U. S.
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-2918
DUPREE MUTUAL FUNDS
(Exact Name of Registrant as Specified in Charter)
125 South Mill Street, Vine Center, Suite 100
Lexington, Kentucky 40507
(Address of Principal Executive Offices) (Zip Code)
Allen E. Grimes, III
125 South Mill Street, Vine Center, Suite 100
Lexington, Kentucky 40507
(Name and address of agent for service)
Registrant’s Telephone Number, including Area Code (859) 254-7741
Date of fiscal year end: June 30, 2020
Date of reporting period: July 1, 2019 through June 30, 2020
Item 1. Report to Stockholders
June 30, 2020
ANNUAL REPORT
TO SHAREHOLDERS
Beginning January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission, paper copies of the fund’s shareholder reports like this one will no longer be sent by mail, unless a request is made specifically to Dupree Mutual Funds or your financial intermediary, such as a broker-dealer or bank. Instead, the reports will be made available on the Dupree Mutual Funds website (www.dupree-funds.com); you will be notified by mail and provided with a website link to access the report each time a report is posted. If you have already elected to receive shareholder reports electronically, you will not be affected by this change and do not need to take any action. If you prefer to receive shareholder reports and other communications electronically, you may update your mailing preferences with your financial intermediary, or enroll in e-delivery at www.dupree-funds.com (for accounts held directly with Dupree).
You may elect to receive paper copies of all future reports free of charge. If you invest through a financial intermediary, you may contact your financial intermediary to request that you continue to receive paper copies of your shareholder reports. If you invest directly with Dupree, you may inform Dupree Mutual Funds that you wish to continue receiving paper copies of your shareholder reports by contacting us at (800) 866-0614. Your election to receive reports in paper will apply to all funds held with Dupree Mutual Funds or through your financial intermediary.
ABOUT DUPREE MUTUAL FUNDS
In 1941, Dupree & Company, Inc. began business in Harlan, Kentucky as a small securities brokerage firm specializing in tax-exempt municipal bonds.
Over the years the firm, which in 1963 moved its offices to Lexington, Kentucky, grew to become a regional leader in public finance, helping to structure complex and innovative municipal bond financing for some of the largest public projects in the Commonwealth of Kentucky.
In 1979, Dupree & Company began what is now Dupree Mutual Funds with the Kentucky Tax-Free Income Series and became the Fund’s investment adviser. The Fund was one of the first single-state municipal bond funds in the country, and the first mutual fund to invest solely in Kentucky municipal bonds. Since then, several new offerings have been added to the Dupree Mutual Funds family:
Kentucky Tax-Free Short-to-Medium Series in 1987;
Intermediate Government Bond Series in 1992;
Tennessee Tax-Free Income Series in 1993;
Tennessee Tax-Free Short-to-Medium Series in 1994;
North Carolina Tax-Free Income Series in 1995;
North Carolina Tax-Free Short-to-Medium Series in 1995;
Alabama Tax-Free Income Series in 2000;
Mississippi Tax-Free Income Series in 2000; and
Taxable Municipal Bond Series in 2010.
Today, after more than 60 years in business, Dupree continues to be a pioneer in the industry. Our Kentucky, Tennessee, and Mississippi Series are currently the ONLY 100% “no-load” municipal bond funds available in those states. No-load means simply that shares of the funds are offered directly to investors with no front or back-end sales charges, as opposed to load funds, which are sold through brokerage firms or other institutions that typically carry sales charges.
At Dupree Mutual Funds, our goal is a simple one: to offer investors a high-quality, low-cost way to invest in municipal and government bonds while providing superior service to our shareholders. We encourage you to let us know how we’re doing.
TABLE OF CONTENTS
Management’s Discussion of Fund Performance: | Unaudited |
Twelve Months Ended June 30, 2020i
The investment objective of our tax-free municipal bond funds is to provide a high level of tax-free income derived from state-specific municipal bonds without incurring undue risk to principal. The investment objective of our government bond fund is to provide a high level of taxable income derived from securities of the U.S. government and its agencies without incurring undue risk to principal. Similarly, the investment objective of the taxable municipal bond fund is to provide a high level of taxable income derived from taxable municipal securities without incurring undue risk to principal.
This report covers the twelve month period from July 1, 2019 through June 30, 2020 (the “reporting period”). Economic activity increased at a moderate pace throughout the reporting period. Real gross domestic product (GDP) expanded at a 2.6 percent annual rate during the third quarter of 2019 and at an annual rate of 2.4 percent during the fourth quarter. Economic growth was derailed in early to mid-March with the emergence of a global pandemic caused by COVID-19. The economy contracted sharply during the first quarter of 2020 with real GDP decreasing at a 5.0 percent annual rate. Real GDP declined at a 32.9 percent annual rate in the second quarter of 2020 which was the most severe decline since 1947. Economic activity during the second quarter was disproportionately affected by the extended lockdown related to the pandemic.
The labor market experienced substantial upheaval during the reporting period. The national unemployment rate started out the reporting period at 3.7 percent and ended the reporting period at 11.1 percent. Wage growth increased as the unemployment rate spiked with average hourly earnings increasing at a 5.0 percent annualized rate in June. The increase in average hourly earnings largely reflected substantial job losses among lower-paid workers as a result of the COVID-19 pandemic and efforts to contain it.
Key measures of inflation remained stable during most of the reporting period but then declined sharply in the second quarter of 2020 with the onset of the COVID-19 pandemic. Weak demand and large price declines for some goods and services such as apparel, gasoline, air travel, and hotels contributed to the fall in prices. The Fed’s preferred inflation index, the personal consumption expenditure price index (PCE), increased 0.8 percent on a year-over-year basis through June, well below the Fed’s 2.0 percent target rate. The core PCE, which excludes food and energy prices, increased 0.9 percent on an annual basis through June. Measures of near-term and longer-run inflation expectations remained stable over the past twelve months.
The Federal Open Market Committee (FOMC) eased monetary policy during the reporting period by lowering the fed funds target rate by one-quarter percentage point at each of its meetings held in July, September, and October of 2019. The FOMC then lowered the fed funds target rate by one-half percentage point on March 3 in between meetings and subsequently by a full percentage point on March 15. The fed funds target rate range at the end of the reporting period was 0.00%-0.25%. The FOMC’s near-zero interest rate policy reflects the devastating effects of COVID-19 on economic activity, employment, and inflation and the heightened risks to the economic outlook.
To provide stability to the financial system and to support the flow of credit to households, the FOMC established 11 separate credit and liquidity facilities under section 13(3) of the Federal Reserve Act. These facilities support two primary goals—stabilizing short-term funding markets and providing more direct support for credit across the economy. One such facility is the Municipal Liquidity Facility (“MLF”), which is designed to help state and local governments manage cash flow pressures. The MLF permits the FOMC to purchase up to $500 billion of short-term debt directly from U.S. states, counties, cities, and certain multistate entities. Congress is also currently considering extending additional financial assistance to states and cities as part of an additional stimulus package.
Prior to the onset of the COVID-19 pandemic, most states and cities were enjoying strong fiscal conditions. Consecutive years of faster-than-expected revenue growth had led to budget surpluses and replenishment of rainy day funds in many jurisdictions. The onset of the COVID-19 pandemic and resulting recession abruptly changed this situation for the worse.
States rely on personal income taxes and sales taxes for roughly 75 percent of their general fund revenue. These revenue streams have been hit hard in light of stay-at-home orders, business closures, and rising unemployment claims. In just a short period of time, state fiscal conditions have experienced a dramatic deterioration. In this new fiscal environment, states are facing tough decisions such as spending reductions, instituting layoffs, furloughs, hiring freezes, drawing down rainy day reserve balances, and deferring large capital projects. Many states have enacted full-year budgets for fiscal 2021, but these may need to be adjusted given the uncertain revenue outlook and the possibility that future federal aid may be forthcoming.
