hospital Authority Health Care | 5.000 | 01/15/2031 | Aa3/AA-* | 450,000 | 455,171 | |||||||||||||
Charlotte Mecklenburg NC Hospital Authority Health Care | 5.000 | 01/15/2027 | Aa3/AA-* | 1,090,000 | 1,138,112 | |||||||||||||
Charlotte-Mecklenburg Hospital | 5.300 | 01/15/2039 | Aa3/AA-* | 750,000 | 773,385 | |||||||||||||
Johnston NC Memorial Hospital Authority | 5.300 | 10/01/2028 | A2/AA-* | 490,000 | 512,133 | |||||||||||||
NC Medical Care Community Hospital Revenue-Stanly Hospital | 5.400 | 10/01/2014 | BBB+@ | 5,000 | 5,008 | |||||||||||||
NC Medical Care Community Hospital Revenue NC Baptist Hospital | 5.000 | 06/01/2034 | A1/A+* | 1,100,000 | 1,110,769 | |||||||||||||
NC Medical Care Community Hospital Revenue NC Baptist Hospital | 5.300 | 06/01/2029 | A1/A+* | 645,000 | 686,828 | |||||||||||||
NC Medical Care Community Hospital Revenue Baptist Hospital | 4.800 | 06/01/2030 | A1/A+* | 405,000 | 411,703 | |||||||||||||
NC Medical Care Community Health Care Facilities Revenue | 5.000 | 06/01/2034 | Aa2/AA*/AA@ | 1,670,000 | 1,723,457 | |||||||||||||
NC State Medical Care Commission Health Care Facilities | 5.000 | 07/01/2030 | A1/A+*/A+@ | 500,000 | 519,950 | |||||||||||||
NC State Medical Care Commission Duke University Health | 5.000 | 06/01/2035 | Aa2/AA*/AA@ | 500,000 | 513,810 | |||||||||||||
NC State Medical Care Commission Wake Forest Baptist Hospital | 5.000 | 12/01/2033 | A1/A+* | 1,000,000 | 1,015,050 | |||||||||||||
|
| |||||||||||||||||
8,865,376 | ||||||||||||||||||
REFUNDING BONDS | ||||||||||||||||||
7.17% of Net Assets | ||||||||||||||||||
Charolotte NC Certificates of Participation | 5.000 | 06/01/2033 | Aa2/AA+*/AA+@ | 340,000 | 352,128 | |||||||||||||
Dare County NC Limited Obligation Refunding | 5.000 | 06/01/2029 | Aa3/AA-*/AA-@ | 100,000 | 107,083 | |||||||||||||
New Hanover County NC Limited Obligation | 5.000 | 12/01/2027 | Aa1/AA+* | 505,000 | 558,908 | |||||||||||||
Union County NC Limited Obligation Refunding | 5.000 | 12/01/2024 | Aa2/AA-*/AA@ | 125,000 | 144,716 | |||||||||||||
Charlotte NC Certificates of Participation Convention Facilities | 5.000 | 12/01/2024 | Aa2/AA+*/AA@ | 1,000,000 | 1,061,180 | |||||||||||||
Charlotte NC Certificates of Participation | 5.000 | 06/01/2026 | Aa2/AA+*/AA+@ | 1,455,000 | 1,577,642 | |||||||||||||
Charlotte NC Certificates of Participation | 5.000 | 06/01/2027 | Aa2/AA+*/AA+@ | 775,000 | 832,676 | |||||||||||||
Pitt County NC Certificates of Participation | 5.000 | 04/01/2027 | Aa3/AA-*/AA@ | 500,000 | 541,385 | |||||||||||||
Johnston County NC Installment Financing Contract | 5.000 | 10/15/2027 | Aa3/AA* | 570,000 | 614,448 | |||||||||||||
Thomasville NC Combined Enterprise System Revenue | 4.800 | 05/01/2028 | A1/AA-* | 435,000 | 457,590 | |||||||||||||
|
| |||||||||||||||||
6,247,756 | ||||||||||||||||||
MISCELLANEOUS PUBLIC IMPROVEMENT BONDS | ||||||||||||||||||
6.55% of Net Assets | ||||||||||||||||||
Buncombe County Limited Obligation | 5.000 | 06/01/2030 | Aa2/AA+* | 250,000 | 267,155 | |||||||||||||
Buncombe County NC Limited Obligation | 5.000 | 06/01/2032 | Aa2/AA+* | 250,000 | 264,593 | |||||||||||||
Johnston County TN Limited Obligation | 4.800 | 06/01/2033 | Aa3/AA* | 500,000 | 505,280 | |||||||||||||
Orange County NC Public Facilities Company Limited Obligation | 4.800 | 10/01/2032 | Aa2/AA+*/AA+@ | 750,000 | 777,120 | |||||||||||||
Charlotte NC Certificates of Participation | 5.000 | 12/01/2029 | Aa1/AA+* | 340,000 | 364,533 | |||||||||||||
NC Infrastructure Finance Corporation Certificates of Participation | 5.000 | 02/01/2024 | Aa1/AA+*/AA+@ | 1,000,000 | 1,084,880 | |||||||||||||
Wilmington NC Certificates of Participation | 5.000 | 06/01/2032 | Aa2/AA*/AA@ | 1,500,000 | 1,549,080 | |||||||||||||
Wilmington NC Certificates of Participation | 5.000 | 06/01/2038 | Aa2/AA*/AA@ | 250,000 | 251,168 | |||||||||||||
Winston Salem NC Certificates of Participation | 4.800 | 06/01/2031 | AA+*/AA+@ | 620,000 | 644,360 | |||||||||||||
|
| |||||||||||||||||
5,708,169 |
The accompanying notes are an integral part of the financial statements.
26
Table of Contents
DUPREE MUTUAL FUNDS — NORTH CAROLINA TAX-FREE INCOME SERIES | UNAUDITED |
SCHEDULE OF PORTFOLIO INVESTMENTS
North Carolina Municipal Bonds — 100% of Net Assets
December 31, 2013
Bond Description | Coupon | Maturity Date | Rating# | Par Value | Fair Value | |||||||||||||
AIRPORT BONDS | ||||||||||||||||||
4.98% of Net Assets | ||||||||||||||||||
Charlotte NC Airport Revenue | 5.300 | % | 07/01/2023 | Aa3/A+*/A+@ | $ | 1,000,000 | $ | 1,022,670 | ||||||||||
Charlotte NC Airport Revenue Refunding Charlotte Douglas International | 5.000 | 07/01/2025 | Aa3/A+*/A+@ | 1,000,000 | 1,072,170 | |||||||||||||
Raleigh Durham NC Airport | 5.000 | 05/01/2029 | Aa3/AA-@ | 235,000 | 249,507 | |||||||||||||
Raleigh Durham NC Airport | 5.000 | 05/01/2036 | Aa3/AA-@ | 1,480,000 | 1,531,844 | |||||||||||||
Raleigh Durham NC Airport | 5.000 | 05/01/2032 | Aa3/AA-@ | 440,000 | 461,868 | |||||||||||||
|
| |||||||||||||||||
4,338,059 | ||||||||||||||||||
PREREFUNDED BONDS | ||||||||||||||||||
3.01% of Net Assets | ||||||||||||||||||
Burke County NC Certificates of Participation | 5.000 | 04/01/2023 | A1/A* | 250,000 | 275,910 | |||||||||||||
Henderson County NC Certificates of Participation | 5.000 | 05/01/2025 | Aa3/AA*/AA-@ | 250,000 | 265,693 | |||||||||||||
NC Eastern Municipal Power Agency Power System | 6.000 | 01/01/2026 | A-* | 275,000 | 344,850 | |||||||||||||
Raleigh NC Combined Enterprise System | 5.000 | 03/01/2031 | Aa1/AAA*/AAA@ | 500,000 | 549,910 | |||||||||||||
Randolph County NC Certificates of Participation | 5.000 | 02/01/2027 | Aa3 | 1,000,000 | 1,131,260 | |||||||||||||
Winston Salem NC Certificates of Participation | 4.800 | 06/01/2031 | NR | 50,000 | 55,136 | |||||||||||||
|
| |||||||||||||||||
2,622,759 | ||||||||||||||||||
TURNPIKES/TOLLROAD/HIGHWAY BONDS | ||||||||||||||||||
2.32% of Net Assets | ||||||||||||||||||
NC State Turnpike Monroe Connector System | 5.000 | 07/01/2029 | Aa2/AA* | 500,000 | 539,515 | |||||||||||||
NC State Turnpike Authority Monroe Connector System | 5.000 | 07/01/2031 | Aa2/AA* | 1,385,000 | 1,478,598 | |||||||||||||
|
| |||||||||||||||||
2,018,113 | ||||||||||||||||||
|
| |||||||||||||||||
Total Investments (cost $85,705,576) (See (a) below for further explanation) 99.65% of Net Assets |
| $ | 86,839,128 | |||||||||||||||
|
| |||||||||||||||||
Other assets in excess of liabilities .35% |
| 308,926 | ||||||||||||||||
|
| |||||||||||||||||
Net Assets 100% | $ | 87,148,054 | ||||||||||||||||
|
|
* | Standard and Poor’s Corporation |
@ | Fitch’s Investors Service |
(All other ratings by Moody’s Investors Service, Inc.) |
NR | Not Rated |
# | Bond ratings are unaudited and not covered by Report of Independent Registered Public Accounting Firm. |
(a) | Cost for federal income tax purposes is $85,702,792 and net unrealized appreciation of investments is as follows: |
Unrealized appreciation | $ | 2,292,212 | ||||
Unrealized depreciation | (1,155,876 | ) | ||||
|
| |||||
Net unrealized appreciation | $ | 1,136,336 | ||||
|
|
Other Information
The following is a summary of the inputs used, as of December 31, 2013 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.
The Fund held no investments or other financial instruments as of December 31, 2013 whose fair value was determined using Level 3 inputs. There were no transfers in and out of level 1, 2 or 3 during the period ending December 31, 2013.
Valuation Inputs | Municipal Bonds | |||||
Level 1 | Quoted Prices | $ | — | |||
Level 2 | Other Significant Observable Inputs | 86,839,128 | ||||
Level 3 | Significant Unobservable Inputs | — | ||||
|
| |||||
$ | 86,839,128 | |||||
|
|
The accompanying notes are an integral part of the financial statements.
27
Table of Contents
NORTH CAROLINA TAX-FREE INCOME SERIES
STATEMENT OF ASSETS AND LIABILITIES
December 31, 2013 | UNAUDITED |
ASSETS: | ||||||||
Investments in securities, at fair value (Cost: $85,705,576) | $ | 86,839,128 | ||||||
Cash | 296,130 | |||||||
Interest receivable | 1,021,966 | |||||||
|
| |||||||
Total assets | 88,157,224 | |||||||
LIABILITIES: | ||||||||
Payable for: | ||||||||
Distributions to shareholders | 292,044 | |||||||
Fund shares redeemed | 656,726 | |||||||
Investment advisory fee | 39,082 | |||||||
Transfer agent fee | 20,544 | |||||||
Accrued expenses | 774 | |||||||
|
| |||||||
Total liabilities | 1,009,170 | |||||||
|
| |||||||
NET ASSETS: | ||||||||
Capital | 86,443,119 | |||||||
Accumulated net investment income | 2,784 | |||||||
Net accumulated realized loss on investment transactions | (431,401 | ) | ||||||
Net unrealized appreciation in value of investments | 1,133,552 | |||||||
|
| |||||||
Net assets at value | $ | 87,148,054 | ||||||
|
| |||||||
NET ASSET VALUE, offering price and redemption price per share | $ | 11.11 | ||||||
|
|
STATEMENT OF OPERATIONS
For the six months ended December 31, 2013
Net investment income: | ||||
Interest income | $ | 1,824,461 | ||
|
| |||
Expenses: | ||||
Investment advisory fee | 226,135 | |||
Transfer agent fee | 59,499 | |||
Custodian expense | 9,404 | |||
Professional fees | 10,118 | |||
Other expenses | 22,833 | |||
|
| |||
Total expenses | 327,989 | |||
Custodian expense reduction | (10 | ) | ||
|
| |||
Net expenses | 327,979 | |||
|
| |||
Net investment income | 1,496,482 | |||
|
| |||
Realized and unrealized loss on investments: | ||||
Net realized loss | (431,401 | ) | ||
Net change in unrealized appreciation/depreciation | (1,141,818 | ) | ||
|
| |||
Net realized and unrealized loss on investments | (1,573,219 | ) | ||
|
| |||
Net decrease in net assets resulting from operations | $ | (76,737 | ) | |
|
|
The accompanying notes are an integral part of the financial statements.
28
Table of Contents
NORTH CAROLINA TAX-FREE INCOME SERIES
STATEMENTS OF CHANGES IN NET ASSETS
For the six months ended December 31, 2013 and the year ended June 30, 2013 | UNAUDITED |
Six Months Ended 12/31/2013 | One Year Ended 6/30/2013 | |||||||
Operations: | ||||||||
Net investment income | $ | 1,496,482 | $ | 3,025,345 | ||||
Net realized gain/(loss) on investments | (431,401 | ) | 112,821 | |||||
Net change in unrealized appreciation/depreciation | (1,141,818 | ) | (2,631,334 | ) | ||||
|
|
|
| |||||
Net increase/(decrease) in net assets resulting from operations | (76,737 | ) | 506,832 | |||||
Distributions from net investment income | (1,496,031 | ) | (3,026,417 | ) | ||||
Capital gains distributed to shareholders | (112,821 | ) | (131,685 | ) | ||||
Net fund share transactions (Note 4) | (6,293,059 | ) | 9,474,078 | |||||
|
|
|
| |||||
Total increase/(decrease) | (7,978,648 | ) | 6,822,808 | |||||
Net assets: | ||||||||
Beginning of period | 95,126,702 | 88,303,894 | ||||||
|
|
|
| |||||
End of period | $ | 87,148,054 | $ | 95,126,702 | ||||
|
|
|
| |||||
Accumulated net investment income | $ | 2,784 | $ | 2,333 | ||||
|
|
|
|
FINANCIAL HIGHLIGHTS
Selected data for a share outstanding: | Six Months Ended 12/31/2013 | For the years ended June 30, | ||||||||||||||||||||||
2013 | 2012 | 2011 | 2010 | 2009 | ||||||||||||||||||||
Net asset value, beginning of year | $ | 11.31 | $ | 11.59 | $ | 10.92 | $ | 11.01 | $ | 10.71 | $ | 10.62 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Income from investment operations: | ||||||||||||||||||||||||
Net investment income | 0.19 | 0.36 | 0.39 | 0.40 | 0.40 | 0.41 | ||||||||||||||||||
Net gains/(losses) on securities, both realized and unrealized | (0.19 | ) | (0.26 | ) | 0.67 | (0.09 | ) | 0.30 | 0.09 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total from investment operations | 0.00 | 0.10 | 1.06 | 0.31 | 0.70 | 0.50 | ||||||||||||||||||
Less distributions: | ||||||||||||||||||||||||
Distributions from net investment income | (0.19 | ) | (0.36 | ) | (0.39 | ) | (0.40 | ) | (0.40 | ) | (0.41 | ) | ||||||||||||
Distributions from capital gains | (0.01 | ) | (0.02 | ) | — | — | — | — | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total distributions: | (0.20 | ) | (0.38 | ) | (0.39 | ) | (0.40 | ) | (0.40 | ) | (0.41 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net asset value, end of period | $ | 11.11 | $ | 11.31 | $ | 11.59 | $ | 10.92 | $ | 11.01 | $ | 10.71 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total return | 0.01% | (b) | 0.76% | 9.87% | 2.90% | 6.62% | 4.83% | |||||||||||||||||
Net assets, end of period (in thousands) | $ | 87,148 | $ | 95,127 | $ | 88,304 | $ | 75,312 | $ | 77,116 | $ | 66,891 | ||||||||||||
Ratio of net expenses to average net assets (a) | 0.73% | (c) | 0.71% | 0.71% | 0.70% | 0.72% | 0.72% | |||||||||||||||||
Ratio of net investment income to average net assets | 3.34% | (c) | 3.07% | 3.46% | 3.69% | 3.66% | 3.89% | |||||||||||||||||
Portfolio turnover | 2.09% | (c) | 3.59% | 5.94% | 14.16% | 5.92% | 7.82% |
(a) | Percentages are after Custodian reduction for which no recovery will be sought. |
Percentages | before custodian reductions were: |
0.73%(c) | For the six months ended December 31, 2013 | |||
0.71% | For the year ended June 30, 2013 | |||
0.71% | For the year ended June 30, 2012 | |||
0.70% | For the year ended June 30, 2011 | |||
0.72% | For the year ended June 30, 2010 | |||
0.72% | For the year ended June 30, 2009 |
(b) | Not annualized |
(c) | Annualized |
The accompanying notes are an integral part of the financial statements.