The municipal bond market posted solid returns for the twelve month period under review. The Bloomberg Barclays Municipal Bond Index (“BBMBI”), which tracks investment grade municipal securities across all sectors and maturities, had a total return of 4.45 percent for the twelve month period ended June 30, 2020. Bonds with longer maturities (especially in the 12-17 year range) outperformed bonds with shorter maturities, and the highest-rated bonds (AAA and AA) generally outperformed lower-rated bonds.
i
A number of factors led to this solid performance during the reporting period. Bond prices rose (yields declined) as investors’ appetite for tax-exempt bonds increased. The boost in demand has been fueled in part by recent changes to the federal tax code (i.e., the impact from capping the state and local tax (SALT) deduction for higher-income earners) and also by investors’ flight to safe-haven assets. Favorable supply-and-demand dynamics (i.e., very firm demand coupled with lower supply) also supported municipal bond prices.
As of June 30, 2020, the BBMBI had a modified adjusted duration of 5.42 years, an average coupon of 4.58% and an average credit quality of AA2/AA3.
The Kentucky Tax-Free Income Series provided shareholders a total return of 3.08 percent for the twelve month period ended June 30, 2020. The Kentucky Tax-Free Short-to-Medium Series provided shareholders with a total return of 2.66 percent for the same time period. Both of the Kentucky funds had shorter durations and also held substantially more A-rated bonds than the BBMBI, thereby causing both to underperform the index during the reporting period.
Kentucky’s economy has continued to expand but at a relatively slow pace. The Commonwealth’s real GDP grew at an annualized rate of 1.1 percent in 2019 which was below the national average of 2.3 percent. Kentucky’s 2019 current-dollar GDP was $214.7 billion and ranked 28th in the United States. The Commonwealth ended FY20 with a balanced budget but anticipates a large shortfall for FY21. The state’s annual average unemployment rate at the end of June was 4.3 percent. In 2019, Kentucky had a per capita personal income of $44,017 which ranked 46th in the United States and was 78 percent of the national average, $56,663.
Kentucky’s appropriation supported debt was rated A1 by Moody’s and A- by Standard & Poor’s as of June 30, 2020. Kentucky had net tax-supported debt per capita of $2,278 as of calendar year-end 2019, which is substantially above the state net tax-supported debt median of $1,071 (Source: Moody’s Investors Services, State Government U.S.: Medians—State Debt Declined in 2019, But Likely to Grow in Coming Years”, May 12, 2020).
The Tennessee Tax-Free Income Series provided shareholders with a total return of 3.77 percent for the twelve month period ended June 30, 2020. The Tennessee Tax-Free Short-to-Medium Series provided a total return of 3.49 percent for the same time period. Both of the Tennessee funds had shorter durations and held fewer AAA-rated bonds than the BBMBI, thereby causing both to underperform the index during the reporting period.
Economic growth in Tennessee has mostly kept pace with the national average. In 2019, real GDP increased by 2.2 percent which was just below the national average of 2.3 percent. Tennessee’s current-dollar GDP in 2019 was $380.1 billion and ranked 18th in the United States. In 2019, the largest industry in Tennessee was finance, insurance, real estate, rental, and leasing which accounted for 17.0 percent of the state’s real GDP and had 2.9 percent real growth. The states’ second largest industry was professional and business services which accounted for 11.7 percent of the state’s GDP and had 6.5 percent real growth. Automobile manufacturing continues to be an important part of the state’s economy. The state’s annual average unemployment rate at the end of June was 9.7 percent. In 2019, the state had a per capita personal income of $48,761 which ranked 35th in the United States and was 86 percent of the national average, $56,663.
Tennessee relies on a combination of a state sales tax, corporate income taxes, franchise, and excise taxes for its revenue. Total state revenue collections through June (on an accrual basis June is the eleventh month in Tennessee’s 2019-2020 FY) were $298 million less than the budgeted estimate.
Tennessee’s general obligation (G.O.) bonds were rated Aaa by Moody’s and AAA by Standard & Poor’s as of June 30, 2020. Tennessee had net tax-supported debt per capita of $292 as of calendar year-end 2019, which is substantially below the state net tax-supported debt median of $1,071 (Source: Moody’s Investors Services, State Government U.S: “Medians—State Debt Declined in 2019, But Likely To Grow in Coming Years”, May 12, 2020).
The North Carolina Tax-Free Income Series provided shareholders with a total return of 4.48 percent for the twelve month period ended June 30, 2020. The North Carolina Tax-Free Short-to-Medium Series provided shareholders with a total return of 3.24 percent for the same time period. The North Carolina Tax-Free Income Series performed in line with the index. The North Carolina Tax-Free Short-to-Medium Series had a shorter duration and held fewer AAA-rated issues than the BBMBI, thereby causing it to underperform the index during the reporting period.
North Carolina’s economy has continued to perform relatively well. In 2019, North Carolina real GDP grew 2.3 percent which was in line with the national average. North Carolina’s 2019 current-dollar GDP was $587.7 billion and ranked 12th in the United States. The state’s average annual unemployment rate at the end of June was 7.6 percent. In 2019, North Carolina had a per capita personal income of $47,803 which ranked 41st in the United States and was 84 percent of the national average, $56,663.
ii
North Carolina’s G.O. bonds were rated Aaa by Moody’s and AAA by Standard & Poor’s as of June 30, 2020. North Carolina had net tax-supported debt per capita of $586 as of calendar year-end 2019, which is below the state net tax-supported debt median of $1,071 (Source: Moody’s Investors Services, State Government—U.S.: “Medians—State Debt Declined in 2019, But Likely To Grow in Coming Years”, May 12, 2020).
The Alabama Tax-Free Income Series provided shareholders with a total return of 5.49 percent for the twelve month period ended June 30, 2020. The fund held substantially more AA-rated and pre-refunded bonds than the BBMBI, thereby causing it to outperform the index during the reporting period.
Economic growth in Alabama has mostly kept pace with the national average. In 2019, Alabama’s real GDP grew 2.3 percent which was in line with the national average. Alabama’s 2019 current-dollar GDP was $231.0 billion which ranked 27th in the United States. Automotive manufacturing, aerospace, tourism, healthcare, biotechnology, and manufacturing continue to be the state’s main economic drivers. The state’s average annual unemployment rate at the end of June stood at 7.5 percent. In 2019, Alabama had a per capita personal income of $43,880 which ranked 48th in the United States and was 77 percent of the national average, $56,663.
Alabama’s G.O. bonds were rated Aa1 by Moody’s and AA by Standard & Poor’s as of June 30, 2020. Alabama had net tax-supported debt per capita of $822 as of calendar year-end 2020, which was lower than the state net tax-supported debt median of $1,071 (Source: Moody’s Investors Services, State Government U.S.: “Medians-State Debt Declined in 2019, But Likely To Grow in Coming Years”, May 12, 2020).
The Mississippi Tax-Free Income Series provided shareholders with a total return of 4.01 percent for the twelve month period ended June 30, 2020. The fund held fewer AAA-rated issues and had a shorter duration than the BBMBI, thereby causing it to underperform the index during the reporting period.
Mississippi’s economic recovery has continued to lag behind the nation. In 2019, Mississippi’s real GDP grew by 1.3 percent which was substantially below the national average of 2.3 percent. Mississippi’s 2019 current-dollar GDP was $118.7 billion and ranked 36th in the United States. The state’s average annual unemployment rate at the end of June was 8.7 percent. In 2019, Mississippi had a per capita personal income of $39,368 which ranked 50th in the United States and was 69 percent of the national average, $56,663.
The state’s G.O. bonds were rated Aa2 by Moody’s and AA by Standard & Poor’s as of June 30, 2020. Mississippi has net tax-supported debt per capita of $1,901 as of calendar year-end 2019, which is higher than the state net tax-supported debt median of $1,071 (Source: Moody’s Investors Services, State Government U.S.: “Medians-State Debt Declined in 2019, But Likely To Grow in Coming Years”, May 12, 2020).
The Intermediate Government Bond Series provided shareholders with a total return of 4.88 percent for the twelve months ended June 30, 2020. The Bloomberg Barclays U.S. Intermediate Government Bond Index (“BBGBI”) had a total return of 7.01 percent for the twelve month period ended June 30, 2020. The Intermediate Government Bond Series had a shorter duration than the BBGBI (2.68 years compared to 3.84 years), thereby causing it to underperform the index during the reporting period.
The Taxable Municipal Bond Series provided shareholders with a total return of 5.20 percent for the twelve month period ended June 30, 2020. The Bloomberg Barclays Municipal Bond Taxable Index (“BBTMI”) had a total return of 9.71 percent for the same time period. The Taxable Municipal Bond Series had a substantially shorter duration than the BBTMI (5.68 years compared to 10.07 years), thereby causing it to underperform the index during the reporting period.
Please note that index information is provided for reference only. No index can perfectly match the investments that make up a fund’s portfolio. In making investment decisions for our portfolios we do not attempt to track indices. The Bloomberg Barclays Municipal Bond index is national in scope and does not necessarily reflect the performance of state-specific municipal bond funds. Indices do not take into account any operating expenses or transaction costs. An investment cannot be made directly in an index.
i Data are from the Bureau of Economic Analysis, the U.S. Department of Labor Bureau of Labor Statistics, and various other sources management deems to be reliable. Some of the quoted data are preliminary in nature and may be subject to revision. Any opinions expressed herein are those of the funds’ portfolio management and are current as of June 30, 2020. They are not guarantees of performance or investment results and should not be taken as investment advice. Past performance is not a guarantee of future performance and you may lose money investing in the funds.
iii
The illustrations below provide each Fund’s sector allocation and
summarize key information about each Fund’s investments as of June 30, 2020. | Unaudited |
| | | | |
| |
Alabama Tax-Free Income Series | |
| CREDIT QUALITY* | | % of Net Assets
at Fair Value | |
Aaa/AAA | | | 1.08% | |
Aa/AA | | | 91.46% | |
A | | | 3.88% | |
Not Rated | | | 3.58% | |
| | | | | |
| | | | 100.00% | |
| | | | | |
| | | | | |
| COMPOSITION | | | |
| | | % of Net Assets | |
Prerefunded | | | 20.10% | |
School Improvement | | | 19.72% | |
Municipal Utility Revenue | | | 15.99% | |
Public Facilities | | | 15.95% | |
University Consolidated Education and Building Revenue | | | 12.48% | |
Refunding | | | 5.80% | |
Miscellaneous Public Improvement | | | 3.71% | |
Hospital and Healthcare Revenue | | | 2.33% | |
Turnpikes/Toll Road/Highway Revenue | | | 1.04% | |
Other Assets Less Liabilities | | | 2.88% | |
| | | | | |
| | | | 100.00% | |
| | | | | |
| | | | | |
| | | | | |
| | | | | |
| | | | |
| |
Kentucky Tax-Free Short-to-Medium Series | |
| CREDIT QUALITY* | | % of Net Assets
at Fair Value | |
Aaa/AAA | | | 0.41% | |
Aa/AA | | | 25.17% | |
A | | | 74.42% | |
| | | | | |
| | | | 100.00% | |
| | | | | |
| | | | | |
| COMPOSITION | | | |
| | | % of Net Assets | |
School Improvement | | | 22.83% | |
Miscellaneous Public Improvement | | | 20.35% | |
Public Facilities | | | 16.37% | |
Turnpikes/Toll Road/Highway Revenue | | | 9.50% | |
University Consolidated Education and Building Revenue | | | 7.34% | |
Hospital and Healthcare Revenue | | | 7.25% | |
Municipal Utility Revenue | | | 5.67% | |
Refunding | | | 4.06% | |
Prerefunded | | | 2.52% | |
Airport Revenue | | | 1.27% | |
Other Assets Less Liabilities | | | 2.84% | |
| | | | | |
| | | | 100.00% | |
| | | | | |
| | | | | |
| | | | |
| |
Kentucky Tax-Free Income Series | |
| CREDIT QUALITY* | | % of Net Assets
at Fair Value | |
Aa/AA | | | 48.32% | |
A | | | 50.34% | |
Baa/BBB | | | 0.02% | |
Not Rated | | | 1.32% | |
| | | | | |
| | | | 100.00% | |
| | | | | |
| | | | | |
| COMPOSITION | | | |
| | | % of Net Assets | |
Miscellaneous Public Improvement | | | 26.83% | |
School Improvement | | | 15.35% | |
University Consolidated Education and Building Revenue | | | 12.52% | |
Municipal Utility Revenue | | | 10.64% | |
Turnpikes/Toll Road/Highway Revenue | | | 7.59% | |
Hospital and Healthcare Revenue | | | 5.98% | |
Public Facilities | | | 5.76% | |
Refunding | | | 5.64% | |
Prerefunded | | | 3.68% | |
Airport Revenue | | | 1.26% | |
Ad Valorem Property | | | 0.14% | |
State and Local Mortgage/Housing Revenue | | | 0.11% | |
Other Assets Less Liabilities | | | 4.50% | |
| | | | | |
| | | | 100.00% | |
| | | | | |
| | | | |
| |
Mississippi Tax-Free Income Series | |
| CREDIT QUALITY* | | % of Net Assets
at Fair Value | |
Aa/AA | | | 88.38% | |
A | | | 11.62% | |
| | | | | |
| | | | 100.00% | |
| | | | | |
| | | | | |
| | | | | |
| COMPOSITION | | | |
| | | % of Net Assets | |
University Consolidated Education and Building Revenue | | | 25.46% | |
Prerefunded | | | 25.09% | |
Municipal Utility Revenue | | | 10.59% | |
Turnpikes/Toll Road/Highway Revenue | | | 8.13% | |
Public Facilities | | | 7.21% | |
School Improvement | | | 5.48% | |
Refunding | | | 4.74% | |
Ad Valorem Property | | | 3.85% | |
Miscellaneous Public Improvement | | | 3.71% | |
Hospital and Healthcare Revenue | | | 1.85% | |
Other Assets Less Liabilities | | | 3.89% | |
| | | | | |
| | | | 100.00% | |
| | | | | |
| | | | | |
iv
The illustrations below provide each Fund’s sector allocation and
summarize key information about each Fund’s investments as of June 30, 2020. | Unaudited |
| | | | |
| |
North Carolina Tax-Free Income Series | |
| CREDIT QUALITY * | | % of Net Assets
at Fair Value | |
Aaa/AAA | | | 3.88% | |
Aa/AA | | | 79.33% | |
A | | | 16.79% | |
| | | | | |
| | | | 100.00% | |
| | | | | |
| | | | | |
| | | | | |
| COMPOSITION | | | |
| | | % of Net Assets | |
University Consolidated Education and Building Revenue | | | 20.72% | |
School Improvement | | | 17.25% | |
Public Facilities | | | 14.30% | |
Municipal Utility Revenue | | | 9.50% | |
Prerefunded | | | 7.86% | |
Refunding | | | 7.86% | |
Hospital and Healthcare Revenue | | | 6.91% | |
Turnpikes/Toll Road/Highway Revenue | | | 4.57% | |