29
Table of Contents
DUPREE MUTUAL FUNDS — NORTH CAROLINA TAX-FREE SHORT-TO-MEDIUM SERIES | UNAUDITED |
SCHEDULE OF PORTFOLIO INVESTMENTS
North Carolina Municipal Bonds — 100% of Net Assets
December 31, 2013
Bond Description | Coupon | Maturity Date | Rating# | Par Value | Fair Value | |||||||||||||
MUNICIPAL UTILITY REVENUE BONDS | ||||||||||||||||||
20.82% of Net Assets | ||||||||||||||||||
Monroe NC Certificates of Participation | 4.000 | % | 03/01/2019 | Aa3/AA* | $ | 100,000 | $ | 109,717 | ||||||||||
Mooreville NC Certificates of Participation | 4.125 | 09/01/2018 | AA-* | 250,000 | 269,790 | |||||||||||||
Wilson NC Certificates of Participation | 5.000 | 05/01/2016 | A1/AA-* | 200,000 | 219,133 | |||||||||||||
Wilson NC Certificates of Participation | 5.000 | 05/01/2018 | A1/AA-* | 160,000 | 177,531 | |||||||||||||
Wilson NC Certificates of Participation | 5.000 | 05/01/2022 | A1/AA-* | 350,000 | 371,234 | |||||||||||||
Asheville NC Water System Revenue Refunding | 5.000 | 08/01/2017 | Aa2/AA* | 140,000 | 149,646 | |||||||||||||
Lincolnton NC Enterprise System Revenue | 5.000 | 05/01/2016 | NR | 385,000 | 398,560 | |||||||||||||
Moore County NC | 5.000 | 06/01/2017 | Aa3/AA-* | 685,000 | 776,063 | |||||||||||||
Moore County NC | 5.000 | 06/01/2021 | Aa3/AA-* | 200,000 | 228,576 | |||||||||||||
NC State Eastern Municipal Power Agency | 5.000 | 01/01/2021 | Baa1/A-*/A-@ | 125,000 | 142,031 | |||||||||||||
NC Eastern Municipal Power Agency | 4.000 | 01/01/2016 | Baa1/A-*/A-@ | 95,000 | 101,471 | |||||||||||||
NC Eastern Municipal Power Agency | 5.000 | 01/01/2016 | A-*A-@ | 50,000 | 54,315 | |||||||||||||
NC Eastern Municipal Power Agency | 5.000 | 01/01/2020 | A-*A-@ | 250,000 | 269,183 | |||||||||||||
NC Eastern Municipal Power Agency | 5.250 | 01/01/2019 | A3/AA-*/A-@ | 550,000 | 624,740 | |||||||||||||
NC Eastern Municipal Power Agency | 6.500 | 01/01/2018 | A3/AA-* | 100,000 | 119,686 | |||||||||||||
NC Eastern Municipal Power Agency | 3.250 | 01/01/2015 | Baa1/A-*/A-@ | 250,000 | 257,155 | |||||||||||||
NC Municipal Power Agency Number 1 Catawba Electric | 5.250 | 01/01/2017 | A2/A*/A@ | 200,000 | 225,630 | |||||||||||||
NC Municipal Power Agency Number 1 Catawba Electric | 5.250 | 01/01/2018 | A2/A*/A@ | 125,000 | 143,868 | |||||||||||||
NC Municipal Power Agency Number 1 Catawba Electric | 4.000 | 01/01/2016 | A2/A*/A@ | 100,000 | 106,749 | |||||||||||||
NC Municipal Power Agency Number 1 Catawba Electric | 5.000 | 01/01/2021 | A2/A*/A@ | 250,000 | 277,468 | |||||||||||||
NC Municipal Power Agency Number 1 Catawba Electric | 5.000 | 01/01/2016 | A2/A*/A@ | 125,000 | 135,970 | |||||||||||||
Onslow NC Water & Sewer | 4.250 | 06/01/2022 | Baa1/A+* | 150,000 | 157,446 | |||||||||||||
Union County NC Enterprise System Revenue | 4.000 | 12/01/2022 | Aa2/AA-*/AA@ | 100,000 | 108,097 | |||||||||||||
|
| |||||||||||||||||
5,424,059 | ||||||||||||||||||
SCHOOL IMPROVEMENT BONDS | ||||||||||||||||||
17.38% of Net Assets | ||||||||||||||||||
Nash County NC Limited Obligation | 3.000 | 10/01/2015 | Aa3/AA-* | 400,000 | 417,044 | |||||||||||||
Nash County NC Limited Obligation | 5.000 | 10/01/2018 | Aa3/AA-* | 150,000 | 174,504 | |||||||||||||
Buncombe County NC Certificates of Participation | 4.000 | 04/01/2016 | Aa2/AA+* | 125,000 | 133,843 | |||||||||||||
Burke County NC Certificates of Participation | 4.250 | 04/01/2016 | A1/A* | 50,000 | 53,745 | |||||||||||||
Cabarrus County NC Certificates of Participation | 4.250 | 06/01/2017 | Aa2/AA*/AA@ | 175,000 | 193,123 | |||||||||||||
Cabarrus County NC Certificates of Participation | 4.000 | 01/01/2015 | Aa2/AA*/AA@ | 225,000 | 232,479 | |||||||||||||
Cabarrus County NC Certificates of Participation | 5.000 | 01/01/2017 | Aa2/AA*/AA@ | 150,000 | 166,982 | |||||||||||||
Cabarrus County NC Certificates of Participation | 5.000 | 01/01/2019 | Aa2/AA*/AA@ | 100,000 | 114,566 | |||||||||||||
Cabarrus County NC Certificates of Participation | 5.000 | 01/01/2021 | Aa2/AA*/AA@ | 200,000 | 224,062 | |||||||||||||
Catawba County NC Certificates of Participation | 5.250 | 06/01/2019 | Aa2/A* | 200,000 | 210,762 | |||||||||||||
Harnett County NC Certificates of Participation | 5.000 | 12/01/2015 | A1/AA-* | 125,000 | 135,340 | |||||||||||||
Harnett County NC Certificates of Participation | 5.000 | 12/01/2021 | A1/AA-* | 200,000 | 220,902 | |||||||||||||
Harnett County NC Certificates of Participation | 3.500 | 06/01/2016 | A1/AA-* | 250,000 | 265,192 | |||||||||||||
Henderson County NC Certificates of Participation | 5.000 | 06/01/2014 | Aa3/AA*/AA-@ | 50,000 | 50,925 | |||||||||||||
Iredell County NC Certificates of Participation School Project | 5.000 | 06/01/2018 | Aa3/AA-* | 425,000 | 464,201 | |||||||||||||
Lincoln County NC Certificates of Participation | 5.000 | 06/01/2016 | A1/AA-*/AA-@ | 200,000 | 220,572 | |||||||||||||
Montgomery County NC Certificates of Participation | 5.000 | 02/01/2017 | A-* | 125,000 | 138,092 | |||||||||||||
Onslow County NC Certificates of Participation | 5.000 | 06/01/2018 | Aa3/A+* | 140,000 | 151,550 | |||||||||||||
Pitt County NC Certificates of Participation School Facility | 4.000 | 04/01/2015 | Aa3/AA-*/AA@ | 100,000 | 104,098 | |||||||||||||
Rutherford County NC Certificates of Participation | 5.000 | 12/01/2017 | A1/AA-* | 105,000 | 120,004 | |||||||||||||
Sampson County NC Certificates of Participation | 5.000 | 06/01/2014 | A2/AA-* | 50,000 | 50,931 | |||||||||||||
Sampson County NC Certificates of Participation | 5.000 | 06/01/2020 | A2/AA-* | 400,000 | 440,828 | |||||||||||||
Edgecombe County NC Schools | 4.000 | 02/01/2015 | A1/A+* | 235,000 | 243,484 | |||||||||||||
|
| |||||||||||||||||
4,527,229 | ||||||||||||||||||
PREREFUNDED BONDS | ||||||||||||||||||
14.44% of Net Assets | ||||||||||||||||||
Appalachian State University NC Revenue Refunding | 5.000 | 07/15/2018 | Aa3 | 35,000 | 37,501 | |||||||||||||
Brunswick County NC CommunityCollege | 4.250 | 05/01/2022 | Aa2/AA*/AA@ | 125,000 | 139,638 | |||||||||||||
Burke County NC Certificates of Participation | 5.000 | 04/01/2020 | A1/A* | 180,000 | 197,971 | |||||||||||||
Cabarrus County NC Public Improvement | 5.000 | 03/01/2018 | Aa1/AA+*/AA+@ | 100,000 | 109,867 |
The accompanying notes are an integral part of the financial statements.
30
Table of Contents
DUPREE MUTUAL FUNDS — NORTH CAROLINA TAX-FREE SHORT-TO-MEDIUM SERIES | UNAUDITED |
SCHEDULE OF PORTFOLIO INVESTMENTS
North Carolina Municipal Bonds — 100% of Net Assets
December 31, 2013
Bond Description | Coupon | Maturity Date | Rating# | Par Value | Fair Value | |||||||||||||
Catawba County NC Certificates of Participation Public Schools | 5.250 | % | 06/01/2016 | Aa2 | $ | 125,000 | $ | 127,574 | ||||||||||
Catawba County NC Certificates of Participation Public Schools | 5.250 | 06/01/2018 | Aa2 | 125,000 | 127,573 | |||||||||||||
Chapel Hill NC Certificates of Participation Operations Center | 5.250 | 06/01/2019 | Aa1/AA+* | 260,000 | 278,065 | |||||||||||||
Henderson County NC Certificates of Participation | 5.250 | 05/01/2020 | Aa3/AA*/AA-@ | 300,000 | 319,827 | |||||||||||||
NC Medical Care Community Hospital Rowan Medical | 5.250 | 09/01/2016 | A2/AA-* | 1,100,000 | 1,135,860 | |||||||||||||
NC Medical Care Community Healthcare Facilities | 4.000 | 10/01/2018 | A1/AA-*/AA-@ | 50,000 | 51,400 | |||||||||||||
NC Medical Care Duke University Health Systems | 3.000 | 06/01/2019 | Aa2/AA*/AA@ | 150,000 | 156,485 | |||||||||||||
Randolph County NC Certificates of Participation | 5.000 | 02/01/2018 | Aa3 | 200,000 | 226,318 | |||||||||||||
Rutherford County NC Certificates of Participation | 5.000 | 12/01/2018 | A1/AA-* | 205,000 | 237,187 | |||||||||||||
Rutherford NC Certificates of Participation | 4.000 | 12/01/2019 | A1/AA-* | 200,000 | 223,806 | |||||||||||||
Rutherford County NC Certificates of Participation | 5.000 | 12/01/2020 | A1/AA-* | 100,000 | 115,701 | |||||||||||||
Union County NC Certificates of Participation | 5.000 | 06/01/2020 | Aa2/AA-* | 250,000 | 276,925 | |||||||||||||
|
| |||||||||||||||||
3,761,698 | ||||||||||||||||||
PUBLIC FACILITIES REVENUE BONDS | ||||||||||||||||||
12.73% of Net Assets | ||||||||||||||||||
Cabarrus County NC Certificates of Participation | 5.625 | 02/01/2016 | Aa2/AA*/AA@ | 125,000 | 137,327 | |||||||||||||
Cabarrus County NC Certificates of Participation | 5.000 | 06/01/2019 | Aa2/AA*/AA@ | 420,000 | 476,620 | |||||||||||||
Charlotte NC Certificates of Participation Refunding | 5.000 | 12/01/2021 | Aa2/AA+*/AA@ | 270,000 | 286,940 | |||||||||||||
Charlotte NC Certificates of Participation Transit Projects | 4.000 | 06/01/2016 | Aa2/AA+*/AA+@ | 100,000 | 104,687 | |||||||||||||
Charlotte NC Certificates of Participation | 4.000 | 12/01/2022 | Aa1/AA+* | 170,000 | 181,280 | |||||||||||||
Craven County NC Certificates of Participation | 4.375 | 06/01/2016 | Aa3/AA-* | 115,000 | 124,531 | |||||||||||||
Durham County NC Certificates of Participation | 5.000 | 06/01/2020 | Aa1/AA+* | 435,000 | 495,674 | |||||||||||||
Durham County NC Certificates of Participation | 5.000 | 06/01/2021 | Aa1/AA+* | 240,000 | 269,954 | |||||||||||||
Forsyth County NC Certificates of Participation | 5.000 | 10/01/2019 | Aa1/AA+*/AA+@ | 600,000 | 654,090 | |||||||||||||
Lee County NC Certificates of Participation | 5.000 | 04/01/2018 | Aa3/AA-* | 225,000 | 250,643 | |||||||||||||
Mecklenburg County NC Certificates of Participation | 5.000 | 02/01/2017 | Aa1/AA+*/AA+@ | 105,000 | 117,482 | |||||||||||||
Rockingham County NC Certificates of Participation | 4.000 | 04/01/2019 | Aa3/AA-* | 100,000 | 108,235 | |||||||||||||
Wilmington NC Certificates of Participation | 4.200 | 06/01/2019 | Aa2/AA*/AA@ | 100,000 | 109,343 | |||||||||||||
|
| |||||||||||||||||
3,316,806 | ||||||||||||||||||
REFUNDING BONDS | ||||||||||||||||||
7.83% of Net Assets | ||||||||||||||||||
Bertie County Limited Obligation | 4.000 | 06/01/2022 | A1/A* | 200,000 | 209,162 | |||||||||||||
Dare County NC Limited Obligation | 4.000 | 06/01/2019 | Aa3/AA-*/AA-@ | 100,000 | 110,272 | |||||||||||||
Pender County NC Limited Obligation | 3.000 | 06/01/2019 | Aa3 | 220,000 | 229,739 | |||||||||||||
Richmond County NC Limited Obligation Refunding | 4.000 | 04/01/2019 | A1/A* | 225,000 | 245,322 | |||||||||||||
Cabarrus County NC Certificates of Participation | 5.000 | 04/01/2021 | AA* | 150,000 | 170,730 | |||||||||||||
Charlotte NC Certificates of Participation | 4.000 | 06/01/2022 | Aa2/AA+*/AA+@ | 125,000 | 134,716 | |||||||||||||
Cumberland County NC Certificates of Participation | 5.000 | 12/01/2015 | Aa2/AA* | 75,000 | 81,294 | |||||||||||||
Cumberland County NC Certificates of Participation | 5.000 | 12/01/2017 | Aa2/AA* | 350,000 | 400,012 | |||||||||||||
Cumberland County NC Certificates of Participation Refunding | 3.500 | 12/01/2020 | Aa2/AA* | 185,000 | 194,696 | |||||||||||||
Sampson Area Development Corporation NC Refunding | 4.000 | 06/01/2015 | AA-* | 150,000 | 157,184 | |||||||||||||
Union County NC Limited Obligation | 3.000 | 12/01/2018 | Aa2/AA-*/AA@ | 100,000 | 106,642 | |||||||||||||
|
| |||||||||||||||||
2,039,769 | ||||||||||||||||||
MISCELLANEOUS PUBLIC IMPROVEMENT BONDS | ||||||||||||||||||
7.33% of Net Assets | ||||||||||||||||||
Johnston County NC Limited Obligation | 4.000 | 06/01/2019 | Aa3/AA* | 150,000 | 163,554 | |||||||||||||
NC State Capital Improvement Obligation | 5.000 | 05/01/2021 | Aa1/AA+*/AA+@ | 350,000 | 400,504 | |||||||||||||
NC State Capital Improvement Obligation | 4.000 | 05/01/2020 | Aa1/AA+*/AA+@ | 120,000 | 129,239 | |||||||||||||
NC State Capital Improvement Obligation | 5.000 | 05/01/2022 | Aa1/AA+*/AA+@ | 100,000 | 111,905 | |||||||||||||
NC Infrastructure Certificates of Participation | 5.000 | 06/01/2018 | Aa1/AA+*/AA+@ | 100,000 | 109,300 | |||||||||||||
NC Infrastructure Finance Certificates of Participation | 5.000 | 02/01/2017 | Aa1/AA+*/AA+@ | 150,000 | 168,708 | |||||||||||||
NC Infrastructure Finance Corporation Certificates of Participation | 5.000 | 02/01/2020 | Aa1/AA+*/AA+@ | 425,000 | 468,975 | |||||||||||||
Salisbury NC Certificates of Participation | 5.000 | 03/01/2019 | A1/AA-* | 145,000 | 165,789 | |||||||||||||
NC State Public Improvement | 5.000 | 03/01/2019 | Aaa/AAA* | 15,000 | 15,691 | |||||||||||||
NC State Capital Improvement Obligation Annual Appropriation | 5.000 | 05/01/2022 | Aa1/AA+*/AA+@ | 155,000 | 175,388 | |||||||||||||
|
| |||||||||||||||||
1,909,053 |
The accompanying notes are an integral part of the financial statements.
31
Table of Contents
DUPREE MUTUAL FUNDS — NORTH CAROLINA TAX-FREE SHORT-TO-MEDIUM SERIES | UNAUDITED |
SCHEDULE OF PORTFOLIO INVESTMENTS
North Carolina Municipal Bonds — 100% of Net Assets
December 31, 2013
Bond Description | Coupon | Maturity Date | Rating# | Par Value | Fair Value | |||||||||||||
UNIVERSITY CONSOLIDATED EDUCATION AND BUILDING REVENUE BONDS | ||||||||||||||||||
6.68% of Net Assets | ||||||||||||||||||
University NC Wilmington Certificates of Participation | 5.250 | % | 06/01/2021 | Baa1/A* | $ | 100,000 | $ | 104,587 | ||||||||||
University NC Wilmington Certificates of Participation | 5.000 | 06/01/2014 | Baa1/A* | 40,000 | 40,716 | |||||||||||||
University NC Wilmington Certificates of Participation | 4.250 | 06/01/2017 | Baa1/A* | 300,000 | 318,549 | |||||||||||||
University NC Wilmington Certificates of Participation | 4.375 | 06/01/2019 | Baa1/A* | 100,000 | 104,633 | |||||||||||||
University NC Wilmington Certificates of Participation | 4.000 | 06/01/2017 | A2/AA-* | 100,000 | 108,854 | |||||||||||||
Appalachian State University NC Revenue Refunding | 5.000 | 07/15/2018 | Aa3 | 40,000 | 42,342 | |||||||||||||
University of NC | 4.250 | 10/01/2021 | A1 | 100,000 | 105,764 | |||||||||||||
University NC System Pool Revenue | 5.000 | 10/01/2016 | Aa2 | 250,000 | 279,445 | |||||||||||||
University NC System Pool Revenue | 5.000 | 10/01/2015 | Aa3 | 350,000 | 377,597 | |||||||||||||
University NC System Pool Revenue Asheville Wilmington | 5.000 | 10/01/2016 | A1/AA-* | 230,000 | 257,223 | |||||||||||||
|
| |||||||||||||||||
1,739,710 | ||||||||||||||||||
HOSPITAL AND HEALTHCARE REVENUE BONDS | ||||||||||||||||||
5.34% of Net Assets | ||||||||||||||||||
Charlotte-Mecklenburg NC Hospital Authority Healthcare | 5.000 | 01/15/2018 | Aa3/AA-* | 200,000 | 221,472 | |||||||||||||
Charlotte-Mecklenburg Hospital | 5.000 | 01/15/2019 | Aa3/AA-* | 200,000 | 219,840 | |||||||||||||
Charlotte-Mecklenburg Hospital | 4.375 | 01/15/2019 | Aa3/AA-* | 150,000 | 164,123 | |||||||||||||
Johnston NC Memorial Hospital Authority | 4.000 | 04/01/2015 | A2/AA-* | 95,000 | 98,482 | |||||||||||||
Johnston NC Memorial Hospital Authority Mortgage Revenue | 5.000 | 10/01/2018 | A2/AA-* | 175,000 | 195,753 | |||||||||||||
NC Medical Care - Caromont Health | 3.250 | 02/15/2018 | A1/AA-* | 370,000 | 388,959 | |||||||||||||
NC Medical Care Mission Health Combined Group | 4.000 | 10/01/2014 | Aa3/AA-*/AA-@ | 100,000 | 102,501 | |||||||||||||
|
| |||||||||||||||||
1,391,130 | ||||||||||||||||||
AIRPORT BONDS | ||||||||||||||||||
2.31% of Net Assets | ||||||||||||||||||
Charlotte NC Airport - Charlotte Douglas International | 4.125 | 07/01/2016 | Aa3/A+*/A+@ | 100,000 | 108,317 | |||||||||||||
Charlotte NC Airport Revenue Refunding | 5.000 | 07/01/2015 | Aa3/A+*/A+@ | 350,000 | 373,835 | |||||||||||||
Raleigh Durham NC Airport Authority | 5.000 | 11/01/2017 | Aa3/AA-@ | 105,000 | 120,158 | |||||||||||||
|
| |||||||||||||||||
602,310 | ||||||||||||||||||
TURNPIKES/TOLLROAD/HIGHWAY BONDS | ||||||||||||||||||
1.33% of Net Assets | ||||||||||||||||||
NC State Grant Anticipation Revenue Vehicle | 5.000 | 03/01/2021 | Aa3/AA*/A+@ | 310,000 | 348,294 | |||||||||||||
|
| |||||||||||||||||
LEASE REVENUE BONDS | ||||||||||||||||||
1.00% of Net Assets | ||||||||||||||||||
Edgecombe County NC Limited Obligation | 4.000 | 06/01/2022 | A2 | 250,000 | 261,828 | |||||||||||||
|
| |||||||||||||||||
STATE AND LOCAL MORTGAGE/HOUSING BONDS | ||||||||||||||||||
.53% of Net Assets | ||||||||||||||||||
NC Housing Finance Agency Series 31-B | 3.850 | % | 01/01/2017 | Aa2/AA* | 130,000 | 136,891 | ||||||||||||
|
| |||||||||||||||||
Total Investments (cost $24,884,449) (See (a) below for further explanation) 97.72% of Net Assets |
| $ | 25,458,777 | |||||||||||||||
|
| |||||||||||||||||
Other assets in excess of liabilities 2.28% | 593,112 | |||||||||||||||||
|
| |||||||||||||||||
Net Assets 100% |
| $ | 26,051,889 | |||||||||||||||
|
|
* | Standard and Poor’s Corporation |
@ | Fitch’s Investors Service |
(All other ratings by Moody’s Investors Service, Inc.) |
NR | Not Rated |
# | Bond ratings are unaudited and not covered by Report of Independent Registered Public Accounting Firm. |
(a) | Cost for federal income tax purposes is $24,884,449 and net unrealized appreciation of investments is as follows: |
Unrealized appreciation | $ | 737,667 | ||||
Unrealized depreciation | (163,339 | ) | ||||
|
| |||||
Net unrealized appreciation | $ | 574,328 | ||||
|
|
The accompanying notes are an integral part of the financial statements.