Miscellaneous Public Improvement | | | 3.51% | |
Airport Revenue | | | 3.10% | |
Lease Revenue | | | 1.08% | |
Escrowed to Maturity | | | 0.61% | |
Ad Valorem Property | | | 0.23% | |
Other Assets Less Liabilities | | | 2.50% | |
| | | | | |
| | | | 100.00% | |
| | | | | |
| | | | | |
| | | | |
| |
Tennessee Tax-Free Income Series | |
| CREDIT QUALITY* | | % of Net Assets
at Fair Value | |
Aaa/AAA | | | 2.97% | |
Aa/AA | | | 79.77% | |
A | | | 15.90% | |
Not Rated | | | 1.36% | |
| | | | | |
| | | | 100.00% | |
| | | | | |
| | | | | |
| COMPOSITION | | | |
| | | % of Net Assets | |
Municipal Utility Revenue | | | 35.58% | |
School Improvement | | | 11.70% | |
Public Facilities | | | 10.62% | |
University Consolidated Education and Building Revenue | | | 8.76% | |
Miscellaneous Public Improvement | | | 7.89% | |
Prerefunded | | | 7.37% | |
Hospital and Healthcare Revenue | | | 6.62% | |
Refunding | | | 5.40% | |
Airport Revenue | | | 2.60% | |
Industrial Revenue | | | 0.92% | |
State and Local Mortgage/Housing Revenue | | | 0.32% | |
Other Assets Less Liabilities | | | 2.22% | |
| | | | | |
| | | | 100.00% | |
| | | | | |
| | | | | |
| | | | |
| |
North Carolina Tax-Free Short-to-Medium Series | |
| CREDIT QUALITY * | | % of Net Assets
at Fair Value | |
Aaa/AAA | | | 2.32% | |
Aa/AA | | | 62.75% | |
A | | | 34.19% | |
Not Rated | | | 0.74% | |
| | | | | |
| | | | 100.00% | |
| | | | | |
| | | | | |
| COMPOSITION | | | |
| | | % of Net Assets | |
University Consolidated Education and Building Revenue | | | 24.50% | |
Refunding | | | 19.46% | |
Municipal Utility Revenue | | | 12.99% | |
School Improvement | | | 11.55% | |
Public Facilities | | | 8.52% | |
Hospital and Healthcare Revenue | | | 5.23% | |
Turnpikes/Toll Road/Highway Revenue | | | 3.92% | |
Prerefunded | | | 3.84% | |
Ad Valorem Property | | | 2.19% | |
Lease Revenue | | | 2.05% | |
Escrowed to Maturity | | | 1.84% | |
Miscellaneous Public Improvement | | | 1.09% | |
Other Assets Less Liabilities | | | 2.82% | |
| | | | | |
| | | | 100.00% | |
| | | | | |
| | | | | |
| | | | | |
| | | | |
| |
Tennessee Tax-Free Short-to-Medium Series | |
| CREDIT QUALITY* | | % of Net Assets
at Fair Value | |
Aa/AA | | | 82.71% | |
A | | | 16.95% | |
Not Rated | | | 0.34% | |
| | | | | |
| | | | 100.00% | |
| | | | | |
| | | | | |
| | | | | |
| COMPOSITION | | | |
| | | % of Net Assets | |
Refunding | | | 25.88% | |
Public Facilities | | | 22.84% | |
Municipal Utility Revenue | | | 20.64% | |
School Improvement | | | 12.97% | |
University Consolidated Education and Building Revenue | | | 9.74% | |
Prerefunded | | | 1.94% | |
Airport Revenue | | | 1.64% | |
Miscellaneous Public Improvement | | | 0.61% | |
Other Assets Less Liabilities | | | 3.74% | |
| | | | | |
| | | | 100.00% | |
| | | | | |
| | | | | |
| | | | | |
| | | | | |
| | | | | |
v
The illustrations below provide each Fund’s sector allocation and
summarize key information about each Fund’s investments as of June 30, 2020. | Unaudited |
| | | | |
| |
Intermediate Government Bond Series | |
| CREDIT QUALITY* | | % of Net Assets
at Fair Value | |
Aaa/AAA | | | 100.00% | |
| | | | | |
| | | | | |
| | | | | |
| | | | | |
| | | | | |
| COMPOSITION | | | |
| | | % of Net Assets | |
Federal Farm Credit Bank | | | 67.34% | |
Federal Home Loan Bank | | | 29.25% | |
Other Assets Less Liabilities | | | 3.41% | |
| | | | | |
| | | | 100.00% | |
| | | | | |
| | | | | |
| | | | | |
| | | | | |
| | | | | |
| | | | | |
| | | | | |
| | | | | |
| | | | | |
| | | | | |
| | | | | |
| | | | | |
| | | | |
| |
Taxable Municipal Bond Series | |
| CREDIT QUALITY* | | % of Net Assets
at Fair Value | |
Aa/AA | | | 93.79% | |
A | | | 6.21% | |
| | | | | |
| | | | 100.00% | |
| | | | | |
| | | | | |
| COMPOSITION | | | |
| | | % of Net Assets | |
Municipal Utility Revenue | | | 23.53% | |
Prerefunded | | | 20.77% | |
Public Facilities | | | 12.57% | |
School Improvement | | | 10.79% | |
University Consolidated Education and Building Revenue | | | 5.93% | |
Miscellaneous Public Improvement | | | 5.13% | |
Hospital and Healthcare Revenue | | | 3.90% | |
Turnpikes/Toll Road/Highway Revenue | | | 3.23% | |
Marina/Port Authority Revenue | | | 2.27% | |
Refunding | | | 2.23% | |
Ad Valorem Property | | | 1.97% | |
Airport Revenue | | | 0.96% | |
Other Assets Less Liabilities | | | 6.72% | |
| | | | | |
| | | | 100.00% | |
| | | | | |
| | | | | |
| * | Ratings by Moody’s Investors Services, Inc. unless noted otherwise. See Schedules of Portfolio Investments for individual bond ratings. |
vi
PERFORMANCE COMPARISON (Unaudited)
The following graphs compare the change in value of a $10,000 investment in each series of Dupree Mutual Funds with the change in value of a $10,000 investment in a comparable index. The comparisons are made over 10 years or since the inception of the series, if shorter than ten years. Results are for the fiscal years ended June 30.
PERFORMANCE DISCLOSURES
Past performance is not indicative of future results. The current performance may be lower or higher than the performance data quoted. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than the original cost.
The performance tables and the graphs above do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares.
For performance data current to the most recent month-end call 800-866-0614 or visit our website at www.dupree-funds.com.
Notes on Graphs:
Results reflect reinvestment of all dividend and capital gain distributions. No index can perfectly match the investments that make up a fund’s portfolio. For each series, we have selected an index that we believe gives the most accurate picture of how the series performed during the reporting period. The investor should understand that an index is a mathematical hypothesis and does not reflect a real market situation. For example, the portfolio of each index is replaced with an entirely different portfolio each year without reflecting operating expenses or transaction costs, an impossibility in reality. On the other hand, the fund’s performance reflects not only these factors but management costs as well.
Please note that on August 24, 2016, Bloomberg LP completed its acquisition of Barclays Risk Analytics and Index Solutions Limited from Barclays Bank PLC and co-branded the indices as the Bloomberg Barclays Indices.
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DUPREE MUTUAL FUNDS — ALABAMA TAX-FREE INCOME SERIES
SCHEDULE OF PORTFOLIO INVESTMENTS
Alabama Municipal Bonds
June 30, 2020
| | | | | | | | | | | | | | | | | | |
| Bond Description | | Coupon | | | Maturity
Date | | | Rating# | | Par Value | | | Fair Value | |
| PREREFUNDED BONDS | | | | | | | | | | | | | | | | | | |
| 20.10% of Net Assets | | | | | | | | | | | | | | | | | | |
Alabaster AL Board of Education Special Tax Warrants** | | | 5.000 | % | | | 09/01/2039 | | | A1 | | $ | 600,000 | | | $ | 714,006 | |
Auburn AL Waterworks Board Water Revenue | | | 5.000 | | | | 09/01/2036 | | | Aa2 | | | 250,000 | | | | 306,335 | |
Birmingham AL Waterworks | | | 5.000 | | | | 01/01/2026 | | | Aa2 | | | 80,000 | | | | 81,904 | |
Birmingham AL Waterworks** | | | 5.000 | | | | 01/01/2038 | | | Aa2 | | | 550,000 | | | | 614,111 | |
Birmingham AL Waterworks | | | 5.000 | | | | 01/01/2040 | | | Aa2 | | | 150,000 | | | | 180,761 | |
Decatur City AL Board of Education Special Tax | | | 5.000 | | | | 02/01/2040 | | | Aa2 | | | 225,000 | | | | 271,645 | |
Jasper AL Warrants | | | 5.000 | | | | 03/01/2031 | | | A2 | | | 250,000 | | | | 292,448 | |
Jasper AL Warrants | | | 5.000 | | | | 03/01/2032 | | | A2 | | | 450,000 | | | | 526,406 | |
Limestone County AL Water & Sewer Authority | | | 5.000 | | | | 12/01/2033 | | | AA-* | | | 300,000 | | | | 348,501 | |
Limestone County AL Water & Sewer Authority | | | 5.000 | | | | 12/01/2034 | | | AA-* | | | 250,000 | | | | 289,665 | |
Morgan County AL Board of Education Capital Outlay Warrants | | | 5.000 | | | | 03/01/2035 | | | NR | | | 155,000 | | | | 170,035 | |
Morgan County AL Board of Education Capital Outlay Warrants | | | 5.000 | | | | 03/01/2035 | | | NR | | | 245,000 | | | | 268,765 | |
Opelika AL Warrants | | | 5.000 | | | | 11/01/2031 | | | Aa2 | | | 150,000 | | | | 159,477 | |
Trussville AL Warrants | | | 5.000 | | | | 10/01/2039 | | | NR | | | 445,000 | | | | 511,399 | |
Tuscaloosa AL Warrants | | | 5.000 | | | | 01/01/2032 | | | Aa1 | | | 350,000 | | | | 406,742 | |
Tuscaloosa AL Warrants | | | 5.000 | | | | 07/01/2034 | | | Aa1 | | | 300,000 | | | | 355,533 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 5,497,733 | |
| SCHOOL IMPROVEMENT BONDS | | | | | | | | | | | | | | | | | | |
| 19.72% of Net Assets | | | | | | | | | | | | | | | | | | |
Cherokee County AL Board of Education Tax Warrants | | | 4.000 | | | | 12/01/2034 | | | A1 | | | 310,000 | | | | 357,560 | |
Elmore County AL Board of Education | | | 4.000 | | | | 08/01/2038 | | | Aa3 | | | 250,000 | | | | 291,350 | |
Etowah County AL Board of Education Capital Outlay Tax | | | 5.000 | | | | 09/01/2037 | | | A+* | | | 200,000 | | | | 216,134 | |
Jefferson County AL Board of Education Public School Warrants | | | 4.000 | | | | 02/01/2042 | | | A1 | | | 325,000 | | | | 361,100 | |
Jefferson County AL Public Schools | | | 4.000 | | | | 02/01/2038 | | | A1 | | | 165,000 | | | | 184,909 | |
Limestone County AL Board of Education | | | 5.000 | | | | 07/01/2033 | | | AA* | | | 255,000 | | | | 294,706 | |
Madison AL Board of Education Special Tax School Warrants | | | 4.000 | | | | 02/01/2040 | | | Aa3 | | | 400,000 | | | | 473,452 | |
Madison AL Board of Education Special Tax School Warrants | | | 4.000 | | | | 02/01/2041 | | | Aa3 | | | 370,000 | | | | 435,568 | |
Madison County AL Board of Education Capital Outlay** | | | 5.000 | | | | 09/01/2031 | | | Aa3 | | | 660,000 | | | | 798,263 | |
Marshall County AL Board of Education Special Tax School Warrants | | | 4.000 | | | | 03/01/2033 | | | A2 | | | 250,000 | | | | 280,230 | |
Morgan County AL Board of Education Capital Outlay Warrants | | | 5.000 | | | | 03/01/2035 | | | AA-* | | | 405,000 | | | | 439,239 | |
Shelby County AL Board of Education Capital Outlay Warrants** | | | 5.000 | | | | 02/01/2031 | | | Aa2 | | | 615,000 | | | | 630,104 | |
Troy AL Public Educational Building Authority | | | 5.250 | | | | 12/01/2036 | | | A2 | | | 30,000 | | | | 30,518 | |
Tuscaloosa County AL Board of Education Special Tax School Warrants | | | 5.000 | | | | 02/01/2036 | | | Aa3 | | | 250,000 | | | | 301,023 | |
Tuscaloosa County AL Board of Education Special Tax School Warrants | | | 5.000 | | | | 02/01/2037 | | | Aa3 | | | 250,000 | | | | 300,678 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 5,394,834 | |
| MUNICIPAL UTILITY REVENUE BONDS | | | | | | | | | | | | | | | | | | |
| 15.99% of Net Assets | | | | | | | | | | | | | | | | | | |
Athens AL Water & Sewer | | | 4.000 | | | | 05/01/2039 | | | A1 | | | 200,000 | | | | 230,724 | |
Athens AL Water & Sewer | | | 4.000 | | | | 05/01/2040 | | | A1 | | | 100,000 | | | | 114,697 | |
Berry AL Water & Sewer Revenue | | | 4.000 | | | | 09/01/2039 | | | AA* | | | 250,000 | | | | 271,013 | |
Birmingham AL Waterworks | | | 4.000 | | | | 01/01/2037 | | | Aa2 | | | 250,000 | | | | 283,773 | |
Birmingham AL Waterworks | | | 4.000 | | | | 01/01/2038 | | | Aa2 | | | 205,000 | | | | 231,888 | |
Birmingham AL Waterworks | | | 4.000 | | | | 01/01/2041 | | | Aa2 | | | 225,000 | | | | 252,313 | |
Chatom AL Industrial Board Gulf Opportunity Zone | | | 5.000 | | | | 08/01/2037 | | | A3 | | | 150,000 | | | | 150,501 | |
Cullman AL Utility Board Water Revenue | | | 4.750 | | | | 09/01/2037 | | | A1 | | | 400,000 | | | | 402,366 | |
Gadsden AL Waterworks & Sewer Board | | | 4.000 | | | | 06/01/2034 | | | A1 | | | 120,000 | | | | 136,915 | |
Jasper AL Waterworks & Sewer Board Utility Revenue | | | 5.000 | | | | 06/01/2030 | | | A+* | | | 455,000 | | | | 456,247 | |
Limestone County AL Water & Sewer Authority | | | 4.750 | | | | 12/01/2033 | | | AA* | | | 290,000 | | | | 346,298 | |
Limestone County AL Water & Sewer Authority | | | 4.750 | | | | 12/01/2035 | | | AA* | | | 400,000 | | | | 455,936 | |
Opelika AL Utilities Board | | | 4.000 | | | | 06/01/2039 | | | Aa3 | | | 250,000 | | | | 282,675 | |
Prattville AL Sewer Warrants | | | 4.000 | | | | 11/01/2042 | | | AA-* | | | 375,000 | | | | 422,655 | |
Tallassee AL Water Gas & Sewer Warrants | | | 5.125 | | | | 05/01/2036 | | | A2 | | | 10,000 | | | | 10,013 | |
West Morgan East Lawrence AL Water & Sewer | | | 4.750 | | | | 08/15/2030 | | | AA* | | | 75,000 | | | | 75,347 | |
West Morgan East Lawrence AL Water & Sewer | | | 4.850 | | | | 08/15/2035 | | | AA* | | | 250,000 | | | | 251,158 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 4,374,519 | |
The accompanying footnotes are an integral part of the financial statements.