32
Table of Contents
DUPREE MUTUAL FUNDS — NORTH CAROLINA TAX-FREE SHORT-TO-MEDIUM SERIES | UNAUDITED |
SCHEDULE OF PORTFOLIO INVESTMENTS
North Carolina Municipal Bonds — 100% of Net Assets
December 31, 2013
Other Information
The following is a summary of the inputs used, as of December 31, 2013 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.
The Fund held no investments or other financial instruments as of December 31, 2013 whose fair value was determined using Level 3 inputs. There were no transfers in and out of level 1, 2 or 3 during the period ending December 31, 2013.
Valuation Inputs | Municipal Bonds | |||||
Level 1 | Quoted Prices | $ | — | |||
Level 2 | Other Significant Observable Inputs | 25,458,777 | ||||
Level 3 | Significant Unobservable Inputs | — | ||||
|
| |||||
$ | 25,458,777 | |||||
|
|
The accompanying notes are an integral part of the financial statements.
33
Table of Contents
NORTH CAROLINA TAX-FREE SHORT-TO-MEDIUM SERIES
STATEMENT OF ASSETS AND LIABILITIES
December 31, 2013 | UNAUDITED |
ASSETS: | ||||||||
Investments in securities, at fair value (Cost: $24,884,449) | $ | 25,458,777 | ||||||
Cash | 373,092 | |||||||
Interest receivable | 262,665 | |||||||
|
| |||||||
Total assets | 26,094,534 | |||||||
LIABILITIES: | ||||||||
Payable for: | ||||||||
Distributions to shareholders | 14,926 | |||||||
Fund shares redeemed | 10,259 | |||||||
Investment advisory fee | 10,998 | |||||||
Transfer agent fee | 3,273 | |||||||
Trustees fees | 1,396 | |||||||
Accrued expenses | 1,793 | |||||||
|
| |||||||
Total liabilities | 42,645 | |||||||
|
| |||||||
NET ASSETS: | ||||||||
Capital | 25,484,738 | |||||||
Net accumulated realized loss on investment transactions |
| (7,177 | ) | |||||
Net unrealized appreciation in value of investments | 574,328 | |||||||
|
| |||||||
Net assets at value | $ | 26,051,889 | ||||||
|
| |||||||
NET ASSET VALUE, offering price and redemption price per share ($26,051,889 ÷ 2,372,897 shares outstanding; unlimited number of shares authorized; no par value) | $ | 10.98 | ||||||
|
|
STATEMENT OF OPERATIONS
For the six months ended December 31, 2013
Net investment income: | ||||
Interest income | $ | 343,280 | ||
|
| |||
Expenses: | ||||
Investment advisory fee | 66,236 | |||
Transfer agent fee | 19,705 | |||
Custodian expense | 4,800 | |||
Professional fees | 7,408 | |||
Trustee fees | 1,526 | |||
Other expenses | 7,425 | |||
|
| |||
Total expenses | 107,100 | |||
Custodian expense reduction | (3 | ) | ||
|
| |||
Net expenses | 107,097 | |||
|
| |||
Net investment income | 236,183 | |||
|
| |||
Realized and unrealized loss on investments: | ||||
Net realized loss | (6,778 | ) | ||
Net change in unrealized appreciation/depreciation | (10,775 | ) | ||
|
| |||
Net realized and unrealized loss on investments | (17,553 | ) | ||
|
| |||
Net increase in net assets resulting from operations | $ | 218,630 | ||
|
|
The accompanying notes are an integral part of the financial statements.
34
Table of Contents
NORTH CAROLINA TAX-FREE SHORT-TO-MEDIUM SERIES
STATEMENTS OF CHANGES IN NET ASSETS
For the six months ended December 31, 2013 and the year ended June 30, 2013 | UNAUDITED |
Six Months Ended 12/31/2013 | One Year Ended 6/30/2013 | |||||||
Operations: | ||||||||
Net investment income | $ | 236,183 | $ | 497,855 | ||||
Net realized gain/(loss) on investments | (6,778 | ) | 48,620 | |||||
Net change in unrealized appreciation/depreciation | (10,775 | ) | (572,951 | ) | ||||
|
|
|
| |||||
Net increase/(decrease) in net assets resulting from operations | 218,630 | (26,476 | ) | |||||
Distributions from net investment income | (236,185 | ) | (497,853 | ) | ||||
Distributions from capital gains | (41,274 | ) | (39,121 | ) | ||||
Net fund share transactions (Note 4) | (222,546 | ) | 2,163,181 | |||||
|
|
|
| |||||
Total increase/(decrease) | (281,375 | ) | 1,599,731 | |||||
Net assets: | ||||||||
Beginning of period | 26,333,264 | 24,733,533 | ||||||
|
|
|
| |||||
End of period | $ | 26,051,889 | $ | 26,333,264 | ||||
|
|
|
| |||||
Accumulated Net Investment Income | $ | — | $ | 2 | ||||
|
|
|
|
FINANCIAL HIGHLIGHTS
Selected data for a share outstanding: | Six Months Ended 12/31/13 | For the years ended June 30, | ||||||||||||||||||||||
2013 | 2012 | 2011 | 2010 | 2009 | ||||||||||||||||||||
Net asset value, beginning of year | $ | 11.00 | $ | 11.23 | $ | 10.93 | $ | 10.78 | $ | 10.57 | $ | 10.37 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Income from investment operations: | ||||||||||||||||||||||||
Net investment income | 0.10 | 0.21 | 0.24 | 0.26 | 0.29 | 0.32 | ||||||||||||||||||
Net gains/(losses) on securities, both realized and unrealized | 0.00 | (0.21 | ) | 0.30 | 0.15 | 0.21 | 0.20 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total from investment operations | 0.10 | 0.00 | 0.54 | 0.41 | 0.50 | 0.52 | ||||||||||||||||||
Less distributions: | ||||||||||||||||||||||||
Distributions from net investment income | (0.10 | ) | (0.21 | ) | (0.24 | ) | (0.26 | ) | (0.29 | ) | (0.32 | ) | ||||||||||||
Distributions from capital gains | (0.02 | ) | (0.02 | ) | — | — | — | — | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total distributions | (0.12 | ) | (0.23 | ) | (0.24 | ) | (0.26 | ) | (0.29 | ) | (0.32 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net asset value, end of period | $ | 10.98 | $ | 11.00 | $ | 11.23 | $ | 10.93 | $ | 10.78 | $ | 10.57 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total return | 0.72% | (b) | (0.06 | )% | 4.98% | 3.86% | 4.77% | 5.07% | ||||||||||||||||
Net assets, end of period (in thousands) | $ | 26,052 | $ | 26,333 | $ | 24,734 | $ | 22,079 | $ | 15,951 | $ | 11,662 | ||||||||||||
Ratio of net expenses to average net assets (a) | 0.82% | (c) | 0.78% | 0.78% | 0.77% | 0.82% | 0.81% | |||||||||||||||||
Ratio of net investment income to average net assets | 1.80% | (c) | 1.87% | 2.15% | 2.41% | 2.69% | 3.04% | |||||||||||||||||
Portfolio turnover | 3.52% | (b) | 10.19% | 12.31% | 5.15% | 17.94% | 10.14% |
(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 | |||||||||
0% | (c) | 0% | (c) | For the six months ended December 31, 2013 | ||||||
0% | 0% | For the year ended June 30, 2013 | ||||||||
0% | 0% | For the year ended June 30, 2012 | ||||||||
0% | 0% | For the year ended June 30, 2011 | ||||||||
0% | 0% | For the year ended June 30, 2010 | ||||||||
.02% | .03% | For the year ended June 30, 2009 |
(b) | Not annualized |
(c) | Annualized |
The accompanying notes are an integral part of the financial statements.
35
Table of Contents
UNAUDITED |
SCHEDULE OF PORTFOLIO INVESTMENTS
Tennessee Municipal Bonds — 100% of Net Assets
December 31, 2013
Bond Description | Coupon | Maturity Date | Rating# | Par Value | Fair Value | |||||||||||||
MUNICIPAL UTILITY REVENUE BONDS | ||||||||||||||||||
41.00% of Net Assets | ||||||||||||||||||
Blount County TN Public Building Authority Local Government ** | 5.000 | % | 06/01/2032 | Aa3 | $ | 750,000 | $ | 763,628 | ||||||||||
Columbia TN Refunded — Sewer System | 5.000 | 12/01/2024 | Aa2 | 1,235,000 | 1,309,347 | |||||||||||||
Columbia TN Broadband Network Revenue and Tax | 5.000 | 03/01/2025 | Aa2 | 1,000,000 | 1,036,870 | |||||||||||||
Franklin TN Water and Sewer Revenue and Tax Authority | 5.000 | 04/01/2024 | Aaa | 750,000 | 891,690 | |||||||||||||
Metropolitan Government Nashville and Davidson County | 5.000 | 10/01/2033 | Aa1/AA* | 500,000 | 536,580 | |||||||||||||
Bristol TN Electric Revenue | 5.000 | 09/01/2038 | AA-* | 1,525,000 | 1,611,086 | |||||||||||||
Chattanooga TN Electric Revenue | 5.000 | 09/01/2026 | AA+*/AA@ | 250,000 | 271,583 | |||||||||||||
Citizens Gas Utility District TN Gas Revenue Refunding | 5.000 | 05/01/2029 | A* | 250,000 | 258,128 | |||||||||||||
Clarksville TN Electric System Revenue | 5.000 | 09/01/2032 | Aa2 | 1,250,000 | 1,282,300 | |||||||||||||
Clarksville TN Electric System Revenue | 5.000 | 09/01/2028 | Aa2/AA-* | 1,000,000 | 1,075,520 | |||||||||||||
Clarksville TN Electric System Revenue | 5.000 | 09/01/2032 | Aa2/AA-* | 480,000 | 503,237 | |||||||||||||
Clarksville TN Electric System Revenue | 5.000 | 09/01/2033 | Aa2/AA-* | 2,000,000 | 2,086,180 | |||||||||||||
Clarksville TN Water Sewer & Gas Revenue | 5.000 | 02/01/2033 | Aa3/AA-@ | 500,000 | 518,830 | |||||||||||||
Columbia TN Waterworks Revenue | 5.000 | 12/01/2032 | Aa3 | 885,000 | 923,144 | |||||||||||||
Gallatin TN Water and Sewer Revenue | 5.000 | 01/01/2028 | Aa3 | 2,540,000 | 2,667,508 | |||||||||||||
Hallsdale-Powell Utility District Knox County Water & Sewer | 5.000 | 04/01/2026 | Baa1/AA* | 1,000,000 | 1,061,450 | |||||||||||||
Hallsdale-Powell Utility District Knox County Water & Sewer | 5.000 | 04/01/2031 | Baa1/AA* | 740,000 | 764,575 | |||||||||||||
Harpeth Valley TN Utilities District | 5.000 | 09/01/2040 | AA* | 1,000,000 | 1,041,320 | |||||||||||||
Harpeth Valley Utilities Davidson and Williamson Counties | 5.000 | 09/01/2032 | Aa3 | 1,420,000 | 1,505,186 | |||||||||||||
Jackson TN Energy Authority Gas System Revenue | 5.000 | 10/01/2028 | Aa2 | 1,000,000 | 1,074,070 | |||||||||||||
Knox-Chapman TN Utility District Knox County Water and Sewer | 5.300 | 01/01/2036 | AA-* | 700,000 | 742,434 | |||||||||||||
Knox Chapman TN Utilities Refunding & Impact | 4.500 | 01/01/2027 | AA-* | 1,000,000 | �� | 1,065,500 | ||||||||||||
Metropolitan Government Nashville and Davidson County TN | 4.800 | 05/15/2028 | AA+*/AA+@ | 460,000 | 482,347 | |||||||||||||
Metropolitan Government Nashville and Davidson County TN | 5.000 | 05/15/2036 | AA+*/AA+@ | 3,085,000 | 3,239,929 | |||||||||||||
Metropolitan Government Nashville & Davidson County TN Water & Sewer Revenue | 5.000 | 07/01/2031 | Aa3/AA-* | 500,000 | 540,430 | |||||||||||||
Metropolitan Government Nashville & Davidson County TN Water & Sewer Revenue | 5.000 | 07/01/2030 | Aa3/AA-* | 3,250,000 | 3,539,640 | |||||||||||||
Metropolitan Government Nashville & Davidson County TN Water & Sewer Revenue | 5.000 | 07/01/2033 | Aa3/AA-* | 575,000 | 614,451 | |||||||||||||
South Blount County TN Utility District Waterworks Revenue | 5.000 | 12/01/2028 | A2/AA-* | 1,125,000 | 1,196,504 | |||||||||||||
Watauga River Tn Regional Water Authority Waterworks | 5.000 | 07/01/2034 | A* | 500,000 | 508,310 | |||||||||||||
West Wilson Utility District TN Waterworks Revenue | 4.800 | 06/01/2028 | Aa3 | 2,460,000 | 2,578,351 | |||||||||||||
West Wilson Utility District TN Waterworks Revenue | 5.000 | 06/01/2033 | Aa3 | 1,170,000 | 1,269,415 | |||||||||||||
White House Utility District TN Water and Sewer | 5.000 | 01/01/2028 | Aa3 | 1,235,000 | 1,290,191 | |||||||||||||
White House Utility District TN Water and Sewer | 5.000 | 01/01/2030 | Aa3 | 2,505,000 | 2,610,410 | |||||||||||||
|
| |||||||||||||||||
40,860,144 | ||||||||||||||||||
UNIVERSITY CONSOLIDATED EDUCATION AND BUILDING REVENUE BONDS | ||||||||||||||||||
12.23% of Net Assets | ||||||||||||||||||
TN State School Board Authority Higher Education Facilities | 5.000 | 05/01/2028 | Aa1/AA*/AA@ | 1,000,000 | 1,068,490 | |||||||||||||
TN State School Board Authority Higher Education Facilities | 5.100 | 05/01/2033 | Aa1/AA*/AA@ | 1,300,000 | 1,385,812 | |||||||||||||
TN State School Board Authority Higher Education Facilities | 5.000 | 05/01/2034 | Aa1/AA*/AA+@ | 500,000 | 525,000 | |||||||||||||
TN State School Board Authority Refunding Higher Education | 5.000 | 05/01/2024 | Aa1/AA*/AA+@ | 1,395,000 | 1,459,756 | |||||||||||||
TN State School Board Authority Refunding Higher Education | 5.000 | 05/01/2025 | Aa1/AA*/AA+@ | 1,440,000 | 1,505,275 | |||||||||||||
TN State School Board Authority Higher Education Facilities | 4.800 | 05/01/2030 | Aa1/AA*/AA+@ | 2,750,000 | 2,856,948 | |||||||||||||
TN State School Board Authority Higher Education Facilities | 5.000 | 05/01/2039 | Aa1/AA*/AA+@ | 500,000 | 524,265 | |||||||||||||
Metropolitan TN Government Nashville & Davidson County Vanderbilt University | 5.000 | 10/01/2034 | Aa2/AA*/AA+@ | 1,000,000 | 1,054,010 | |||||||||||||
Metropolitan TN Government Nashville & Davidson County Vanderbilt University | 5.000 | 10/01/2028 | Aa2/AA*/AA+@ | 1,150,000 | 1,278,076 | |||||||||||||
Shelby County TN Health Education Facilities Board Rhodes College | 5.000 | 08/01/2030 | A1/A+* | 500,000 | 527,725 | |||||||||||||
|
| |||||||||||||||||
12,185,357 |
The accompanying notes are an integral part of the financial statements.
36
Table of Contents
DUPREE MUTUAL FUNDS — TENNESSEE TAX-FREE INCOME SERIES | UNAUDITED |
SCHEDULE OF PORTFOLIO INVESTMENTS
Tennessee Municipal Bonds — 100% of Net Assets
December 31, 2013
Bond Description | Coupon | Maturity Date | Rating# | Par Value | Fair Value | |||||||||||||
PUBLIC FACILITIES REVENUE BONDS | ||||||||||||||||||
11.56% of Net Assets | ||||||||||||||||||
Blount County TN Public Building Authority Local Government | 5.000 | % | 06/01/2025 | Aa2/AA* | $ | 100,000 | $ | 110,984 | ||||||||||
Blount County TN Public Building Authority Local Government ** | 5.000 | 06/01/2027 | Aa2/AA* | 1,500,000 | 1,640,280 | |||||||||||||
Blount County TN Public Building Authority Local Government ** | 4.800 | 06/01/2031 | Aa2/AA* | 750,000 | 788,310 | |||||||||||||
Pigeon Forge Industrial Development Board TN | 5.000 | 06/01/2024 | AA* | 600,000 | 672,048 | |||||||||||||
Pigeon Forge Industrial Development Board TN | 5.000 | 06/01/2027 | AA* | 1,400,000 | 1,542,814 | |||||||||||||
Pigeon Forge Industrial Development Board TN Public Facilities | 5.000 | 06/01/2029 | AA* | 2,120,000 | 2,304,440 | |||||||||||||
Pigeon Forge Industrial Development Board TN Public Facilities | 5.000 | 06/01/2034 | AA* | 850,000 | 897,354 | |||||||||||||
Memphis Shelby County TN Sports Authority Memphis Arena | 5.300 | 11/01/2026 | Aa3/AA-*/A+@ | 500,000 | 532,204 | |||||||||||||
Memphis-Shelby County Sports Authority | 5.300 | 11/01/2027 | Aa3/AA-*/A+@ | 750,000 | 791,910 | |||||||||||||
Metropolitan Government Nashville & Davidson County TN Convention Center | 5.000 | 07/01/2026 | A1/A* | 630,000 | 680,715 | |||||||||||||
Metropolitan Government Nashville & Davidson County Sports Authority | 5.000 | 08/01/2031 | Aa2/AA-* | 1,500,000 | 1,557,810 | |||||||||||||
|
| |||||||||||||||||
11,518,869 | ||||||||||||||||||
HOSPITAL AND HEALTHCARE | ||||||||||||||||||
8.81% of Net Assets | ||||||||||||||||||
Chattanooga TN Health Education and Housing Facilities Board | 5.000 | 01/01/2033 | A1/A+*/A+@ | 500,000 | 492,170 | |||||||||||||
Rutherford County TN Health and Education Facilities Ascension Health | 5.000 | 11/15/2040 | Aa2/AA+*/AA+@ | 1,500,000 | 1,504,455 | |||||||||||||
Shelby County TN Health Education and Housing Facilities | 5.000 | 05/01/2027 | A2/A+* | 750,000 | 776,828 | |||||||||||||
Shelby County TN Health Education and Housing Facilities | 5.000 | 07/01/2031 | Aa2/AAA@ | 4,750,000 | 4,966,647 | |||||||||||||
Shelby County TN Health Education and Housing Facilities | 5.300 | 09/01/2027 | A2/AA-* | 1,000,000 | 1,037,760 | |||||||||||||
|
| |||||||||||||||||
8,777,860 | ||||||||||||||||||
PREREFUNDED BONDS | ||||||||||||||||||
6.36% of Net Assets | ||||||||||||||||||
Johnson City TN Health & Education Facilities Escrowed Series 2000 A | 5.100 | 07/01/2025 | A* | 270,000 | 270,323 | |||||||||||||
Knoxville TN Waste Water System Revenue Improvement | 5.000 | 04/01/2037 | Aa2/AA+* | 370,000 | 391,823 | |||||||||||||
Metropolitan Government Nashville and Davidson County TN | 5.000 | 01/01/2025 | Aa1/AA* | 4,025,000 | 4,651,330 | |||||||||||||
Metropolitan Government Nashville and Davidson County TN | 5.000 | 05/15/2017 | Aa1/A* | 205,000 | 234,104 | |||||||||||||
Metropolitan Government Nashville and Davidson County TN | 5.000 | 05/15/2017 | Aa1/A* | 35,000 | 39,969 | |||||||||||||
Rutherford County TN Construction Utility District Waterworks | 5.000 | 02/01/2031 | Aa2/AAA* | 685,000 | 750,459 | |||||||||||||
|
| |||||||||||||||||
6,338,008 | ||||||||||||||||||
REFUNDING BONDS | ||||||||||||||||||
5.87% of Net Assets | ||||||||||||||||||
Blount County TN Public Building Authority General Obligation | 5.300 | 06/01/2019 | Baa1 | 250,000 | 252,645 | |||||||||||||
Greene County TN General Obligation Series B | 5.000 | 06/01/2024 | A1 | 505,000 | 536,376 | |||||||||||||
Manchester TN Refunding General Obligation | 5.000 | 06/01/2038 | A2/AA* | 100,000 | 105,491 | |||||||||||||
Metropolitan Government Nashville and Davidson County TN | 5.000 | 05/15/2027 | Aa1/AA* | 1,195,000 | 1,281,387 | |||||||||||||
Metropolitan Government Nashville and Davidson County TN | 5.000 | 05/15/2028 | Aa1/AA* | 205,000 | 217,847 | |||||||||||||
Pigeon Forge TN Refunding Series A | 4.900 | 06/01/2028 | Aa3/AA* | 1,000,000 | 1,053,450 | |||||||||||||
Shelby County TN Refunding Series A | 5.000 | 03/01/2026 | Aa1/AA+*/AA+@ | 1,200,000 | 1,345,860 | |||||||||||||
Chattanooga TN Industrial Development Board Lease Rent Revenue | 5.000 | 10/01/2027 | A2/AA+*/AA@ | 1,000,000 | 1,052,230 | |||||||||||||
|
| |||||||||||||||||
5,845,286 | ||||||||||||||||||
STATE AND LOCAL MORTGAGE/HOUSING BONDS | ||||||||||||||||||
4.59% of Net Assets | ||||||||||||||||||
Oak Ridge TN Industrial Development Board Refunding Revenue | 5.300 | 08/20/2018 | Aa1 | 255,000 | 254,992 | |||||||||||||
TN Housing Development Agency Series 1B | 5.000 | 07/01/2029 | Aa1/AA+* | 595,000 | 603,824 | |||||||||||||
TN Housing Development Agency | 5.000 | 07/01/2028 | Aa1/AA+* | 560,000 | 579,359 | |||||||||||||
TN Housing Development Agency | 5.400 | 07/01/2035 | Aa1/AA+* | 410,000 | 420,184 | |||||||||||||
TN Housing Development Agency Homeownership Program 1 | 5.000 | 07/01/2029 | Aa1/AA+* | 675,000 | 689,992 | |||||||||||||
TN Housing Development Agency Homeownership Program 2 | 4.700 | 07/01/2027 | Aa1/AA+* | 1,340,000 | 1,365,701 | |||||||||||||
TN Housing Development Agency Housing Finance Program | 4.900 | 01/01/2025 | Aa2 | 645,000 | 656,508 | |||||||||||||
|
| |||||||||||||||||
4,570,560 |
The accompanying notes are an integral part of the financial statements.