1
DUPREE MUTUAL FUNDS — ALABAMA TAX-FREE INCOME SERIES
SCHEDULE OF PORTFOLIO INVESTMENTS
Alabama Municipal Bonds
June 30, 2020
| | | | | | | | | | | | | | | | | | |
| Bond Description | | Coupon | | | Maturity
Date | | | Rating# | | Par Value | | | Fair Value | |
| PUBLIC FACILITIES REVENUE BONDS | | | | | | | | | | | | | | | | | | |
| 15.95% of Net Assets | | | | | | | | | | | | | | | | | | |
Anniston AL Public Building Authority | | | 5.000 | % | | | 03/01/2032 | | | A2 | | $ | 400,000 | | | $ | 410,944 | |
Anniston AL Public Building Authority DHR Project | | | 5.250 | | | | 05/01/2030 | | | AA-* | | | 50,000 | | | | 50,115 | |
Anniston AL Public Building Authority DHR Project | | | 5.500 | | | | 05/01/2033 | | | AA-* | | | 200,000 | | | | 200,480 | |
Bessemer AL Public Educational Building Authority Revenue | | | 5.000 | | | | 07/01/2030 | | | AA* | | | 250,000 | | | | 250,695 | |
Birmingham Jefferson AL Civic Center Authority Revenue | | | 5.000 | | | | 05/01/2037 | | | Aa3 | | | 400,000 | | | | 489,548 | |
Birmingham Jefferson AL Civic Center Authority Revenue | | | 5.000 | | | | 05/01/2038 | | | Aa3 | | | 250,000 | | | | 302,325 | |
Boaz AL Warrants | | | 4.000 | | | | 02/01/2037 | | | AA* | | | 250,000 | | | | 287,115 | |
Bullock County AL Public Building Authority | | | 4.000 | | | | 10/01/2038 | | | AA-* | | | 500,000 | | | | 554,765 | |
Lowndes County AL Warrants | | | 5.250 | | | | 02/01/2037 | | | A2 | | | 250,000 | | | | 255,328 | |
Montgomery County AL Public Building Authority | | | 5.000 | | | | 03/01/2036 | | | Aa2 | | | 350,000 | | | | 432,927 | |
Phenix City AL Public Building Authority | | | 4.000 | | | | 10/01/2035 | | | AA-* | | | 100,000 | | | | 116,082 | |
Phenix City AL Public Building Authority | | | 4.000 | | | | 10/01/2037 | | | AA-* | | | 120,000 | | | | 140,843 | |
Trussville AL Warrants** | | | 5.000 | | | | 10/01/2039 | | | Aa2 | | | 775,000 | | | | 871,302 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 4,362,469 | |
| UNIVERSITY CONSOLIDATED EDUCATION AND BUILDING REVENUE BONDS | |
| 12.48% of Net Assets | | | | | | | | | | | | | | | | | | |
AL Community College System Gadsden State Community College | | | 5.000 | | | | 06/01/2038 | | | A1 | | | 325,000 | | | | 392,909 | |
Auburn University AL General Fee Revenue | | | 4.000 | | | | 06/01/2036 | | | Aa2 | | | 380,000 | | | | 429,472 | |
Troy University AL Facilities Revenue | | | 5.000 | | | | 11/01/2028 | | | A1 | | | 250,000 | | | | 293,218 | |
Troy University AL Facilities Revenue | | | 4.000 | | | | 11/01/2032 | | | A1 | | | 300,000 | | | | 344,052 | |
Troy University AL Facilities Revenue | | | 5.000 | | | | 11/01/2037 | | | A1 | | | 200,000 | | | | 241,504 | |
University of AL Birmingham | | | 5.000 | | | | 10/01/2037 | | | Aa2 | | | 225,000 | | | | 253,654 | |
University of AL Huntsville General Fee Revenue | | | 5.000 | | | | 09/01/2037 | | | Aa3 | | | 250,000 | | | | 307,265 | |
University of AL Huntsville General Fee Revenue | | | 5.000 | | | | 09/01/2038 | | | Aa3 | | | 500,000 | | | | 619,325 | |
University of AL Huntsville General Fee Revenue | | | 5.000 | | | | 09/01/2038 | | | Aa3 | | | 435,000 | | | | 532,891 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 3,414,290 | |
| REFUNDING BONDS | | | | | | | | | | | | | | | | | | |
| 5.80% of Net Assets | | | | | | | | | | | | | | | | | | |
Enterprise AL Warrants | | | 4.500 | | | | 11/01/2032 | | | Aa3 | | | 115,000 | | | | 124,604 | |
Montgomery AL Warrants | | | 5.000 | | | | 06/15/2035 | | | A1 | | | 500,000 | | | | 616,695 | |
Northport AL Warrants** | | | 5.000 | | | | 08/01/2040 | | | AA-* | | | 735,000 | | | | 844,456 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 1,585,755 | |
| MISCELLANEOUS PUBLIC IMPROVEMENT BONDS | | | | | | | | | | | | | | | | | | |
| 3.71% of Net Assets | | | | | | | | | | | | | | | | | | |
Birmingham AL Warrants | | | 4.000 | | | | 12/01/2035 | | | Aa3 | | | 250,000 | | | | 290,423 | |
Birmingham AL Warrants | | | 5.000 | | | | 12/01/2037 | | | Aa3 | | | 250,000 | | | | 311,302 | |
Madison AL Warrants | | | 5.000 | | | | 04/01/2035 | | | Aa2 | | | 350,000 | | | | 411,968 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 1,013,693 | |
| HOSPITAL AND HEALTHCARE REVENUE BONDS | | | | | | | | | | | | | | | | | | |
| 2.33% of Net Assets | | | | | | | | | | | | | | | | | | |
Chilton County AL Health Care Authority Chilton County Hospital** | | | 5.000 | | | | 11/01/2035 | | | AA-@ | | | 550,000 | | | | 636,119 | |
| | | | | | | | | | | | | | | | | | |
| TURNPIKES/TOLLROAD/HIGHWAY REVENUE BONDS | | | | | | | | | | | | | | | | | | |
| 1.04% of Net Assets | | | | | | | | | | | | | | | | | | |
AL Federal Aid Highway Finance Authority | | | 4.000 | | | | 06/01/2037 | | | Aa1 | | | 250,000 | | | | 285,748 | |
| | | | | | | | | | | | | | | | | | |
Total Investments 97.12% of Net Assets (cost $24,666,090) (See (a) below for further explanation) | | | | | | | | | $ | 26,565,160 | |
| | | | | | | | | | | | | | | | | | |
Other assets in excess of liabilities 2.88% | | | | | | | | | | | | | | | | | 788,836 | |
| | | | | | | | | | | | | | | | | | |
Net Assets 100% | | | | | | | | | | | | | | | | $ | 27,353,996 | |
| | | | | | | | | | | | | | | | | | |
| | # | | Ratings by Moody’s Investors Service unless noted otherwise. |
| | | | Bond ratings are unaudited and not covered by Report of Independent Registered Public Accounting Firm. |
| | | | All ratings are as of the date indicated and do not reflect subsequent changes. |
| | * | | Rated by Standard & Poor’s Corporation |
| | @ | | Rated by Fitch’s Investors Service |
The accompanying footnotes are an integral part of the financial statements.
2
DUPREE MUTUAL FUNDS — ALABAMA TAX-FREE INCOME SERIES
SCHEDULE OF PORTFOLIO INVESTMENTS
Alabama Municipal Bonds
June 30, 2020
| | ** | | Security is segregated — see footnote 1(D) |
| (a) | | Cost for federal income tax purposes is $24,666,090 and net unrealized appreciation of investments is as follows: |
| | | | | | |
| | Unrealized appreciation | | $ | 1,899,250 | |
| | Unrealized depreciation | | | (180 | ) |
| | | | | | |
| | Net unrealized appreciation | | $ | 1,899,070 | |
| | | | | | |
Other Information
The following is a summary of the inputs used, as of June 30, 2020, involving the Fund’s investments in securities carried at fair value. The inputs or methodology used for valuing securities may not be an indication of the risk associated with investing in those securities. For more information on valuation inputs, and their aggregation into the levels used in the table below, please refer to the Security Valuation section in the accompanying Notes to Financial Statements.
| | | | | | |
| | | Valuation Inputs | | Municipal Bonds | |
Level 1 | | Quoted Prices | | $ | — | |
Level 2 | | Other Significant Observable Inputs | | | 26,565,160 | |
Level 3 | | Significant Unobservable Inputs | | | — | |
| | | | | | |
| | | | $ | 26,565,160 | |
| | | | | | |
The accompanying footnotes are an integral part of the financial statements.