37
Table of Contents
DUPREE MUTUAL FUNDS — TENNESSEE TAX-FREE INCOME SERIES | UNAUDITED |
SCHEDULE OF PORTFOLIO INVESTMENTS
Tennessee Municipal Bonds — 100% of Net Assets
December 31, 2013
Bond Description | Coupon | Maturity Date | Rating# | Par Value | Fair Value | |||||||||||||
SCHOOL IMPROVEMENT BONDS | ||||||||||||||||||
4.57% of Net Assets | ||||||||||||||||||
Cleveland TN General Obligation | 5.000 | % | 06/01/2027 | Aa3/A+* | $ | 680,000 | $ | 711,620 | ||||||||||
Marion County TN Schools | 5.000 | 06/01/2025 | A1 | 1,050,000 | 1,105,608 | |||||||||||||
Overton County TN Refunding Schools General Obligation | 5.000 | 04/01/2018 | Baa1 | 500,000 | 515,730 | |||||||||||||
Rhea County TN | 5.000 | 04/01/2029 | A1 | 1,385,000 | 1,470,427 | |||||||||||||
Smith County TN General Obligation | 5.000 | 04/01/2021 | 720,000 | 752,565 | ||||||||||||||
|
| |||||||||||||||||
4,555,950 | ||||||||||||||||||
MISCELLANEOUS PUBLIC IMPROVEMENT BONDS | ||||||||||||||||||
2.16% of Net Assets | ||||||||||||||||||
Memphis TN Refunding and General Impact General Obligation | 5.000 | 05/01/2036 | Aa2/AA* | 850,000 | 889,755 | |||||||||||||
Springfield TN Public Improvement | 4.500 | 03/01/2024 | A1 | 565,000 | 616,827 | |||||||||||||
Memphis Shelby County TN Port Authority Community Development | 5.000 | 04/01/2035 | Aa3/AA-* | 625,000 | 648,412 | |||||||||||||
|
| |||||||||||||||||
2,154,994 | ||||||||||||||||||
ESCROWED TO MATURITY BONDS | ||||||||||||||||||
1.23% of Net Assets | ||||||||||||||||||
Johnson City TN Health & Education Facilities Medical Center | 5.000 | 07/01/2018 | A* | 135,000 | 135,118 | |||||||||||||
Johnson City TN Health & Education Facilities Mountain State | 6.500 | 07/01/2014 | Baa1/A*/BBB+@ | 1,000,000 | 1,025,780 | |||||||||||||
Metropolitan Nashville and Davidson County TN Water and Sewer | 6.500 | 12/01/2014 | A* | 60,000 | 63,436 | |||||||||||||
|
| |||||||||||||||||
1,224,334 | ||||||||||||||||||
INDUSTRIAL REVENUE BONDS | ||||||||||||||||||
0.92% of Net Assets | ||||||||||||||||||
Industrial Development Board TN Blount County | 5.000 | 06/01/2027 | Aa3/AA-* | 850,000 | 921,647 | |||||||||||||
|
| |||||||||||||||||
Total Investments (cost $97,373,725) (See (a) below for further explanation) 99.30% of Net Assets |
| $ | 98,953,009 | |||||||||||||||
|
| |||||||||||||||||
Other assets in excess of liabilities .70% | 698,218 | |||||||||||||||||
|
| |||||||||||||||||
Net Assets 100% | $ | 99,651,227 | ||||||||||||||||
|
|
* | Standard and Poor’s Corporation |
** | Segregated security — see footnote 8 |
@ | Fitch’s Investors Service |
(All other ratings by Moody’s Investors Service, Inc.) |
NR | Not Rated |
# | Bond ratings are unaudited and not covered by Report of Independent Registered Public Accounting Firm. |
(a) | Cost for federal income tax purposes is $97,373,725 and net unrealized appreciation of investments is as follows: |
Unrealized appreciation | $ | 2,591,595 | ||||
Unrealized depreciation | (1,012,311 | ) | ||||
|
| |||||
Net unrealized appreciation | $ | 1,579,284 | ||||
|
|
Other Information
The following is a summary of the inputs used, as of December 31, 2013 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.
The Fund held no investments or other financial instruments as of December 31, 2013 whose fair value was determined using Level 3 inputs. There were no transfers in and out of level 1, 2 or 3 during the period ending December 31, 2013.
Valuation Inputs | Municipal Bonds | |||||
Level 1 | Quoted Prices | $ | — | |||
Level 2 | Other Significant Observable Inputs | 98,953,009 | ||||
Level 3 | Significant Unobservable Inputs | — | ||||
|
| |||||
$ | 98,953,009 | |||||
|
|
The accompanying notes are an integral part of the financial statements.
38
Table of Contents
TENNESSEE TAX-FREE INCOME SERIES
STATEMENT OF ASSETS AND LIABILITIES
December 31, 2013 | UNAUDITED |
ASSETS: | ||||||||
Investments in securities, at fair value (Cost: $97,373,725) | $ | 98,953,009 | ||||||
Cash | 42,687 | |||||||
Interest receivable | 1,304,391 | |||||||
|
| |||||||
Total assets | 100,300,087 | |||||||
LIABILITIES: | ||||||||
Payable for: | ||||||||
Distributions to shareholders | 274,938 | |||||||
Fund shares redeemed | 180,670 | |||||||
Investment advisory fee | 42,271 | |||||||
Transfer agent fee | 10,881 | |||||||
Trustees fees | 2,341 | |||||||
Note payable | 99,000 | |||||||
Accrued expenses | 38,759 | |||||||
|
| |||||||
Total liabilities | 648,860 | |||||||
|
| |||||||
NET ASSETS: | ||||||||
Capital | 98,780,912 | |||||||
Net accumulated realized loss on investment transactions |
| (708,969 | ) | |||||
Net unrealized appreciation in value of investments | 1,579,284 | |||||||
|
| |||||||
Net assets at value | $ | 99,651,227 | ||||||
|
| |||||||
NET ASSET VALUE, offering price and redemption price per share | $ | 11.14 | ||||||
|
|
STATEMENT OF OPERATIONS
For the six months ended December 31, 2013
Net investment income: | ||||
Interest income | $ | 2,033,424 | ||
|
| |||
Expenses: | ||||
Investment advisory fee | 255,929 | |||
Transfer agent fee | 65,915 | |||
Custodian expense | 9,785 | |||
Professional fees | 11,372 | |||
Trustee fees | 2,341 | |||
Other expenses | 20,238 | |||
|
| |||
Total expenses | 365,580 | |||
Custodian expense reduction | (11 | ) | ||
|
| |||
Net expenses | 365,569 | |||
|
| |||
Net investment income | 1,667,855 | |||
|
| |||
Realized and unrealized loss on investments: | ||||
Net realized loss | (288,407 | ) | ||
Net change in unrealized appreciation/depreciation | (1,011,424 | ) | ||
|
| |||
Net realized and unrealized loss on investments | (1,299,831 | ) | ||
|
| |||
Net increase in net assets resulting from operations | $ | 368,024 | ||
|
|
The accompanying notes are an integral part of the financial statements.
39
Table of Contents
TENNESSEE TAX-FREE INCOME SERIES
STATEMENTS OF CHANGES IN NET ASSETS
For the six months ended December 31, 2013 and the year ended June 30, 2013 | UNAUDITED |
Six Months Ended 12/31/2013 | One Year Ended 6/30/2013 | |||||||
Operations: | ||||||||
Net investment income | $ | 1,667,855 | $ | 3,364,193 | ||||
Net realized gain/(loss) on investments | (288,407 | ) | 200,774 | |||||
Net change in unrealized appreciation/depreciation | (1,011,424 | ) | (3,013,866 | ) | ||||
|
|
|
| |||||
Net increase in net assets resulting from operations | 368,024 | 551,101 | ||||||
Distributions from net investment income | (1,667,855 | ) | (3,364,193 | ) | ||||
Net fund share transactions (Note 4) | (4,745,319 | ) | 7,926,230 | |||||
|
|
|
| |||||
Total increase/(decrease) | (6,045,150 | ) | 5,113,138 | |||||
Net assets: | ||||||||
Beginning of period | 105,696,377 | 100,583,239 | ||||||
|
|
|
| |||||
End of period | $ | 99,651,227 | $ | 105,696,377 | ||||
|
|
|
|
FINANCIAL HIGHLIGHTS
Selected data for a share outstanding: | Six Months Ended 12/31/13 | For the years ended June 30, | ||||||||||||||||||||||
2013 | 2012 | 2011 | 2010 | 2009 | ||||||||||||||||||||
Net asset value, beginning of year | $ | 11.27 | $ | 11.56 | $ | 11.04 | $ | 11.04 | $ | 10.71 | $ | 10.77 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Income from investment operations: | ||||||||||||||||||||||||
Net investment income | 0.18 | 0.36 | 0.40 | 0.41 | 0.40 | 0.41 | ||||||||||||||||||
Net gains/(losses) on securities, both realized and unrealized | (0.13 | ) | (0.29 | ) | 0.52 | — | (d) | 0.33 | (0.06 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total from investment operations | 0.05 | 0.07 | 0.92 | 0.41 | 0.73 | 0.35 | ||||||||||||||||||
Less distributions: | ||||||||||||||||||||||||
Distributions from net investment income | (0.18 | ) | (0.36 | ) | (0.40 | ) | (0.41 | ) | (0.40 | ) | (0.41 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net asset value, end of period | $ | 11.14 | $ | 11.27 | $ | 11.56 | $ | 11.04 | $ | 11.04 | $ | 10.71 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total return | 0.48% | (b) | 0.56% | 8.44% | 3.78% | 6.92% | 3.40% | |||||||||||||||||
Net assets, end of period (in thousands) | $ | 99,651 | $ | 105,696 | $ | 100,583 | $ | 91,740 | $ | 94,960 | $ | 92,222 | ||||||||||||
Ratio of net expenses to average net assets (a) | 0.72% | (c) | 0.65% | 0.70% | 0.69% | 0.70% | 0.70% | |||||||||||||||||
Ratio of net investment income to average net assets | 3.28% | (c) | 3.10% | 3.50% | 3.68% | 3.67% | 3.90% | |||||||||||||||||
Portfolio turnover | 8.37% | (b) | 7.37% | 8.39% | 6.38% | 14.51% | 7.62% |
(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 | |||||
.00%(c) | 0% | (c) | For the six months ended December 31, 2013 | |||
.04% | 0% | For the year ended June 30, 2013 | ||||
.00% | 0% | For the year ended June 30, 2012 | ||||
.00% | 0% | For the year ended June 30, 2011 | ||||
.00% | 0% | For the year ended June 30, 2010 | ||||
.00% | 0% | For the year ended June 30, 2009 | ||||
(b) | Not Annualized |
(c) | Annualized |
(d) | Rounds to less than $.01. |
The accompanying notes are an integral part of the financial statements.
40
Table of Contents
DUPREE MUTUAL FUNDS — TENNESSEE TAX-FREE SHORT-TO-MEDIUM SERIES | UNAUDITED |
SCHEDULE OF PORTFOLIO INVESTMENTS
Tennessee Municipal Bonds — 100% of Net Assets
December 31, 2013
Bond Description | Coupon | Maturity Date | Rating# | Par Value | Fair Value | |||||||||||||
REFUNDING BONDS | ||||||||||||||||||
21.08% of Net Assets | ||||||||||||||||||
Johnson City TN Refunding | 4.000 | % | 06/01/2015 | AA@ | $ | 400,000 | $ | 420,204 | ||||||||||
Memphis TN General Improvement | 5.000 | 04/01/2022 | Aa2/AA*/AA-@ | 185,000 | 206,843 | |||||||||||||
Memphis TN General Obligation | 5.000 | 05/01/2020 | Aa2/AA*/AA-@ | 250,000 | 285,850 | |||||||||||||
Metropolitan Government Nashville & Davidson County TN Refunding | 5.000 | 05/15/2019 | Aa1/AA* | 215,000 | 241,768 | |||||||||||||
Metropolitan Government Nashville & Davidson County TN Refunding | 5.000 | 07/01/2021 | Aa1/AA* | 175,000 | 202,005 | |||||||||||||
Metropolitan Government Nashville & Davidson County TN | 4.000 | 07/01/2023 | Aa1/AA* | 250,000 | 266,033 | |||||||||||||
Polk County TN Refinancing | 5.000 | 05/01/2020 | A2 | 150,000 | 164,489 | |||||||||||||
Rhea County TN | 3.000 | 04/01/2018 | A1 | 200,000 | 212,220 | |||||||||||||
Unicoi County TN Refunding | 5.250 | 04/01/2019 | A1/A+* | 200,000 | 232,344 | |||||||||||||
|
| |||||||||||||||||
2,231,756 | ||||||||||||||||||
MUNICIPAL UTILITY REVENUE BONDS | ||||||||||||||||||
17.22% of Net Assets | ||||||||||||||||||
Lawrenceburg TN Refunding Water and Sewer | 5.000 | 07/01/2015 | A2 | 125,000 | 133,181 | |||||||||||||
Castalian Springs - Bethpage TN Waterworks | 3.000 | 01/01/2019 | A+* | 260,000 | 270,676 | |||||||||||||
Chattanooga TN Electric Revenue | 5.000 | 09/01/2021 | AA+*/AA@ | 400,000 | 446,884 | |||||||||||||
Columbia TN Electric System Revenue | 5.000 | 09/01/2021 | Aa3 | 165,000 | 183,058 | |||||||||||||
Cross Anchor TN Utility District | 4.250 | 12/01/2015 | AA-* | 65,000 | 69,115 | |||||||||||||
Cross Anchor TN Utility District | 4.250 | 12/01/2016 | AA-* | 65,000 | 70,684 | |||||||||||||
Johnson City TN Electric Revenue | 4.000 | 05/01/2022 | Aa2/AA-* | 100,000 | 104,897 | |||||||||||||
Johnson City TN Electric Revenue | 4.500 | 05/01/2021 | Aa2/AA-* | 50,000 | 54,360 | |||||||||||||
Metropolitan Government Nashville & Davidson County Water &Sewer | 5.250 | 01/01/2019 | Aa2/AA-* | 125,000 | 146,381 | |||||||||||||
New Market Utilty District Jefferson County TN Waterworks | 4.000 | 06/01/2016 | A3/AA-* | 100,000 | 107,145 | |||||||||||||
New Market Utilty District Jefferson County TN Waterworks | 4.000 | 06/01/2017 | A3/AA-* | 100,000 | 108,854 | |||||||||||||
Sevier County TN Utility District Gas System Revenue | 2.650 | 06/01/2015 | A+* | 125,000 | 127,538 | |||||||||||||
|
| |||||||||||||||||
1,822,773 | ||||||||||||||||||
MISCELLANEOUS PUBLIC IMPROVEMENT BONDS | ||||||||||||||||||
14.49% of Net Assets | ||||||||||||||||||
Blount County TN Public Building Authority | 4.000 | 06/01/2020 | Aa2/AA* | 150,000 | 163,794 | |||||||||||||
Blount County TN Public Building Authority | 5.000 | 06/01/2021 | Aa2/AA* | 175,000 | 198,741 | |||||||||||||
Claiborne County TN Public Improvement | 5.000 | 04/01/2017 | A+* | 170,000 | 191,340 | |||||||||||||
Gallatin County Capital Outlay Notes | 4.630 | 01/01/2019 | AA+* | 100,000 | 113,861 | |||||||||||||
Memphis TN Refunding General Improvement | 5.000 | 10/01/2017 | Aa2/AA*/AA-@ | 100,000 | 114,884 | |||||||||||||
Memphis TN | 5.000 | 04/01/2024 | Aa2/AA*/AA-@ | 200,000 | 215,181 | |||||||||||||
Tennessee State | 4.000 | 05/01/2021 | Aaa/AA+*/AAA@ | 340,000 | 363,848 | |||||||||||||
Sevier County TN Public Building Authority | 5.000 | 06/01/2018 | AA-* | 150,000 | 172,077 | |||||||||||||
|
| |||||||||||||||||
1,533,726 | ||||||||||||||||||
PREREFUNDED BONDS | ||||||||||||||||||
10.78% of Net Assets | ||||||||||||||||||
Maury County TN School and Public Improvement | 5.000 | 04/01/2016 | Aa2 | 400,000 | 404,684 | |||||||||||||
Memphis TN General Obligation General Improvement | 5.000 | 10/01/2016 | Aa2/AA*/AA-@ | 450,000 | 465,970 | |||||||||||||
Metropolitan Government Nashville and Davidson County | 5.000 | 01/01/2019 | Aa1/AA* | 200,000 | 230,866 | |||||||||||||
Metropolitan Government Nashville & Davidson County TN Refunding | 5.000 | 05/15/2017 | NR | 35,000 | 39,969 | |||||||||||||
|
| |||||||||||||||||
1,141,489 | ||||||||||||||||||
SCHOOL IMPROVEMENT BONDS | ||||||||||||||||||
9.46% of Net Assets | ||||||||||||||||||
Lincoln County TN | 5.250 | 04/01/2019 | Aa3 | 200,000 | 229,334 | |||||||||||||
Madison County TN Refunding School and Public Improvement | 5.000 | 04/01/2018 | Aa2/AA-* | 175,000 | 185,332 | |||||||||||||
Robertson County TN School | 4.000 | 06/01/2020 | Aa3/AA* | 250,000 | 269,275 | |||||||||||||
Robertson County TN School and Public Improvement | 4.000 | 06/01/2019 | AA* | 100,000 | 111,523 | |||||||||||||
Washington County TN Refunding School and Public Improvement | 5.000 | 04/01/2015 | Aa2 | 200,000 | 206,270 | |||||||||||||
|
| |||||||||||||||||
1,001,734 | ||||||||||||||||||
HOSPITAL AND HEALTHCARE | ||||||||||||||||||
6.80% of Net Assets | ||||||||||||||||||
Shelby County TN Health Education & Housing Facilities | 4.250 | 09/01/2020 | AA-* | 265,000 | 286,441 | |||||||||||||
Shelby County Health Education | 5.250 | 09/01/2020 | A2/AA-* | 400,000 | 433,844 | |||||||||||||
|
| |||||||||||||||||
720,285 |
The accompanying notes are an integral part of the financial statements.
41
Table of Contents
DUPREE MUTUAL FUNDS — TENNESSEE TAX-FREE SHORT-TO-MEDIUM SERIES | UNAUDITED |
SCHEDULE OF PORTFOLIO INVESTMENTS
Tennessee Municipal Bonds — 100% of Net Assets
December 31, 2013
Bond Description | Coupon | Maturity Date | Rating# | Par Value | Fair Value | |||||||||||||
STATE AND LOCAL MORTGAGE/HOUSING BONDS | ||||||||||||||||||
6.09% of Net Assets | ||||||||||||||||||
TN Housing Development Agency Homeownership Program | 4.200 | % | 01/01/2016 | Aa1/AA+* | $ | 105,000 | $ | 108,554 | ||||||||||
TN Housing Development Agency Series 1B | 4.800 | 07/01/2024 | Aa1/AA+* | 200,000 | 205,414 | |||||||||||||
TN Housing Development Agency Homeownership Program | 2.950 | 01/01/2015 | Aa1/AA+* | 90,000 | 91,778 | |||||||||||||
TN Housing Development Agency Homeownership Program | 1.900 | 07/01/2019 | Aa1/AA+* | 245,000 | 238,601 | |||||||||||||
|
| |||||||||||||||||
644,347 | ||||||||||||||||||
PUBLIC FACILITIES REVENUE BONDS | ||||||||||||||||||
5.17% of Net Assets | ||||||||||||||||||
Memphis-Shelby County TN Sports Authority Memphis Arena | 5.000 | 11/01/2017 | Aa3/AA-*/A+@ | 275,000 | 307,665 | |||||||||||||
Metropolitan Government Nashville & Davidson County TN Convention | 5.000 | 07/01/2015 | A1/A* | 125,000 | 132,463 | |||||||||||||
Metropolitan Government Nashville & Davidson County TN Convention | 3.750 | 07/01/2018 | A1/A* | 100,000 | 107,094 | |||||||||||||
|
| |||||||||||||||||
547,222 | ||||||||||||||||||
UNIVERSITY CONSOLIDATED EDUCATION AND BUILDING REVENUE BONDS | ||||||||||||||||||
3.64% of Net Assets | ||||||||||||||||||
Franklin County TN Health & Education Facilities | 4.000 | 09/01/2019 | A+* | 350,000 | 384,951 | |||||||||||||
|
| |||||||||||||||||
AIRPORT BONDS | ||||||||||||||||||
2.41% of Net Assets | ||||||||||||||||||
Metropolitan Nashville Airport Authority | 4.500 | 07/01/2014 | A2/AA-* | 250,000 | 255,038 | |||||||||||||
|
| |||||||||||||||||
Total Investments (cost $10,125,807) (See (a) below for further explanation) 97.14% of Net Assets |
| $ | 10,283,321 | |||||||||||||||
|
| |||||||||||||||||
Other assets in excess of liabilities 2.86% | 302,731 | |||||||||||||||||
|
| |||||||||||||||||
Net Assets 100% | $ | 10,586,052 | ||||||||||||||||
|
|
* | Standard and Poor’s Corporation |
@ | Fitch’s Investors Service |
(All other ratings by Moody’s Investors Service, Inc.) |
NR | Not Rated |
# | Bond ratings are unaudited and not covered by Report of Independent Registered Public Accounting Firm. |
(a) | Cost for federal income tax purposes is $10,125,807 and net unrealized appreciation of investments is as follows: |
Unrealized appreciation | $ | 228,110 | ||||
Unrealized depreciation | (70,596 | ) | ||||
|
| |||||
Net unrealized appreciation | $ | 157,514 | ||||
|
|
Other Information
The following is a summary of the inputs used, as of December 31, 2013 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.
The Fund held no investments or other financial instruments as of December 31, 2013 whose fair value was determined using Level 3 inputs. There were no transfers in and out of level 1, 2 or 3 during the period ending December 31, 2013.
Valuation Inputs | Municipal Bonds | |||||
Level 1 | Quoted Prices | $ | — | |||
Level 2 | Other Significant Observable Inputs | 10,283,321 | ||||
Level 3 | Significant Unobservable Inputs | — | ||||
|
| |||||
$ | 10,283,321 | |||||
|
|
The accompanying notes are an integral part of the financial statements.
42
Table of Contents
TENNESSEE TAX-FREE SHORT-TO-MEDIUM SERIES
STATEMENT OF ASSETS AND LIABILITIES
December 31, 2013 | UNAUDITED |
ASSETS: | ||||||||
Investments in securities, at fair value (Cost: $10,125,807) | $ | 10,283,321 | ||||||
Cash | 194,226 | |||||||
Defaulted securities receivable | 23,607 | |||||||
Interest receivable | 119,654 | |||||||
|
| |||||||
Total assets | 10,620,808 | |||||||
LIABILITIES: | ||||||||
Payable for: | ||||||||
Distributions to shareholders | 3,182 | |||||||
Fund shares redeemed | 16,080 | |||||||
Investment advisory fee | 4,455 | |||||||
Transfer agent fee | 1,396 | |||||||
Trustees fees | 1,081 | |||||||
Accrued expenses | 8,562 | |||||||
|
| |||||||
Total liabilities | 34,756 | |||||||
|
| |||||||
NET ASSETS: | ||||||||
Capital | 10,689,810 | |||||||
Net accumulated realized loss on investment transactions |
| (261,272 | ) | |||||
Net unrealized appreciation in value of investments | 157,514 | |||||||
|
| |||||||
Net assets at value | $ | 10,586,052 | ||||||
|
| |||||||
NET ASSET VALUE, offering price and redemption price per share | $ | 10.71 | ||||||
|
|
STATEMENT OF OPERATIONS
For the six months ended December 31, 2013
Net investment income: | ||||
Interest income | $ | 146,138 | ||
|
| |||
Expenses: | ||||
Investment advisory fee | 27,502 | |||
Transfer agent fee | 8,566 | |||
Custodian expense | 4,449 | |||
Professional fees | 1,206 | |||
Trustee fees | 1,649 | |||
Other expenses | 4,002 | |||
|
| |||
Total expenses | 47,374 | |||
Custodian expense reduction | (1 | ) | ||
|
| |||
Net expenses | 47,373 | |||
|
| |||
Net investment income | 98,765 | |||
|
| |||
Realized and unrealized gain/(loss) on investments: | ||||
Net realized gain | 4,724 | |||
Net change in unrealized appreciation/depreciation | (44,159 | ) | ||
|
| |||
Net realized and unrealized loss on investments | (39,435 | ) | ||
|
| |||
Net increase in net assets resulting from operations | $ | 59,330 | ||
|
|
The accompanying notes are an integral part of the financial statements.
43
Table of Contents
TENNESSEE TAX-FREE SHORT-TO-MEDIUM SERIES
STATEMENTS OF CHANGES IN NET ASSETS
For the six months ended December 31, 2013 and the year ended June 30, 2013 | UNAUDITED |
Six Months Ended 12/31/2013 | One Year Ended 6/30/2013 | |||||||
Operations: | ||||||||
Net investment income | $ | 98,765 | $ | 226,505 | ||||
Net realized gain on investments | 4,724 | 46,406 | ||||||
Net change in unrealized appreciation/depreciation | (44,159 | ) | (312,568 | ) | ||||
|
|
|
| |||||
Net increase/(decrease) in net assets resulting from operations | 59,330 | (39,657 | ) | |||||
Distributions from net investment income | (98,765 | ) | (226,505 | ) | ||||
Net fund share transactions (Note 4) | (395,207 | ) | (739,399 | ) | ||||
|
|
|
| |||||
Total (decrease) | (434,642 | ) | (1,005,561 | ) | ||||
Net assets: | ||||||||
Beginning of period | 11,020,694 | 12,026,255 | ||||||
|
|
|
| |||||
End of period | $ | 10,586,052 | $ | 11,020,694 | ||||
|
|
|
|
FINANCIAL HIGHLIGHTS
Selected data for a share outstanding: | Six Months Ended 12/31/13 | For the years ended June 30, | ||||||||||||||||||||||
2013 | 2012 | 2011 | 2010 | 2009 | ||||||||||||||||||||
Net asset value, beginning of year | $10.75 | $11.01 | $10.85 | $10.82 | $10.54 | $10.31 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Income from investment operations: | ||||||||||||||||||||||||
Net investment income | 0.10 | 0.20 | 0.24 | 0.26 | 0.28 | 0.31 | ||||||||||||||||||
Net gains/(losses) on securities, both realized and unrealized | (0.04 | ) | (0.26 | ) | 0.16 | 0.03 | 0.28 | 0.23 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total from investment operations | 0.06 | (0.06 | ) | 0.40 | 0.29 | 0.56 | 0.54 | |||||||||||||||||
Less distributions: | ||||||||||||||||||||||||
Distributions from net investment income | (0.10 | ) | (0.20 | ) | (0.24 | ) | (0.26 | ) | (0.28 | ) | (0.31 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net asset value, end of period | $10.71 | $10.75 | $11.01 | $10.85 | $10.82 | $10.54 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total return | 0.53% | (b) | (0.53 | )% | 3.74% | 2.72% | 5.39% | 5.31% | ||||||||||||||||
Net assets, end of period (in thousands) | $10,586 | $11,021 | $12,026 | $9,889 | $10,113 | $9,075 | ||||||||||||||||||
Ratio of net expenses to average net assets (a) | 0.87% | (c) | 0.86% | 0.87% | 0.80% | 0.81% | 0.82% | |||||||||||||||||
Ratio of net investment income to average net assets | 1.81% | (c) | 1.86% | 2.21% | 2.40% | 2.63% | 2.97% | |||||||||||||||||
Portfolio turnover | 4.35% | (c) | 20.56% | 1.86% | 18.32% | 16.16% | 15.00% |
(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 | |||
.00%(c) | 0%(c) | For the six months ended December 31, 2013 | ||
.00% | 0% | For the year ended June 30, 2013 | ||
.00% | 0% | For the year ended June 30, 2012 | ||
.02% | 0% | For the year ended June 30, 2011 | ||
.02% | 0% | For the year ended June 30, 2010 | ||
00% | .04% | For the year ended June 30, 2009 |
(b) | Not annualized |
(c) | Annualized |
The accompanying notes are an integral part of the financial statements.
44
Table of Contents
UNAUDITED |
SCHEDULE OF PORTFOLIO INVESTMENTS
U.S. Government Securities and Agencies — 100% of Net Assets
December 31, 2013
Bond Description | Coupon | Maturity Date | Rating# | Par Value | Fair Value | |||||||||||||
FEDERAL FARM CREDIT | ||||||||||||||||||
59.64% of Net Assets | ||||||||||||||||||
Federal Farm Credit Bank | 5.300 | % | 06/24/2014 | Aaa/AA+*/AAA@ | $ | 1,250,000 | $ | 1,280,765 | ||||||||||
Federal Farm Credit Bank | 5.250 | 10/25/2022 | Aaa/AA+*/AAA@ | 1,500,000 | 1,731,840 | |||||||||||||
Federal Farm Credit Bank | 5.050 | 12/21/2021 | Aaa/AA+*/AAA@ | 370,000 | 420,487 | |||||||||||||
Federal Farm Credit Bank | 5.840 | 07/20/2022 | Aaa/AA+*/AAA@ | 2,650,000 | 3,116,289 | |||||||||||||
Federal Farm Credit Bank | 5.250 | 05/10/2022 | Aaa/AA+*/AAA@ | 2,000,000 | 2,299,404 | |||||||||||||
Federal Farm Credit Bank | 5.130 | 11/28/2022 | Aaa/AA+*/AAA@ | 2,000,000 | 2,269,546 | |||||||||||||
Federal Farm Credit Bank | 2.980 | 08/21/2026 | Aaa/AA+*/AAA@ | 750,000 | 659,608 | |||||||||||||
Federal Farm Credit Bank | 3.000 | 03/18/2026 | Aaa/AA+*/AAA@ | 750,000 | 680,298 | |||||||||||||
|
| |||||||||||||||||
12,458,237 | ||||||||||||||||||
FEDERAL HOME LOAN BANK | ||||||||||||||||||
32.89% of Net Assets | ||||||||||||||||||
Federal Home Loan Bank | 3.250 | 06/09/2023 | Aaa/AA+* | 250,000 | 248,226 | |||||||||||||
Federal Home Loan Bank | 7.000 | 08/15/2014 | Aaa/AA+* | 500,000 | 521,182 | |||||||||||||
Federal Home Loan Bank | 5.370 | 09/09/2024 | Aaa/AA+* | 1,750,000 | 1,994,470 | |||||||||||||
Federal Home Loan Bank | 5.250 | 12/11/2020 | Aaa/AA+* | 985,000 | 1,140,890 | |||||||||||||
Federal Home Loan Bank | 5.000 | 12/10/2021 | Aaa/AA+* | 500,000 | 567,622 | |||||||||||||
Federal Home Loan Bank ** | 5.750 | 06/10/2022 | Aaa/AA+* | 2,000,000 | 2,398,506 | |||||||||||||
|
| |||||||||||||||||
6,870,896 | ||||||||||||||||||
FEDERAL NATIONAL MORTGAGE ASSOCIATION | ||||||||||||||||||
6.23% of Net Assets | ||||||||||||||||||
Federal National Mortgage Association ** | 8.100 | 08/12/2019 | Aaa/AA+*/AAA@ | 1,000,000 | 1,300,610 | |||||||||||||
|
| |||||||||||||||||
FEDERAL HOME LOAN MORTGAGE | ||||||||||||||||||
2.10% of Net Assets | ||||||||||||||||||
Federal Home Loan Mortgage Corporation ** | 2.500 | 11/08/2024 | Aaa/AA+*/AAA@ | 500,000 | 438,335 | |||||||||||||
|
| |||||||||||||||||
Total Investments (cost $21,182,003) (See (a) below for further explanation) 100.86% of Net Assets |
| $ | 21,068,078 | |||||||||||||||
|
| |||||||||||||||||
Other liabilities in excess of assets (.86)% | (178,036 | ) | ||||||||||||||||
|
| |||||||||||||||||
Net Assets 100% | $ | 20,890,042 | ||||||||||||||||
|
|
* | Standard and Poor’s Corporation |
** | Segregated security — see footnote 8 |
@ | 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) | Cost for federal income tax purposes is $23,182,003 and net unrealized depreciation of investments is as follows: |
Unrealized appreciation | $ | 205,391 | ||||
Unrealized depreciation | (319,316 | ) | ||||
|
| |||||
Net unrealized depreciation | $ | (113,925 | ) | |||
|
|
Other Information
The following is a summary of the inputs used, as of December 31, 2013 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.
The Fund held no investments or other financial instruments as of December 31, 2013 whose fair value was determined using Level 3 inputs. There were no transfers in and out of level 1, 2 or 3 during the period ending December 31, 2013.
Valuation Inputs | Government Agencies | Total | ||||||||
Level 1 | Quoted Prices | — | — | |||||||
Level 2 | Other Significant Observable Inputs | 21,068,078 | 21,068,078 | |||||||
Level 3 | Significant Unobservable Inputs | — | — | |||||||
|
| |||||||||
$ | 21,068,078 | |||||||||
|
|
The accompanying notes are an integral part of the financial statements.
45
Table of Contents
INTERMEDIATE GOVERNMENT BOND SERIES
STATEMENT OF ASSETS AND LIABILITIES
December 31, 2013 | UNAUDITED |
ASSETS: | ||||||||
Investments in securities, at fair value (Cost: $23,182,003) |
| $ | 21,068,078 | |||||
Cash | 1,394 | |||||||
Interest receivable | 211,319 | |||||||
|
| |||||||
Total assets | 21,280,791 | |||||||
LIABILITIES: | ||||||||
Payable for: | ||||||||
Distributions to shareholders | 10,826 | |||||||
Note payable | 52,000 | |||||||
Fund shares redeemed | 302,689 | |||||||
Investment advisory fee | 3,684 | |||||||
Transfer agent fee | 5,355 | |||||||
Accrued expenses | 16,195 | |||||||
|
| |||||||
Total liabilities | 390,749 | |||||||
|
| |||||||
NET ASSETS: | ||||||||
Capital | 21,251,330 | |||||||
Net accumulated realized loss on investment transactions |
| (247,363 | ) | |||||
Net unrealized depreciation in value of investments |
| (113,925 | ) | |||||
|
| |||||||
Net assets at value | $ | 20,890,042 | ||||||
|
| |||||||
NET ASSET VALUE, offering price and redemption price per share | $ | 9.82 | ||||||
|
|
STATEMENT OF OPERATIONS
For the six months ended December 31, 2013
Net investment income: | ||||
Interest income | $ | 381,125 | ||
|
| |||
Expenses: | ||||
Investment advisory fee | 22,468 | |||
Transfer agent fee | 17,738 | |||
Custodian expense | 5,141 | |||
Professional fees | 2,514 | |||
Pricing | 3,639 | |||
Trustee fees | 1,344 | |||
Other expenses | 9,844 | |||
|
| |||
Total expenses | 62,688 | |||
Custodian expense reduction | (2 | ) | ||
|
| |||
Net expenses | 62,686 | |||
|
| |||
Net investment income | 318,439 | |||
|
| |||
Realized and unrealized loss on investments: | ||||
Net realized loss | (139,363 | ) | ||
Net change in unrealized appreciation/depreciation | (384,594 | ) | ||
|
| |||
Net realized and unrealized loss on investments | (523,957 | ) | ||
|
| |||
Net decrease in net assets resulting from operations | $ | (205,518 | ) | |
|
|
The accompanying notes are an integral part of the financial statements.