3
ALABAMA TAX-FREE INCOME SERIES
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2020
| | | | | | | | |
ASSETS: | | | | | | | | |
Investments in securities, at fair value (Cost: $24,666,090) | | | | | | $ | 26,565,160 | |
Cash | | | | | | | 595,131 | |
Interest receivable | | | | | | | 324,472 | |
| | | | | | | | |
Total assets | | | | | | | 27,484,763 | |
LIABILITIES: | | | | | | | | |
Payable for: | | | | | | | | |
Distributions to shareholders | | | 99,242 | | | | | |
Fund shares redeemed | | | 5,595 | | | | | |
Investment advisory fee | | | 5,581 | | | | | |
Transfer agent fee | | | 7,085 | | | | | |
Professional fees | | | 2,705 | | | | | |
Custodian expense | | | 2,334 | | | | | |
Trustees fees | | | 1,093 | | | | | |
Accrued expenses | | | 7,132 | | | | | |
| | | | | | | | |
Total liabilities | | | | | | | 130,767 | |
| | | | | | | | |
NET ASSETS: | | | | | | | | |
Capital | | | | | | | 25,526,330 | |
Total distributable earnings | | | | | | | 1,827,666 | |
| | | | | | | | |
Net assets at value | | | | | | $ | 27,353,996 | |
| | | | | | | | |
NET ASSET VALUE, offering price and redemption price per share
(2,140,551 shares outstanding; unlimited number of shares authorized; no par value) | | | | | | $ | 12.78 | |
| | | | | | | | |
STATEMENT OF OPERATIONS
For the year ended June 30, 2020
| | | | |
Net investment income: | | | | |
Interest income | | $ | 865,534 | |
| | | | |
Expenses: | | | | |
Investment advisory fee | | | 131,964 | |
Transfer agent fee | | | 37,671 | |
Custodian expense | | | 10,345 | |
Professional fees | | | 7,402 | |
Compliance fees | | | 7,221 | |
Pricing fees | | | 6,017 | |
Registration fees | | | 5,078 | |
Trustees fees | | | 3,064 | |
Other expenses | | | 6,737 | |
| �� | | | |
Total expenses | | | 215,499 | |
Fees waived by Adviser (Note 2) | | | (29,696 | ) |
Custodian expense reduction | | | (371 | ) |
| | | | |
Net expenses | | | 185,432 | |
| | | | |
Net investment income | | | 680,102 | |
| | | | |
Realized and unrealized gain on investments: | | | | |
Net realized loss gain | | | 18,246 | |
Net change in unrealized appreciation/(depreciation) | | | 680,806 | |
| | | | |
Net realized and unrealized gain on investments | | | 699,052 | |
| | | | |
Net increase in net assets resulting from operations | | $ | 1,379,154 | |
| | | | |
The accompanying footnotes are an integral part of the financial statements.
4
ALABAMA TAX-FREE INCOME SERIES
STATEMENTS OF CHANGES IN NET ASSETS
For the years ended June 30, 2020 and 2019
| | | | | | | | |
| | | 2020 | | | 2019 | |
Operations: | | | | | | | | |
Net investment income | | $ | 680,102 | | | $ | 707,873 | |
Net realized gain/(loss) on investments | | | 18,246 | | | | (25,778 | ) |
Net change in unrealized appreciation/(depreciation) | | | 680,806 | | | | 759,933 | |
| | | | | | | | |
Net increase in net assets resulting from operations | | | 1,379,154 | | | | 1,442,028 | |
Total distributions (Note 6) | | | (680,102 | ) | | | (707,873 | ) |
Net Fund share transactions (Note 4) | | | 501,183 | | | | 164,601 | |
| | | | | | | | |
Total increase | | | 1,200,235 | | | | 898,756 | |
Net assets: | | | | | | | | |
Beginning of year | | | 26,153,761 | | | | 25,255,005 | |
| | | | | | | | |
End of year | | $ | 27,353,996 | | | $ | 26,153,761 | |
| | | | | | | | |
FINANCIAL HIGHLIGHTS
| | | | | | | | | | | | | | | | | | | | |
| Selected data for a share outstanding: | | For the years ended June 30, | |
| | | 2020 | | | 2019 | | | 2018 | | | 2017 | | | 2016 | |
Net asset value, beginning of year | | $ | 12.43 | | | $ | 12.08 | | | $ | 12.29 | | | $ | 12.77 | | | $ | 12.36 | |
| | | | | | | | | | | | | | | | | | | | |
Income from investment operations: | | | | | | | | | | | | | | | | | | | | |
Net investment income | | | 0.33 | | | | 0.34 | | | | 0.36 | | | | 0.37 | | | | 0.39 | |
Net gains/(losses) on investments | | | 0.35 | | | | 0.35 | | | | (0.21 | ) | | | (0.48 | ) | | | 0.41 | |
| | | | | | | | | | | | | | | | | | | | |
Total from investment operations | | | 0.68 | | | | 0.69 | | | | 0.15 | | | | (0.11 | ) | | | 0.80 | |
Less distributions: | | | | | | | | | | | | | | | | | | | | |
Distributions from net investment income | | | (0.33 | ) | | | (0.34 | ) | | | (0.36 | ) | | | (0.37 | ) | | | (0.39 | ) |
| | | | | | | | | | | | | | | | | | | | |
Net asset value, end of year | | $ | 12.78 | | | $ | 12.43 | | | $ | 12.08 | | | $ | 12.29 | | | $ | 12.77 | |
| | | | | | | | | | | | | | | | | | | | |
Total return | | | 5.49% | | | | 5.80% | | | | 1.24% | | | | (0.82 | )% | | | 6.61% | |
Net assets, end of year (in thousands) | | $ | 27,354 | | | $ | 26,154 | | | $ | 25,255 | | | $ | 26,555 | | | $ | 29,378 | |
Ratio of net expenses to average net assets (a) | | | 0.70% | | | | 0.70% | | | | 0.70% | | | | 0.70% | | | | 0.71% | |
Ratio of gross expenses to average net assets | | | 0.82% | | | | 0.84% | | | | 0.82% | | | | 0.78% | | | | 0.78% | |
Ratio of net investment income to average net assets | | | 2.58% | | | | 2.79% | | | | 2.96% | | | | 3.00% | | | | 3.14% | |
Portfolio turnover | | | 6.98% | | | | 16.54% | | | | 13.83% | | | | 6.95% | | | | 5.37% | |
| (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. |
The accompanying footnotes are an integral part of the financial statements.