46
Table of Contents
INTERMEDIATE GOVERNMENT BOND SERIES
STATEMENTS OF CHANGES IN NET ASSETS
For the six months ended December 31, 2013 and the year ended June 30, 2013 | UNAUDITED |
Six Months Ended 12/31/2013 | One Year Ended 6/30/2013 | |||||||
Operations: | ||||||||
Net investment income | $ | 318,439 | $ | 713,345 | ||||
Net realized loss on investments | (139,363 | ) | (22,547 | ) | ||||
Net change in unrealized appreciation/depreciation | (384,594 | ) | (1,213,820 | ) | ||||
|
|
|
| |||||
Net decrease in net assets resulting from operations | (205,518 | ) | (523,022 | ) | ||||
Distributions from net investment income | (318,624 | ) | (713,160 | ) | ||||
Net fund share transactions (Note 4) | (1,981,132 | ) | (1,198,761 | ) | ||||
|
|
|
| |||||
Total decrease | (2,505,274 | ) | (2,434,943 | ) | ||||
Net assets: | ||||||||
Beginning of period | 23,395,316 | 25,830,259 | ||||||
|
|
|
| |||||
End of period | $ | 20,890,042 | $ | 23,395,316 | ||||
|
|
|
| |||||
Accumulated net investment income | $ | — | $ | 185 | ||||
|
|
|
|
FINANCIAL HIGHLIGHTS
Selected data for a share outstanding: | Six Months Ended 12/31/2013 | For the years ended June 30, | ||||||||||||||||||||||
2013 | 2012 | 2011 | 2010 | 2009 | ||||||||||||||||||||
Net asset value, beginning of year | $10.05 | $10.58 | $9.96 | $10.24 | $10.05 | $9.93 | ||||||||||||||||||
|
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|
|
|
|
|
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| |||||||||||||
Income from investment operations: | ||||||||||||||||||||||||
Net investment income | 0.14 | 0.30 | 0.34 | 0.35 | 0.44 | 0.46 | ||||||||||||||||||
Net gains/(losses) on securities, both realized and unrealized | (0.23 | ) | (0.53 | ) | 0.62 | (0.28 | ) | 0.19 | 0.12 | |||||||||||||||
|
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|
|
|
|
|
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|
|
|
| |||||||||||||
Total from investment operations | (0.09 | ) | (0.23 | ) | 0.96 | 0.07 | 0.63 | 0.58 | ||||||||||||||||
Less distributions: | ||||||||||||||||||||||||
Distributions from net investment income | (0.14 | ) | (0.30 | ) | (0.34 | ) | (0.35 | ) | (0.44 | ) | (0.46 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net asset value, end of period | $9.82 | $10.05 | $10.58 | $9.96 | $10.24 | $10.05 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total return | (0.88 | )%(b) | (2.34 | )% | 9.72% | 0.71% | 6.38% | 5.99% | ||||||||||||||||
Net assets, end of period (in thousands) | $20,890 | $23,395 | $25,830 | $25,004 | $42,053 | $25,431 | ||||||||||||||||||
Ratio of net expenses to average net assets (a) | 0.56% | (c) | 0.48% | 0.52% | 0.46% | 0.47% | 0.47% | |||||||||||||||||
Ratio of net investment income to average net assets | 2.86% | (c) | 2.77% | 3.25% | 3.48% | 4.30% | 4.62% | |||||||||||||||||
Portfolio turnover | 10.42% | (b) | 16.02% | 8.94% | 72.86% | 56.38% | 30.35% |
(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 | |||||||
.00%(c) | 0% | (c) | For the six months ended December 31, 2013 | |||||
.06%(c) | 0% | (c) | For the year ended June 30, 2013 | |||||
.00% | 0% | For the year ended June 30, 2012 | ||||||
.00% | 0% | For the year ended June 30, 2011 | ||||||
.00% | 0% | For the year ended June 30, 2010 | ||||||
.00 % | .03% | For the year ended June 30, 2009 |
(b) | Not annualized |
(c) | Annualized |
The accompanying notes are an integral part of the financial statements.
47
Table of Contents
UNAUDITED |
SCHEDULE OF PORTFOLIO INVESTMENTS
Taxable Municipal Bonds — 100% of Net Assets
December 31, 2013
Bond Description | Coupon | Maturity Date | Rating# | Par Value | Fair Value | |||||||||||||
PUBLIC FACILITIES REVENUE BONDS | ||||||||||||||||||
35.29% of Net Assets | ||||||||||||||||||
Franklin County OH Convention Facilities Authority Build America | 6.640 | % | 12/01/2042 | Aa2/AA* | $ | 130,000 | $ | 145,610 | ||||||||||
Rhode Island Convention Center | 6.060 | 05/15/2035 | Aa3/AA-*/AA-@ | 70,000 | 69,378 | |||||||||||||
Colorado State Certificates of Participation Build America | 6.450 | 09/15/2039 | Aa2/AA-* | 160,000 | 171,667 | |||||||||||||
Grand Junction CO Certificates of Participation Build America | 7.500 | 12/01/2030 | A+* | 500,000 | 552,620 | |||||||||||||
Grand Junction CO Certificates of Participation Build America | 7.650 | 12/01/2040 | A+* | 50,000 | 54,641 | |||||||||||||
Pennington County SD Certificates of Participation Build America | 7.200 | 06/01/2037 | Aa2 | 750,000 | 827,018 | |||||||||||||
Decatur GA Urban Redevelopment Agency Revenue Build America | 6.920 | 01/01/2038 | Aa2/AA+* | 150,000 | 165,162 | |||||||||||||
Buncombe County NC Limited Obligation Build America | 6.800 | 06/01/2030 | Aa2/AA+* | 250,000 | 287,735 | |||||||||||||
Dallas Convention Center Hotel Development Corporation | 7.088 | 01/01/2042 | A1/A+* | 280,000 | 316,187 | |||||||||||||
Metro Government Nashville & Davidson County TN Sports Authoity | 5.231 | 07/01/2033 | Aa2/AA-* | 100,000 | 100,007 | |||||||||||||
Metropolitan Government Nashville & Davidson County TN Convention Build America | 7.431 | 07/01/2043 | A1/A* | 160,000 | 185,931 | |||||||||||||
Metropolitan Government Nashville and Davidson County TN | 6.731 | 07/01/2043 | Aa2/A* | 125,000 | 138,560 | |||||||||||||
Miami Lakes FL Special Obligation Build America | 7.627 | 12/01/2040 | Aa3/AA@ | 255,000 | 299,694 | |||||||||||||
Sarasota County FL Capital Improvement Revenue Build America | 7.016 | 10/01/2040 | AA+*/AA+@ | 710,000 | 782,960 | |||||||||||||
|
| |||||||||||||||||
4,097,170 | ||||||||||||||||||
MUNICIPAL UTILITY REVENUE BONDS | ||||||||||||||||||
28.17% of Net Assets | ||||||||||||||||||
Sedalia MO Certificates of Participation Build America | 7.300 | 06/01/2035 | AA-* | 500,000 | 521,740 | |||||||||||||
East Bethel MN Build America Utilities | 7.000 | 02/01/2040 | Aa3 | 250,000 | 262,915 | |||||||||||||
Pigeon Forge TN Build America Recovery Zone | 7.125 | 06/01/2040 | AA* | 300,000 | 343,380 | |||||||||||||
Altoona PA Water Authority Sewer Revenue Build America | 7.064 | 12/01/2040 | AA-* | 500,000 | 550,795 | |||||||||||||
Davie FL Water & Sewer Revenue Build America | 6.849 | 10/01/2040 | A1/AA-* | 40,000 | 42,818 | |||||||||||||
FL State Utility Revenue | 6.548 | 10/01/2040 | A2 | 60,000 | 62,983 | |||||||||||||
Heber UT Light & Power Build America | 7.000 | 12/15/2030 | A2/AA-@ | 500,000 | 549,200 | |||||||||||||
Louisville & Jefferson County KY Sewer District Build America | 6.250 | 05/15/2043 | Aa3/AA*/AA-@ | 75,000 | 86,552 | |||||||||||||
Metropolitan Government Nashville & Davidson County TN Recovery Zone | 6.693 | 07/01/2041 | Aa3/AA-* | 200,000 | 241,534 | |||||||||||||
West Knox Utilities District Knox County TN Water and Sewer | 6.900 | 06/01/2040 | AA+* | 400,000 | 445,564 | |||||||||||||
Williamsport PA Municipal Water Authority Build America | 6.100 | 01/01/2040 | A2/AA-* | 60,000 | 59,306 | |||||||||||||
York County VA Sewer Revenue Build America | 6.607 | 06/01/2040 | Aa3 | 100,000 | 103,941 | |||||||||||||
|
| |||||||||||||||||
3,270,728 | ||||||||||||||||||
SCHOOL IMPROVEMENT BONDS | ||||||||||||||||||
14.21% of Net Assets | ||||||||||||||||||
CO State Building Excellent Schools Today Certificates of Participation | 7.017 | 03/15/2031 | Aa2/AA-* | 400,000 | 439,144 | |||||||||||||
Armstrong School District PA Build America | 7.000 | 03/15/2041 | AA-* | 750,000 | 817,035 | |||||||||||||
Jefferson County TN Build America | 6.625 | 06/01/2040 | Aa3/A+* | 250,000 | 286,063 | |||||||||||||
Ashland KY Independent School District Build America | 6.200 | 08/01/2029 | Aa3 | 100,000 | 107,442 | |||||||||||||
|
| |||||||||||||||||
1,649,684 | ||||||||||||||||||
MISCELLANEOUS PUBLIC IMPROVEMENT BONDS | ||||||||||||||||||
12.25% of Net Assets | ||||||||||||||||||
KY State Property & Buildings Build America | 5.921 | 11/01/2030 | Aa3/A+*/A+@ | 250,000 | 266,918 | |||||||||||||
Downtown Smyrna Development Authority GA | 6.900 | 02/01/2035 | Aa2/AA+* | 250,000 | 278,815 | |||||||||||||
Lincoln AL Build America Recovery Zone | 6.800 | 06/01/2040 | AA-* | 500,000 | 540,035 | |||||||||||||
Scottsboro AL Build America | 6.400 | 11/01/2040 | A2/AA-* | 250,000 | 265,718 | |||||||||||||
Utah County UT Excise Tax Revenue | 7.130 | 12/01/2039 | AA-* | 65,000 | 70,182 | |||||||||||||
|
| |||||||||||||||||
1,421,668 | ||||||||||||||||||
UNIVERSITY CONSOLIDATED EDUCATION AND BUILDING REVENUE BONDS | ||||||||||||||||||
2.83% of Net Assets | ||||||||||||||||||
Maine Health and Higher Education Facilities Authority | 6.667 | 07/01/2039 | Aa2 | 200,000 | 210,462 | |||||||||||||
Mesa State College CO Auxiliary Facilities Build America | 6.746 | 05/15/2042 | Aa2/AA-* | 100,000 | 118,361 | |||||||||||||
|
| |||||||||||||||||
328,823 | ||||||||||||||||||
TURNPIKES/TOLLROAD/HIGHWAY BONDS | ||||||||||||||||||
2.79% of Net Assets | ||||||||||||||||||
FL State Turnpike Authority Turnpike Revenue Build America | 6.800 | 07/01/2039 | Aa3/AA-*/AA-@ | 300,000 | 323,598 | |||||||||||||
|
|
The accompanying notes are an integral part of the financial statements.
48
Table of Contents
DUPREE MUTUAL FUNDS — TAXABLE MUNICIPAL BOND SERIES | UNAUDITED |
SCHEDULE OF PORTFOLIO INVESTMENTS
Taxable Municipal Bonds — 100% of Net Assets
December 31, 2013
Bond Description | Coupon | Maturity Date | Rating# | Par Value | Fair Value | |||||||||||||
HOSPITAL AND HEALTHCARE | ||||||||||||||||||
2.36% of Net Assets | ||||||||||||||||||
University NC Chapel Hill Hospital Revenue Build America | 6.329 | % | 02/01/2031 | Aa3/AA* | $ | 250,000 | $ | 273,810 | ||||||||||
|
| |||||||||||||||||
Total Investments (cost $10,690,041) (See (a) below for further explanation) 97.90% of Net Assets |
| $ | 11,365,481 | |||||||||||||||
|
| |||||||||||||||||
Other assets in excess of liabilities 2.10% |
| 243,830 | ||||||||||||||||
|
| |||||||||||||||||
Net Assets 100% | $ | 11,609,311 | ||||||||||||||||
|
|
* | Standard and Poor’s Corporation |
@ | Fitch’s Investors Service |
(All other ratings by Moody’s Investors Service, Inc.) |
NR | Not Rated |
# | Bond ratings are unaudited and not covered by Report of Independent Registered Public Accounting Firm. |
(a) | Cost for federal income tax purposes is $10,690,041 and net unrealized appreciation of investments is as follows: |
Unrealized appreciation | $ | 800,656 | ||||
Unrealized depreciation | (125,216 | ) | ||||
|
| |||||
Net unrealized appreciation | $ | 675,440 | ||||
|
|
The following is a summary of the inputs used, as of December 31, 2013 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.
The Fund held no investments or other financial instruments as of December 31, 2013 whose fair value was determined using Level 3 inputs. There were no transfers in and out of level 1, 2 or 3 during the period ending December 31, 2013.
Valuation Inputs | Taxable Municipal Bonds | |||||
Level 1 | Quoted Prices | $ | — | |||
Level 2 | Other Significant Observable Inputs | 11,365,481 | ||||
Level 3 | Significant Unobservable Inputs | — | ||||
|
| |||||
$ | 11,365,481 | |||||
|
|
The accompanying notes are an integral part of the financial statements.
49
Table of Contents
TAXABLE MUNICIPAL BOND SERIES
STATEMENT OF ASSETS AND LIABILITIES
December 31, 2013 | UNAUDITED |
ASSETS: | ||||||||
Investments in securities, at fair value (Cost: $10,690,041) | $ | 11,365,481 | ||||||
Cash | 139,081 | |||||||
Interest receivable | 153,417 | |||||||
Prepaid expenses | 530 | |||||||
|
| |||||||
Total assets | 11,658,509 | |||||||
LIABILITIES: | ||||||||
Payable for: | ||||||||
Distributions to shareholders | 41,892 | |||||||
Investment advisory fee | 4,943 | |||||||
Transfer agent fee | 1,431 | |||||||
Trustees fees | 932 | |||||||
|
| |||||||
Total liabilities | 49,198 | |||||||
|
| |||||||
NET ASSETS: | ||||||||
Capital | 10,973,553 | |||||||
Net accumulated realized loss on investment transactions | (39,682 | ) | ||||||
Net unrealized appreciation in value of investments | 675,440 | |||||||
|
| |||||||
Net assets at value | $ | 11,609,311 | ||||||
|
| |||||||
NET ASSET VALUE, offering price and redemption price per share | $ | 10.09 | ||||||
|
|
STATEMENT OF OPERATIONS
For the six months ended December 31, 2013
Net investment income: | ||||
Interest income | $ | 432,555 | ||
|
| |||
Expenses: | ||||
Investment advisory fee | 37,223 | |||
Transfer agent fee | 11,278 | |||
Custodian expense | 3,759 | |||
Professional fees | 2,759 | |||
Trustee fees | 932 | |||
Pricing | 4,285 | |||
Other expenses | 4,948 | |||
|
| |||
Total expenses | 65,184 | |||
Custodian expense reduction | (1 | ) | ||
|
| |||
Net expenses | 65,183 | |||
|
| |||
Net investment income | 367,372 | |||
|
| |||
Realized and unrealized loss on investments: | ||||
Net realized loss | (39,682 | ) | ||
Net change in unrealized appreciation/depreciation | (402,496 | ) | ||
|
| |||
Net realized and unrealized loss on investments | (442,178 | ) | ||
|
| |||
Net decrease in net assets resulting from operations | $ | (74,806 | ) | |
|
|
The accompanying notes are an integral part of the financial statements.
50
Table of Contents
TAXABLE MUNICIPAL BOND SERIES
STATEMENT OF CHANGES IN NET ASSETS
For the six months ended December 31, 2013 and the year ended June 30, 2013 | UNAUDITED |
Six Months Ended 12/31/2013 | One Year Ended 6/30/2013 | |||||||
Operations: | ||||||||
Net investment income | $ | 367,372 | $ | 767,597 | ||||
Net realized gain/(loss) on investments | (39,682 | ) | 110,538 | |||||
Net change in unrealized appreciation/depreciation | (402,496 | ) | (655,652 | ) | ||||
|
|
|
| |||||
Net increase/decrease in net assets resulting from operations | (74,806 | ) | 222,483 | |||||
Distributions from net investment income | (367,902 | ) | (767,284 | ) | ||||
Distributions from capital gains | (69,960 | ) | (19,468 | ) | ||||
Net fund share transactions (Note 4) | (3,884,309 | ) | 528,225 | |||||
|
|
|
| |||||
Total decrease | (4,396,977 | ) | (36,044 | ) | ||||
Net assets: | ||||||||
Beginning of period | 16,006,288 | 16,042,332 | ||||||
|
|
|
| |||||
End of period | $ | 11,609,311 | $ | 16,006,288 | ||||
|
|
|
| |||||
Accumulated net investment income | $ | — | $ | 530 | ||||
|
|
|
|
FINANCIAL HIGHLIGHTS
Selected data for a share outstanding: | Six months Ended 12/31/13 | For the year ended June 30, | For the period ended June 30, 2011* | |||||||||||||
2013 | 2012 | |||||||||||||||
Net asset value, beginning of period | $ | 10.45 | $ | 10.82 | $ | 9.65 | $ | 10.00 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Income from investment operations: | ||||||||||||||||
Net investment income | 0.26 | 0.51 | 0.52 | 0.34 | ||||||||||||
Net gains/(losses) on securities, both realized and unrealized | (0.30 | ) | (0.36 | ) | 1.17 | (0.35 | ) | |||||||||
|
|
|
|
|
|
|
| |||||||||
Total from investment operations | (0.04 | ) | 0.15 | 1.69 | (0.01 | ) | ||||||||||
Less distributions: | ||||||||||||||||
Distributions from net investment income | (0.26 | ) | (0.51 | ) | (0.52 | ) | (0.34 | ) | ||||||||
Distributions from capital gains | (0.06 | ) | (0.01 | ) | — | — | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Total distributions | (0.32 | ) | (0.52 | ) | (0.52 | ) | (0.34 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net asset value, end of period | $ | 10.09 | $ | 10.45 | $ | 10.82 | $ | 9.65 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Total return | (0.41 | )%(b) | 1.35% | 17.77% | 0.04% | (b) | ||||||||||
Net assets, end of period (in thousands) | $ | 11,609 | $ | 16,006 | $ | 16,042 | $ | 10,872 | ||||||||
Ratio of net expenses to average net assets (a) | 0.88% | (c) | 0.83% | 0.85% | 0.49% | (c) | ||||||||||
Ratio of net investment income to average net assets | 4.99% | (c) | 4.71% | 4.95% | 3.71% | (c) | ||||||||||
Portfolio turnover | 4.20% | (b) | 9.57% | 0.00% | 89.93% | (b) |
(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 | |||||||
.00% | .00% | For the six months ended December 30, 2013 | ||||||
.00% | .00% | For the year ended June 30, 2013 | ||||||
.01% | .00% | For the year ended June 30, 2012 | ||||||
.01%(c) | .00% | (c) | For the period ended June 30, 2011* |
* | Represents the period from commencement of operations (November 1, 2010) through June 30, 2011. |
(b) | Not annualized |
(c) | Annualized |
The accompanying notes are an integral part of the financial statements.
51
Table of Contents
DUPREE MUTUAL FUNDS | UNAUDITED |
December 31, 2013
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.
A. | Security Valuation |
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 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. |
52
Table of Contents
DUPREE MUTUAL FUNDS | UNAUDITED |
NOTES TO FINANCIAL STATEMENTS
December 31, 2013
1. | Organization and Significant Accounting Policies, continued |
Level 3: | Prices 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 no 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 December 31, 2013, for the Funds’ investments is included at the end of the Funds’ Schedules of Portfolio Investments. The Funds recognize transfers at the end of the reporting period. There were no transfers in and out of level 1, 2 or 3 during the year ending December 31, 2013.
B. | Security Transactions |
Security transactions are accounted for on a trade date basis. Gains and losses on securities sold are determined on an identified cost basis.
C. | Security Income |
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 into this type of transaction, they are required to segregate cash or other liquid assets equal to the value of the securities purchased.
E. | Federal Income Taxes |
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 December 31, 2013. 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.
F. | Distributions |
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 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 |
53
Table of Contents
DUPREE MUTUAL FUNDS | UNAUDITED |
NOTES TO FINANCIAL STATEMENTS
December 31, 2013
1. | Organization and Significant Accounting Policies, continued |
G. | Estimates |
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.
H. | Subsequent Events |
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; .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.
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 six months ended December 31, 2013, fees voluntarily waived by the Adviser were as follows:
Fees waived by Adviser | ||||
Alabama Tax-Free Income Series | $ | 9,752 | ||
Mississippi Tax-Free Income Series | 9,773 |
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 period ended December 31, 2013, 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 | $ | 257,923 | $ | 2,977,685 | ||||
Kentucky Tax-Free Income Series | 57,570,121 | 69,595,987 | ||||||
Kentucky Tax-Free Short-to-Medium Series | 1,144,370 | 2,469,485 | ||||||
Mississippi Tax-Free Income Series | 875,502 | 154,056 | ||||||
North Carolina Tax-Free Income Series | 1,870,957 | 7,436,459 | ||||||
North Carolina Tax-Free Short-to-Medium Series | 907,359 | 938,637 | ||||||
Tennessee Tax-Free Income Series | 8,456,168 | 12,984,459 | ||||||
Tennessee Tax-Free Short-to-Medium Series | 462,567 | 794,069 | ||||||
Intermediate Government Bond Series | 2,293,533 | 3,159,342 | ||||||
Taxable Municipal Bond Series | 603,449 | 4,263,581 |
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DUPREE MUTUAL FUNDS | UNAUDITED |
NOTES TO FINANCIAL STATEMENTS
December 31, 2013
4. | Capital Shares |
At December 31, 2013 and June 30, 2013, there were an unlimited number of shares of beneficial interest authorized. Transactions in capital shares were as follows:
ALABAMA TAX-FREE INCOME SERIES | Six Months Ended December 31, 2013 | Year Ended June 30, 2013 | ||||||||||||||
SHARES | AMOUNT | SHARES | AMOUNT | |||||||||||||
Shares sold | 47,761 | $ | 569,679 | 382,317 | $ | 4,839,667 | ||||||||||
Shares reinvested | 18,240 | 217,627 | 33,429 | 417,792 | ||||||||||||
Shares redeemed | (326,342 | ) | (3,886,538 | ) | (254,710 | ) | (3,194,533 | ) | ||||||||
Net increase/(decrease) | (260,341 | ) | $ | (3,099,232 | ) | 161,036 | $ | 2,062,926 | ||||||||
KENTUCKY TAX-FREE INCOME SERIES | Six Months Ended December 31, 2013 | Year Ended June 30, 2013 | ||||||||||||||
SHARES | AMOUNT | SHARES | AMOUNT | |||||||||||||
Shares sold | 7,989,060 | $ | 61,293,016 | 12,157,634 | $ | 98,006,608 | ||||||||||
Shares reinvested | 1,319,878 | 10,139,597 | 2,362,521 | 18,873,478 | ||||||||||||
Shares redeemed | (9,650,835 | ) | (74,010,812 | ) | (15,844,621 | ) | (127,179,843 | ) | ||||||||
Net decrease | (341,897 | ) | $ | (2,578,199 | ) | (1,324,466 | ) | $ | (10,299,757 | ) | ||||||
KENTUCKY TAX-FREE SHORT-TO-MEDIUM SERIES | Six Months Ended December 31, 2013 | Year Ended June 30, 2013 | ||||||||||||||
SHARES | AMOUNT | SHARES | AMOUNT | |||||||||||||
Shares sold | 1,203,266 | $ | 6,528,497 | 4,306,089 | $ | 23,875,791 | ||||||||||
Shares reinvested | 119,014 | 646,470 | 241,397 | 1,337,982 | ||||||||||||
Shares redeemed | (2,629,301 | ) | (14,270,301 | ) | (4,245,020 | ) | (23,528,134 | ) | ||||||||
Net increase/(decrease) | (1,307,021 | ) | $ | (7,095,170 | ) | 302,466 | $ | 1,685,639 | ||||||||
MISSISSIPPI TAX-FREE INCOME SERIES | Six Months Ended December 31, 2013 | Year Ended June 30, 2013 | ||||||||||||||
SHARES | AMOUNT | SHARES | AMOUNT | |||||||||||||
Shares sold | 90,360 | $ | 1,034,134 | 162,331 | $ | 1,982,073 | ||||||||||
Shares reinvested | 5,028 | 57,770 | 10,255 | 123,882 | ||||||||||||
Shares redeemed | (35,955 | ) | (413,337 | ) | (101,079 | ) | (1,221,918 | ) | ||||||||
Net increase | 59,433 | $ | 678,567 | 71,507 | $ | 884,037 | ||||||||||
NORTH CAROLINA TAX-FREE INCOME SERIES | Six Months Ended December 31, 2013 | Year Ended June 30, 2013 | ||||||||||||||
SHARES | AMOUNT | SHARES | AMOUNT | |||||||||||||
Shares sold | 499,337 | $ | 5,557,515 | 1,987,555 | $ | 23,519,667 | ||||||||||
Shares reinvested | 94,326 | 1,051,516 | 183,206 | 2,145,758 | ||||||||||||
Shares redeemed | (1,158,760 | ) | (12,902,090 | ) | (1,378,402 | ) | (16,191,347 | ) | ||||||||
Net increase/(decrease) | (565,097 | ) | $ | (6,293,059 | ) | 792,359 | $ | 9,474,078 |
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NOTES TO FINANCIAL STATEMENTS
December 31, 2013
4. | Capital Shares, continued |
NORTH CAROLINA TAX-FREE SHORT-TO-MEDIUM SERIES | Six Months ended December 31, 2013 | Year Ended June 30, 2013 | ||||||||||||||
SHARES | AMOUNT | SHARES | AMOUNT | |||||||||||||
Shares sold | 160,506 | $ | 1,766,119 | 701,612 | $ | 7,898,764 | ||||||||||
Shares reinvested | 19,801 | 217,915 | 36,890 | 414,632 | ||||||||||||
Shares redeemed | (200,714 | ) | (2,206,580 | ) | (547,748 | ) | (6,150,215 | ) | ||||||||
Net increase/(decrease) | (20,407 | ) | $ | (222,546 | ) | 190,754 | $ | 2,163,181 | ||||||||
TENNESSEE TAX-FREE INCOME SERIES | Six Months Ended December 31, 2013 | Year Ended June 30, 2013 | ||||||||||||||
SHARES | AMOUNT | SHARES | AMOUNT | |||||||||||||
Shares sold | 568,463 | $ | 6,338,147 | 1,604,096 | $ | 18,817,879 | ||||||||||
Shares reinvested | 94,526 | 1,055,766 | 164,725 | 1,914,381 | ||||||||||||
Shares redeemed | (1,093,553 | ) | (12,139,232 | ) | (1,095,123 | ) | (12,806,030 | ) | ||||||||
Net increase/(decrease) | (430,563 | ) | $ | (4,745,319 | ) | 673,698 | $ | 7,926,230 | ||||||||
TENNESSEE TAX-FREE SHORT-TO-MEDIUM SERIES | Six Months Ended December 31, 2013 | Year Ended June 30, 2013 | ||||||||||||||
SHARES | AMOUNT | SHARES | AMOUNT | |||||||||||||
Shares sold | 109,960 | $ | 1,176,145 | 177,861 | $ | 1,960,274 | ||||||||||
Shares reinvested | 7,132 | 76,608 | 13,852 | 152,444 | ||||||||||||
Shares redeemed | (153,498 | ) | (1,647,960 | ) | (259,066 | ) | (2,852,117 | ) | ||||||||
Net decrease | (36,406 | ) | $ | (395,207 | ) | (67,353 | ) | $ | (739,399 | ) | ||||||
INTERMEDIATE GOVERNMENT BOND SERIES | Six Months Ended December 31, 2013 | Year Ended June 30, 2013 | ||||||||||||||
SHARES | AMOUNT | SHARES | AMOUNT | |||||||||||||
Shares sold | 58,008 | $ | 577,023 | 101,835 | $ | 1,086,915 | ||||||||||
Shares reinvested | 25,053 | 248,799 | 51,219 | 544,743 | ||||||||||||
Shares redeemed | (283,589 | ) | (2,806,954 | ) | (266,971 | ) | (2,830,419 | ) | ||||||||
Net decrease | (200,528 | ) | $ | (1,981,132 | ) | (113,917 | ) | $ | (1,198,761 | ) | ||||||
TAXABLE MUNICIPAL BOND SERIES | Six Months Ended December 31, 2013 | Year Ended June 30, 2013 | ||||||||||||||
SHARES | AMOUNT | SHARES | AMOUNT | |||||||||||||
Shares sold | 32,743 | $ | 333,850 | 223,183 | $ | 2,421,068 | ||||||||||
Shares reinvested | 21,856 | 223,232 | 31,550 | 343,461 | ||||||||||||
Shares redeemed | (435,247 | ) | (4,441,391 | ) | (205,941 | ) | (2,236,304 | ) | ||||||||
Net increase/(decrease) | (380,648 | ) | $ | (3,884,309 | ) | 48,792 | $ | 528,225 |
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
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NOTES TO FINANCIAL STATEMENTS
December 31, 2013
5. | Concentration of Credit Risk, continued |
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.
6. | Federal Income Taxes |
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.
At June 30, 2013, the Funds capital loss carry-forwards expire as follows:
2014 | 2015 | 2016 | 2017 | 2018 | 2019 | Total | ||||||||||||||||||||||
Kentucky Tax-Free Short-to-Medium Series | $ | — | $ | 345,116 | $ | 227,932 | $ | 223,976 | $ | — | $ | — | $ | 797,024 | ||||||||||||||
Tennessee Tax-Free Income Series | — | — | — | — | 371,142 | — | 371,142 | |||||||||||||||||||||
Tennessee Tax-Free Short-to-Medium Series | — | 26,184 | 23,418 | — | — | — | 49,602 | |||||||||||||||||||||
Intermediate Government Bond Series | 51,194 | 21,143 | — | — | — | — | 72,337 |
During the year ended June 30, 2013, the following Funds utilized capital loss carry-forwards as follows:
Amount | ||||
Kentucky Tax-Free Short-to-Medium Series | $ | 145,079 | ||
Tennessee Tax-Free Income Series | 250,195 | |||
Tennessee Tax-Free Short-to-Medium Series | 46,104 | |||
Intermediate Government Bond Series | 13,115 | |||
Taxable Municipal Bond Series | 21,110 |
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 2013 as follows:
Post October Losses | ||||
Tennessee Tax-Free Income Series | $ | (49,421 | ) | |
Intermediate Government Bond Series | (35,662 | ) |
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NOTES TO FINANCIAL STATEMENTS
December 31, 2013
6. | Federal Income Taxes, continued |
The tax character of distributions paid for the years ended June 30, 2013 and 2012 were as follows:
2013 | 2012 | |||||||||||||||||||||||
Tax Exempt Income | Ordinary Income | Long-Term Capital Gain | Tax Exempt Income | Ordinary Income | Long-Term Capital Gain | |||||||||||||||||||
Alabama Tax-Free Income Series | $ | 842,439 | $ | — | $ | 16,538 | $ | 781,226 | $ | — | $ | 12,037 | ||||||||||||
Kentucky Tax-Free Income Series | 33,471,869 | 37,796 | 108,545 | 34,105,207 | 58,958 | 3,685,303 | ||||||||||||||||||
Kentucky Tax-Free | 1,932,832 | — | — | 1,911,427 | — | — | ||||||||||||||||||
Mississippi Tax-Free Income Series | 287,105 | — | — | 235,664 | — | 16,068 | ||||||||||||||||||
North Carolina Tax-Free Income Series | 3,026,417 | — | 131,685 | 2,780,923 | — | — | ||||||||||||||||||
North Carolina Tax-Free | 497,853 | — | 39,121 | 495,128 | — | — | ||||||||||||||||||
Tennessee Tax-Free Income Series | 3,364,193 | — | — | 3,364,028 | — | — | ||||||||||||||||||
Tennessee Tax-Free | 226,505 | — | — | 230,540 | — | — | ||||||||||||||||||
Intermediate Government Bond Series | — | 713,160 | — | — | 837,279 | — | ||||||||||||||||||
Taxable Municipal Bond Series | — | 767,284 | 19,468 | — | 696,663 | — |
At June 30, 2013, 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 | $ | — | $ | 116,420 | $ | 29,276 | $ | 654,807 | ||||||||
Kentucky Tax-Free Income | — | 3,713,889 | 315,193 | 38,275,895 | ||||||||||||
Kentucky Tax-Free Short-to-Medium | — | 58,073 | — | 3,057,471 | ||||||||||||
Mississippi Tax-Free Income | — | 39,983 | 9,925 | 131,517 | ||||||||||||
North Carolina Tax-Free Income | — | 278,725 | 112,821 | 2,777,703 | ||||||||||||
North Carolina Tax-Free Short-to-Medium | — | 11,966 | 40,875 | 585,103 | ||||||||||||
Tennessee Tax-Free Income | — | 378,775 | — | 2,590,708 | ||||||||||||
Tennessee Tax-Free Short-to-Medium | — | 5,685 | — | (14,721 | ) | |||||||||||
Intermediate Government Bond | 15,268 | — | — | 270,669 | ||||||||||||
Taxable Municipal Bond Series | 38,233 | — | 69,960 | 1,077,936 |
Accumulated Capital and | Other Temporary Differences | Total Earnings | ||||||||||
Alabama Tax-Free Income | $ | — | $ | (116,423 | ) | $ | 684,080 | |||||
Kentucky Tax-Free Income | — | (3,713,889 | ) | 38,591,088 | ||||||||
Kentucky Tax-Free Short-to-Medium | (797,024 | ) | (58,074 | ) | 2,260,446 | |||||||
Mississippi Tax-Free Income | — | (40,054 | ) | 141,371 | ||||||||
North Carolina Tax-Free Income | — | (278,725 | ) | 2,390,524 | ||||||||
North Carolina Tax-Free Short-to-Medium | — | (11,964 | ) | 625,980 | ||||||||
Tennessee Tax-Free Income | (420,563 | ) | (378,774 | ) | 2,170,146 | |||||||
Tennessee Tax-Free Short-to-Medium | (49,602 | ) | (5,685 | ) | (64,323 | ) | ||||||
Intermediate Government Bond | (107,999 | ) | (15,084 | ) | 162,854 | |||||||
Taxable Municipal Bond Series | — | (37,703 | ) | 1,148,426 |
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NOTES TO FINANCIAL STATEMENTS
December 31, 2013
7. | Contingencies and Commitments |
The Funds indemnify the Trust’s officers and Trustees for certain liabilities that might arise from the 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 do not expect the risk of loss to be material.
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 August 31, 2014, 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.
At December 31, 2013, the Funds had an unused line of credit amount of $24,738,000. During the six months ended December 31, 2013, 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 | $ | 9,630 | ||
Kentucky Tax Free Income Series | 72,908 | |||
Kentucky Tax-Free Short-to-Medium Series | 39,228 | |||
Mississippi Tax-Free Income Series | — | |||
North Carolina Tax-Free Income Series | 47,315 | |||
North Carolina Tax-Free Short-to-Medium Series | 3,603 | |||
Tennessee Tax-Free Income Series | 44,103 | |||
Tennessee Tax-Free Short-to-Medium Series | 6,212 | |||
Taxable Municipal Bond Series | 3,011 | |||
Intermediate Government Bond Series | 1,326 |
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 six months ended December 31, 2013, these credits reduced each of Funds’ expenses by the amount shown on the Statement of Operation as “Custodian expense reduction.”
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December 31, 2013
Trustee and officer information
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 During Past Five Years in Publicly Traded Companies | |||||
Officers | ||||||||||
Thomas P. Dupree, Sr. 125 South Mill Street Lexington, KY 40507 Age: 83 | President of Dupree Mutual Funds Elected President by Trustees | One Year Term; 34 Years of Service | Chairman, Dupree & Company, Inc. (broker/dealer/investment adviser) | N/A | N/A | |||||
Allen E. Grimes, III 125 South Mill Street Lexington, KY 40507 Age: 51 | Executive Vice President; elected Executive Vice President by Trustees | One Year Term; 8 Years of Service | President, Dupree & Company, Inc. (broker/dealer/investment adviser); | N/A | N/A | |||||
Michelle M. Dragoo 125 South Mill Street Lexington, KY 40507 Age: 52 | Vice President, Secretary, Treasurer; elected Vice President, Secretary & Treasurer by Trustees | One Year Term; 16 Years of Service as Vice President, 14 Years of Service as Secretary, Treasurer | Vice President, Secretary, Treasurer of Dupree & Company, Inc. (broker/dealer/investment adviser) | N/A | N/A | |||||
Eugene M. Gard 125 South Mill Street Lexington, KY 40507 Age: 34 | Assistant Secretary, Assistant Treasurer; elected Assistant Secretary & Assistant Treasurer by Trustees | One Year Term, first year of service | Dupree & Company, Inc. (broker/dealer/investment adviser) | N/A | N/A | |||||
Gay M. Elste P.O. Box 28 Versailles, KY 40383 Age: 62 | Compliance Officer; elected by Trustees | One Year Term; 9 Years of Service 32 Years of Service as legal counsel to Trust | Attorney at Law, Darsie & Elste; Anstruther Farm (cattle farming) | N/A | N/A | |||||
Trustees: | ||||||||||
William A. Combs, Jr. 111 Woodland Ave, #510 Lexington, KY 40502 Age: 73 | Chairman of the Board of Trustees and Trustee of Dupree Mutual Funds | One Year Term; 25 Years of Service 13 Years of Service as Chairman | Officer, Director: Mercedes-Benz of Cincinnati, Ohio; Mercedes-Benz of West Chester, Ohio and Ellerslie Corp., Lexington, KY | 10 | N/A | |||||
James C. Baughman, Jr. 1999 Richmond Road Suite 4 Lexington, KY 40502 Age: 50 | Trustee and Chairman of Audit Committee of Dupree Mutual Funds | One Year Term; 6 Years of Service 3 Years of Service as Chairman of Audit Committee | Chief Executive Officer, Secretary, Treasurer, Director Office Suites Plus, Inc. (1992-2013)(executive office space rental) Business Consultant, CJN Advisors, LLC (2013 – present) | 10 | Advisory Board, Community Trust Bank, Lexington, KY | |||||
C. Timothy Cone 201 West Short Street Lexington, KY 40507 Age: 69 | Trustee of Dupree Mutual Funds | One Year Term; 11 Years of Service 2 Years of Service as Chairman of Nominating committee | President, Gess, Mattingly & Atchison, P.S.C. (law firm) | 10 | N/A | |||||
Ann Rosenstein Giles 343 Waller Avenue, Suite 100 Lexington, KY 40504 Age: 61 | Trustee of Dupree Mutual Funds | One Year Term; 2 Years of Service | Rosenstein Development, LLC (self-employed marketing consultant) | 10 | N/A | |||||
Marc A. Mathews, CPA, CTP 2104 Lakeside Drive Lexington, KY 40502 Age: 55 | Trustee of Dupree Mutual Funds | One Year Term 2 Years of Service | Vice President for Finance and Business, Transylvania University, 2009 to present; Treasurer, University of Kentucky 2008-2009; Controller, University of Kentucky 2004-2008 | 10 | Director, Bank of the Bluegrass, Lexington, KY |
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OTHER UNAUDITED INFORMATION
December 31, 2013
Trustee and officer information, continued:
The following table sets forth information as to the Trustees and officers:
As of December 31, 2013, 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, 2013, 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.
Board of Trustees Approval of Existing Advisory Agreements
Dupree Mutual Fund’s Board of Trustees is responsible for overseeing the Trust’s corporate policies and adhering to fiduciary standards under the Investment Company Act of 1940 (“1940 Act”). The Trustees are responsible for the annual renewal of the Trust’s investment advisory agreements with each Fund. Under the Investment Advisory Agreements, Dupree & Company, Inc. assumes responsibility for providing investment advisory and other services.
In considering whether to renew the Investment Advisory Agreements for the tax-free municipal bond Series, the Intermediate Government Bond Series and the Taxable Municipal Bond Series for additional one year periods, the Trustees, at their August 27, 2013 meeting, reviewed the following factors with respect to each Series: (1) the nature, extent and quality of services provided by Dupree & Co. to each Series; (2) the investment performance of each Series; (3) the costs of the services provided to each Series and the profits realized or to be realized by Dupree & Co. from its relationship with the Trust; (4) the extent to which economies of scale have been realized as each Series grows; (5) whether the level of fees reflects those economies of scale for the benefit of investors in the Series; (6) comparisons of services and fees with contracts entered into by Dupree & Co. with other clients; and (7) other benefits derived or anticipated to be derived by Dupree & Co. from its relationship as investment adviser to the Trust.
Set forth below are the general factors the Trustees considered for all of the funds, followed by an outline of the selected specific factors the Trustees considered for each particular fund.
Nature, Extent and Quality of Services
Pursuant to each agreement, the Investment Adviser provides investment supervisory services, office space and facilities and corporate administration. Specifically, the Investment Adviser obtains and evaluates relevant information regarding the economy, industries, businesses, municipal issuers, securities markets and securities to formulate a continuing program for the management of each Series’ assets in a manner consistent with the series’ investment objectives and to implement this program by selecting the securities to be purchased or sold by the Series and placing orders for such purchases and sales. In addition, the Investment Adviser provides for the Series’ office needs, maintains each Series’ books and records, assumes and pays all sales and promotional expenses incurred in the distribution of each Series’ shares, staffs the Series with persons competent to perform all of its executive and administrative functions, supervises and coordinates the activities of the Trust’s institutional and other agents (e.g. custodian, transfer agent, independent accountants, independent legal counsel), and permits its officers and employees to serve as officers of the Trust, all without additional cost to the Trust.
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December 31, 2013
Board of Trustees Approval of Existing Advisory Agreements, continued:
Dupree & Company provides accounting services for all portfolio holdings, prepares required reports to shareholders, and prepares necessary SEC filings on a timely basis. Dupree & Company does not render services to any other clients.
The Trustees considered that the Investment Adviser is an experienced investment adviser whose investment professionals have managed the several Series of the Trust since their inception. The Investment Adviser’s personnel provide active and extensive monitoring of the investment portfolios daily and report on the investment performance of the Series to the Trustees at their scheduled quarterly meetings. The Trustees considered that the Investment Adviser has carried out these responsibilities in a professional manner over the years.
The Trustees considered, among other things, the performance of each of the Series, as discussed below.
Performance
The Trustees considered the performance of each Series during historical and recent periods and compared to (i) standardized industry performance data, (ii) the performance of comparable mutual funds and (iii) the performance of recognized indices.
The Trustees considered the comparative performance and expense data for each Series prepared by an independent third party, Morningstar®, Inc., annualized for 1, 3, 5 and 10 years as compared with other single state funds or government bond funds. Morningstar®, Inc. comparative performance and expense data was considered for a one year period and since inception for the Taxable Municipal Bond Series since it has been in existence only since November 1, 2010. For the most part, the Series’ returns over the periods reviewed have been very close to the Series’ benchmarks. For additional detail about the considerations for each Trust Series, see the “Series-by-Series Factors” section below.
Cost and Profitability
The Trustees reviewed the audited (years ended December 31, 2011 and December 31, 2012) and unaudited financial statements (six months ended June 30, 2013) of Dupree & Company, Inc; statements of Dupree & Company Inc.’s revenues and costs of and profits from furnishing services to each Series (twelve months ended June 30, 2013). The Investment Adviser’s revenues and costs of and profits from furnishing services to each Series are allocated to each Series according to each Series’ identifiable costs and according to the size of the Series in relation to the total size of the Trust. The Trustees considered the Investment advisory fees paid to the Investment Adviser, expressed in dollar terms and as a percentage of assets under management. The Trustees considered and reviewed information concerning the costs incurred and profits derived by Dupree & Co. for services rendered in its capacity as Investment Adviser to each Series since the inception of each Series. The Trustees determined that the profits earned were reasonable in light of the advisory, administrative and other services provided to each Series and the historic subsidization provided by Dupree & Co. to the several Series.
Fees Charged by Other Advisers
The Trustees considered information regarding fees paid to other advisers for managing similar investment portfolios. The Trustees received comparative fee information for comparable peer group funds prepared by Morningstar®, Inc. The Trustees considered that the proposed advisory fees to be paid to the Investment Adviser for its services to each Series are comparable to the advisory fees charged to other similar portfolios.
Economies of Scale
In addition to considering that the Investment Adviser’s fees are comparable to fees charged to other similar portfolios, the Trustees also considered that economies of scale are integrated into the expense formulation. Accordingly, as assets increase, the Investment Adviser’s fees decrease on a percentage basis.
The Investment Adviser has identified no “economies of scale”, advising that growth of the Trust will require additional personnel. Further, the Investment Adviser has stated that additional compliance requirements can be expected to consume more personnel time and may preclude realization of economies of scale.
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DUPREE MUTUAL FUNDS | UNAUDITED |
OTHER UNAUDITED INFORMATION
December 31, 2013
Board of Trustees Approval of Existing Advisory Agreements, continued:
Fee Comparison with Other Clients
The only client served by the Investment Adviser is the Trust, so there are no applicable fee comparisons.
Other Benefits
The Trustees considered that the Investment Adviser derives a financial benefit from its advisory relationship with the Trust. The sole benefit that accrues to the Investment Adviser is an increase in total fees received as each Series increases in net asset size. The benefit to the shareholders of each Series is that the Investment Adviser’s fees decrease on a percentage basis as total net assets under management increase. Dupree & Company, Inc. reported no other indirect benefits attributable to management of the Series, including, but not limited to, soft dollar arrangements.
Series-by-Series Factors
Alabama Tax-Free Income Series
Factors considered at meeting of August 27, 2013
• | For the Fiscal Year ending June 30, 2013, the Investment Adviser processed 18 portfolio purchase transactions and 11 portfolio sale transactions. |
• | As of June 30, 2013, the ten year growth of $10,000 invested in the Series was $15,238 as compared to $15,416 for the BarCap Municipal Bond Index. The BarCap Municipal Bond Index reflects no deduction for fees or expenses. |
• | As of June 30, 2013, the Series received an overall Morningstar®, Inc. rating of five stars. |
• | As of June 30, 2013, the Series Expense Ratio was 0.68%, (after waiver of fees), the third lowest of 13 funds evaluated by Morningstar®, Inc. One fund with a lower expense ratio only accepts institutional clients. |
Kentucky Tax-Free Income Series
Factors considered at meeting of August 27, 2013
• | For the Fiscal Year ending June 30, 2013, the Investment Adviser processed 43 portfolio purchase transactions and 51 portfolio sale transactions. |
• | As of June 30, 2013, the ten year growth of $10,000 invested in the Series was $14,941 as compared to $15,416 for the BarCap Municipal Bond Index. The BarCap Municipal Bond Index reflects no deduction for fees or expenses. |
• | As of June 30, 2013, the Series received an overall Morningstar®, Inc. rating of five stars. |
• | As of June 30, 2013, the Series Expense Ratio was 0.57%, the third lowest of 23 funds evaluated by Morningstar®, Inc. One fund with a lower expense ratio only accepts institutional clients. |
Kentucky Tax-Free Short-to-Medium Series
Factors considered at meeting of August 27, 2013
• | For the Fiscal Year ending June 30, 2013, the Investment Adviser processed 20 portfolio purchase transactions and 13 portfolio sale transactions. |
• | As of June 30, 2013, the ten year growth of $10,000 invested in the Series was $13,212 as compared to $15,296 for the BarCap Municipal Bond Index. The Bar Cap Municipal Bond Index reflects no deduction for fees or expenses. |
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DUPREE MUTUAL FUNDS | UNAUDITED |
OTHER UNAUDITED INFORMATION
December 31, 2013
Board of Trustees Approval of Existing Advisory Agreements, continued:
• | As of June 30, 2013, the Series received an overall Morningstar®, Inc. rating of three stars. |
• | As of June 30, 2013, the Series Expense Ratio was 0.73%. Out of 23 funds evaluated by Morningstar®,Inc., only 5 had lower expense ratios than this Series. Of these, several only accept institutional clients and another fund was the Dupree Kentucky Tax-Free Income Series. |
Mississippi Tax-Free Income Series
Factors considered at meeting of August 27, 2013
• | For the Fiscal Year ending June 30, 2013, the Investment Adviser processed 13 portfolio purchase transactions and 16 portfolio sale transactions. |
• | As of June 30, 2013, the ten year growth of $10,000 invested in the Series was $14,756 as compared to $15,416 for the BarCap Municipal Bond Index. The BarCap Municipal Bond Index reflects no deduction for fees and expenses. |
• | As of June 30, 2013, the Series received an overall Morningstar®, Inc. rating of four stars. |
• | As of June 30, 2013, the Series Expense Ratio was 0.65% (after waiver of fees) and was the lower of 7 funds evaluated by Morningstar®, Inc. |
North Carolina Tax-Free Income Series
Factors considered at meeting of August 27, 2013
• | For the Fiscal Year ending June 30, 2013, the Investment Adviser processed 19 portfolio purchase transactions and 7 portfolio sale transactions. |
• | As of June 30, 2013, the ten year growth of $10,000 invested in the Series was $14,771 as compared to $15,416 for the BarCap Municipal Bond Index. The BarCap Municipal Bond Index reflects no deduction for fees and expenses. |
• | As of June 30, 2013, the Series received an overall Morningstar®, Inc. rating of five stars. |
• | As of June 30, 2013, the Series Expense Ratio was 0.71%, the 10th lowest of 40 funds evaluated by Morningstar®, Inc. Other funds with lower expense ratios had larger minimum investments or were limited to institutional investors. |
North Carolina Tax-Free Short-to-Medium Series
Factors considered at meeting of August 27, 2013
• | For the Fiscal Year ending June 30, 2013, the Investment Adviser processed 23 portfolio purchase transactions and 13 portfolio sale transactions. |
• | As of June 30, 2013, the ten year growth of $10,000 invested in the Series was $13,272 as compared to $15,296 for the BarCap Municipal Bond Index. The BarCap Municipal Bond Index reflects no deduction for fees and expenses. |
• | As of June 30, 2013, the Series received an overall Morningstar®, Inc. rating of four stars. |
• | As of June 30, 2013, the Series Expense Ratio was 0.78%, the 15th lowest of 40 funds evaluated by Morningstar®, Inc. Other funds with lower expense ratios had larger minimum investments, were limited to institutional investors and/or were not short-term municipal bond funds. |
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DUPREE MUTUAL FUNDS | UNAUDITED |
OTHER UNAUDITED INFORMATION
December 31, 2013
Board of Trustees Approval of Existing Advisory Agreements, continued:
Tennessee Tax-Free Income Series
Factors considered at meeting of August 27, 2013
• | For the Fiscal Year ending June 30, 2013, the Investment Adviser processed 21 portfolio purchase transactions and 29 portfolio sale transactions. |
• | As of June 30, 2013, the ten year growth of $10,000 invested in the Series was $14,998 as compared to $15,416 for the BarCap Municipal Bond Index. The BarCap Municipal Bond Index reflects no deduction for fees and expenses. |
• | As of June 30, 2013, the Series received an overall Morningstar®, Inc. rating of four stars. |
• | As of June 30, 2013, the Series Expense Ratio was 0.70%, one of the 3 funds tied at 3rd lowest of 17 funds evaluated by Morningstar®, Inc. The funds with the lower expense ratios are open only to institutional clients. |
Tennessee Tax-Free Short-to-Medium Series
Factors considered at meeting of August 27, 2013
• | For the Fiscal Year ending June 30, 2013, the Investment Adviser processed 11 portfolio purchase transactions and 19 portfolio sale transactions. |
• | As of June 30, 2013, the ten year growth of $10,000 invested in the Series was $12,868 as compared to $15,296 for the BarCap Municipal Bond Index. The BarCap Municipal Bond Index reflects no deduction for fees and expenses. |
• | As of June 30, 2013, the Series received an overall Morningstar®, Inc. rating of three stars. |
• | As of June 30, 2013, the Series Expense Ratio was 0.87%, the 10th lowest of 17 funds evaluated by Morningstar®, Inc. Other funds with lower expense ratios had larger minimum investments, were limited to institutional investors and/or were not short-term municipal bond funds. |
Intermediate Government Bond Series
Factors considered at meeting of August 27, 2013
• | For the Fiscal Year ending June 30, 2013, the Investment Adviser processed 4 portfolio purchase transactions and 7 portfolio sale transactions. |
• | As of June 30, 2013, the ten year growth of $10,000 invested in the Series was $14,919 as compared to $14,389 for the BarCap U.S. Government Bond Index. The BarCap U.S. Government Bond Index reflects no deduction for fees and expenses. |
• | As of June 30, 2013, the Series received an overall Morningstar®, Inc. rating of three stars. |
• | As of June 30, 2013, the Series Expense Ratio was 0.52%, the lowest of 27 funds evaluated by Morningstar®, Inc. |
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DUPREE MUTUAL FUNDS | UNAUDITED |
OTHER UNAUDITED INFORMATION
December 31, 2013
Board of Trustees Approval of Existing Advisory Agreements, continued:
Taxable Municipal Bond Series
Factors considered at meeting of August 27, 2013
• | For the Fiscal Year ending June 30, 2013, the Investment Adviser processed 10 portfolio purchase transactions and 5 portfolio sale transactions. |
• | As of June 30, 2013, the thirty-two month growth of $10,000 invested in the Series was $11,942 as compared to $12,312 for the BarCap Taxable Municipal Bond Index. The BarCap Taxable Municipal Bond Index reflects no deduction for fees and expenses. |
• | As of June 30, 2013, the Series was not rated by Morningstar®, Inc because the Series had not been in existence three full years. |
• | As of June 30, 2013, the Series Expense Ratio was 0.85%, the 3rd lowest of 5 funds evaluated by Morningstar®, Inc. |
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DUPREE MUTUAL FUNDS | UNAUDITED |
OTHER UNAUDITED INFORMATION
December 31, 2013
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 December 31, 2013” 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 | Beginning Account Value July 1, 2013* | Ending Account Value December 31, 2013** | Expenses Paid During the Six Months Ended December 31, 2013 | |||||||||||||
Alabama Tax-Free Income Series | ||||||||||||||||
Actual | .73 | % | $ | 1,000.00 | $ | 1,000.76 | $ | 3.69 | ||||||||
Hypothetical | .73 | 1,000.00 | 1,025.21 | 3.74 | ||||||||||||
Kentucky Tax-Free Income Series | ||||||||||||||||
Actual | .58 | 1,000.00 | 1,007.10 | 2.92 | ||||||||||||
Hypothetical | .58 | 1,000.00 | 1,025.21 | 2.94 | ||||||||||||
Kentucky Tax-Free Short-to-Medium Series | ||||||||||||||||
Actual | .74 | 1,000.00 | 1,004.44 | 3.75 | ||||||||||||
Hypothetical | .74 | 1,000.00 | 1,025.21 | 3.76 | ||||||||||||
Mississippi Tax-Free Income Series | ||||||||||||||||
Actual | .69 | 1,000.00 | 997.50 | 3.49 | ||||||||||||
Hypothetical | .69 | 1,000.00 | 1,025.21 | 3.54 | ||||||||||||
North Carolina Tax-Free Income Series | ||||||||||||||||
Actual | .73 | 1,000.00 | 1,000.05 | 3.69 | ||||||||||||
Hypothetical | .73 | 1,000.00 | 1,025.21 | 3.73 | ||||||||||||
North Carolina Tax-Free Short-to-Medium Series | ||||||||||||||||
Actual | .82 | 1,000.00 | 1,003.63 | 4.12 | ||||||||||||
Hypothetical | .82 | 1,000.00 | 1,025.21 | 4.16 | ||||||||||||
Tennessee Tax-Free Income Series | ||||||||||||||||
Actual | .72 | 1,000.00 | 1,002.42 | 3.63 | ||||||||||||
Hypothetical | .72 | 1,000.00 | 1,025.21 | 3.67 |
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DUPREE MUTUAL FUNDS | UNAUDITED |
OTHER UNAUDITED INFORMATION
December 31, 2013
Schedule of Shareholder Expenses, continued
Net Expense Ratio Annualized | Beginning Account Value July 1, 2013* | Ending Account Value December 31, 2013** | Expenses Paid During the Six Months Ended December 31, 2013 | |||||||||||||
Tennessee Tax-Free Short-to-Medium Series | ||||||||||||||||
Actual | .87 | % | $ | 1,000.00 | $ | 1,002.67 | $ | 4.38 | ||||||||
Hypothetical | .87 | 1,000.00 | 1,025.21 | 4.43 | ||||||||||||
Intermediate Government Bond Series | ||||||||||||||||
Actual | .56 | 1,000.00 | 995.56 | 2.83 | ||||||||||||
Hypothetical | .56 | 1,000.00 | 1,025.21 | 2.87 | ||||||||||||
Taxable Municipal Bond Series | ||||||||||||||||
Actual | .88 | 1,000.00 | 997.93 | 4.45 | ||||||||||||
Hypothetical | .88 | 1,000.00 | 1,025.21 | 4.51 |
* | 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 [184/365] (to reflect one-half year period). |
A meeting of Shareholders was held on October 23, 2013. The purpose of the meeting was (i) to elect Messrs.
James C. Baughman, Jr., William Combs, Jr., C. Timothy Cone, Marc A. Mathews, and Ann Rosenstein Giles as Trustees and (ii) to ratify the selection of Ernst & Young LLP as the Trust’s independent auditors for the fiscal year ending June 30, 2014. The results of all matters voted on by shareholders at the Shareholder Meeting held October 23, 2013 were as follows:
A. | Election of Trustees: |
FOR | WITHHELD | TOTAL | ||||||||||
James C. Baughman | 96,339,037.419 | 837,958.307 | 97,176,995.726 | |||||||||
William A. Combs | 98,413,506.149 | 837,958.307 | 99,251,464.456 | |||||||||
C. Timothy Cone | 98,500,562.851 | 837,958.307 | 99,338,521.158 | |||||||||
Ann Rosenstein Giles | 98,224,813.155 | 837,958.307 | 99,062,771.462 | |||||||||
Marc A. Mathews | 98,414,183.177 | 837,958.307 | 99,252,141.484 |
Cumulative voting rights were exercised in the election of Trustees. The total proxy votes are distributed among those individuals selected.
B. | Ratification of Ernst & Young LLP for the fiscal year 2014: |
FOR | AGAINST | ABSTAIN | TOTAL | |||||||||||||
Ernst & Young LLP | 96,804,254.888 | 968,710.555 | 1,043,413.399 | 98,816,378.842 |
C. | Other business: |
FOR | AGAINST | ABSTAIN | TOTAL | |||||||||||||
Other business | 82,242,950.296 | 13,615,014.379 | 2,958,414.167 | 98,816,378.842 |
The Statement of Additional Information (“SAI”) includes additional information about Fund Trustees and is available upon request without charge. Please call (800) 866-0614 to request a free copy of the SAI.
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.
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Item 2. Not applicable.
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 whom 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. Not applicable.
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 February 7, 2014 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 February 7, 2014 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 second fiscal quarter of the period covered by this report that materially affected or is reasonably likely to materially affect the Registrant’s financial statements.
Item 12. Exhibits
(a)
(1) Not applicable
(2) Certifications
(3) Not applicable
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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 | |
Michelle M. Dragoo, | ||
Vice President, Secretary, Treasurer |
Date: February 7, 2014
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. | |
Thomas P. Dupree, Sr., | ||
President |
Date: February 7, 2014
By: | /s/ Michelle M. Dragoo | |
Michelle M. Dragoo, | ||
Vice President, Secretary, Treasurer |
Date: February 7, 2014