5
DUPREE MUTUAL FUNDS — KENTUCKY TAX-FREE INCOME SERIES
SCHEDULE OF PORTFOLIO INVESTMENTS
Kentucky Municipal Bonds
June 30, 2020
| | | | | | | | | | | | | | | | | | |
| Bond Description | | Coupon | | | Maturity
Date | | | Rating# | | Par Value | | | Fair Value | |
| MISCELLANEOUS PUBLIC IMPROVEMENT BONDS | | | | | | | | | | | | | | | | | | |
| 26.83% of Net Assets | |
| KY Association of Counties | | | 4.000 | % | | | 02/01/2028 | | | AA-* | | $ | 345,000 | | | $ | 412,359 | |
KY Association of Counties | | | 4.000 | | | | 02/01/2029 | | | AA-* | | | 240,000 | | | | 291,180 | |
KY Association of Counties | | | 5.000 | | | | 02/01/2030 | | | AA-* | | | 100,000 | | | | 100,356 | |
KY Association of Counties | | | 5.000 | | | | 02/01/2032 | | | AA-* | | | 165,000 | | | | 165,597 | |
KY Association of Counties | | | 4.000 | | | | 02/01/2033 | | | AA-* | | | 420,000 | | | | 475,885 | |
KY Association of Counties | | | 4.000 | | | | 02/01/2034 | | | AA-* | | | 435,000 | | | | 490,998 | |
KY Association of Counties | | | 4.000 | | | | 02/01/2035 | | | AA-* | | | 690,000 | | | | 793,486 | |
KY Association of Counties | | | 4.000 | | | | 02/01/2035 | | | AA-* | | | 460,000 | | | | 517,518 | |
KY Association of Counties | | | 5.000 | | | | 02/01/2035 | | | AA-* | | | 120,000 | | | | 120,419 | |
KY Association of Counties | | | 4.000 | | | | 02/01/2037 | | | AA-* | | | 745,000 | | | | 853,331 | |
KY Association of Counties | | | 4.000 | | | | 02/01/2038 | | | AA-* | | | 3,165,000 | | | | 3,610,854 | |
KY Association of Counties | | | 4.000 | | | | 02/01/2039 | | | AA-* | | | 1,000,000 | | | | 1,137,090 | |
KY Bond Corporation Finance Program | | | 5.500 | | | | 02/01/2031 | | | AA-* | | | 1,115,000 | | | | 1,148,182 | |
KY State Property & Building #76 | | | 5.500 | | | | 08/01/2021 | | | A1 | | | 1,400,000 | | | | 1,465,842 | |
KY State Property & Building #105 | | | 4.750 | | | | 04/01/2031 | | | A2 | | | 2,110,000 | | | | 2,244,724 | |
KY State Property & Building #105 | | | 4.750 | | | | 04/01/2032 | | | A2 | | | 2,205,000 | | | | 2,328,877 | |
KY State Property & Building #105 | | | 4.750 | | | | 04/01/2033 | | | A2 | | | 2,310,000 | | | | 2,437,882 | |
KY State Property & Building #106 | | | 5.000 | | | | 10/01/2028 | | | A1 | | | 2,030,000 | | | | 2,225,509 | |
KY State Property & Building #106 | | | 5.000 | | | | 10/01/2029 | | | A1 | | | 4,130,000 | | | | 4,526,397 | |
KY State Property & Building #106 | | | 5.000 | | | | 10/01/2030 | | | A1 | | | 7,165,000 | | | | 7,833,710 | |
KY State Property & Building #106 | | | 5.000 | | | | 10/01/2031 | | | A1 | | | 4,910,000 | | | | 5,302,162 | |
KY State Property & Building #106 | | | 5.000 | | | | 10/01/2032 | | | A1 | | | 6,275,000 | | | | 6,844,080 | |
KY State Property & Building #106 | | | 5.000 | | | | 10/01/2033 | | | A1 | | | 4,870,000 | | | | 5,295,638 | |
KY State Property & Building #108 | | | 5.000 | | | | 08/01/2026 | | | A1 | | | 955,000 | | | | 1,096,369 | |
KY State Property & Building #108 | | | 5.000 | | | | 08/01/2028 | | | A1 | | | 2,670,000 | | | | 3,041,611 | |
KY State Property & Building #108 | | | 5.000 | | | | 08/01/2030 | | | A1 | | | 5,000,000 | | | | 5,598,500 | |
KY State Property & Building #108 | | | 5.000 | | | | 08/01/2031 | | | A1 | | | 8,290,000 | | | | 9,294,914 | |
KY State Property & Building #108 | | | 5.000 | | | | 08/01/2032 | | | A1 | | | 8,820,000 | | | | 9,898,157 | |
KY State Property & Building #108 | | | 5.000 | | | | 08/01/2033 | | | A1 | | | 5,270,000 | | | | 5,898,131 | |
KY State Property & Building #108 | | | 5.000 | | | | 08/01/2034 | | | A1 | | | 4,900,000 | | | | 5,437,040 | |
KY State Property & Building #110 | | | 5.000 | | | | 08/01/2029 | | | A1 | | | 4,200,000 | | | | 4,749,906 | |
KY State Property & Building #110 | | | 5.000 | | | | 08/01/2032 | | | A1 | | | 1,515,000 | | | | 1,700,194 | |
KY State Property & Building #110 | | | 5.000 | | | | 08/01/2033 | | | A1 | | | 1,000,000 | | | | 1,119,190 | |
KY State Property & Building #110 | | | 5.000 | | | | 08/01/2034 | | | A1 | | | 1,900,000 | | | | 2,108,240 | |
KY State Property & Building #110 | | | 5.000 | | | | 08/01/2035 | | | A1 | | | 3,680,000 | | | | 4,079,648 | |
KY State Property & Building #112 | | | 5.000 | | | | 11/01/2028 | | | A1 | | | 2,765,000 | | | | 3,209,833 | |
KY State Property & Building #112 | | | 5.000 | | | | 02/01/2035 | | | A1 | | | 8,325,000 | | | | 9,311,513 | |
KY State Property & Building #112 | | | 5.000 | | | | 02/01/2036 | | | A1 | | | 7,920,000 | | | | 8,845,451 | |
KY State Property & Building #115 | | | 5.000 | | | | 04/01/2030 | | | A1 | | | 2,500,000 | | | | 2,907,975 | |
KY State Property & Building #115 | | | 5.000 | | | | 04/01/2033 | | | A1 | | | 4,565,000 | | | | 5,236,283 | |
KY State Property & Building #115 | | | 5.000 | | | | 04/01/2034 | | | A1 | | | 13,975,000 | | | | 15,965,040 | |
KY State Property & Building #115 | | | 5.000 | | | | 04/01/2036 | | | A1 | | | 14,460,000 | | | | 16,432,919 | |
KY State Property & Building #115 | | | 5.000 | | | | 04/01/2037 | | | A1 | | | 5,000,000 | | | | 5,685,500 | |
KY State Property & Building #117 | | | 5.000 | | | | 05/01/2031 | | | A1 | | | 5,055,000 | | | | 5,830,690 | |
KY State Property & Building #117 | | | 5.000 | | | | 05/01/2032 | | | A1 | | | 3,680,000 | | | | 4,224,787 | |
KY State Property & Building #117 | | | 5.000 | | | | 05/01/2033 | | | A1 | | | 3,550,000 | | | | 4,065,993 | |
KY State Property & Building #117 | | | 5.000 | | | | 05/01/2034 | | | A1 | | | 5,825,000 | | | | 6,667,761 | |
KY State Property & Building #117 | | | 5.000 | | | | 05/01/2035 | | | A1 | | | 5,065,000 | | | | 5,790,967 | |
KY State Property & Building #117 | | | 5.000 | | | | 05/01/2036 | | | A1 | | | 5,275,000 | | | | 6,023,997 | |
KY State Property & Building #119 | | | 5.000 | | | | 05/01/2030 | | | A1 | | | 3,685,000 | | | | 4,362,672 | |
KY State Property & Building #119 | | | 5.000 | | | | 05/01/2034 | | | A1 | | | 725,000 | | | | 875,583 | |
KY State Property & Building #119 | | | 5.000 | | | | 05/01/2035 | | | A1 | | | 10,000,000 | | | | 11,560,800 | |
KY State Property & Building #119 | | | 5.000 | | | | 05/01/2036 | | | A1 | | | 10,000,000 | | | | 11,537,900 | |
KY State Property & Building #119 | | | 5.000 | | | | 05/01/2037 | | | A1 | | | 500,000 | | | | 576,515 | |
KY State Property & Building #122 | | | 5.000 | | | | 11/01/2031 | | | A1 | | | 790,000 | | | | 971,803 | |
KY State Property & Building #122 | | | 5.000 | | | | 11/01/2033 | | | A1 | | | 1,000,000 | | | | 1,169,000 | |
KY State Property & Building #122 | | | 4.000 | | | | 11/01/2035 | | | A1 | | | 1,000,000 | | | | 1,094,090 | |
The accompanying footnotes are an integral part of the financial statements.
6
DUPREE MUTUAL FUNDS — KENTUCKY TAX-FREE INCOME SERIES
SCHEDULE OF PORTFOLIO INVESTMENTS
Kentucky Municipal Bonds
June 30, 2020
| | | | | | | | | | | | | | | | | | |
| Bond Description | | Coupon | | | Maturity
Date | | | Rating# | | Par Value | | | Fair Value | |
KY State Property & Building #122 | | | 4.000 | % | | | 11/01/2037 | | | A1 | | $ | 675,000 | | | $ | 753,435 | |
KY State Property & Building #122 | | | 4.000 | | | | 11/01/2038 | | | A1 | | | 5,345,000 | | | | 5,798,042 | |
KY State Property & Building #122 | | | 4.000 | | | | 11/01/2039 | | | A1 | | | 9,655,000 | | | | 10,443,620 | |
Lexington Fayette Urban County Government | | | 5.000 | | | | 01/01/2028 | | | Aa2 | | | 820,000 | | | | 962,483 | |
Lexington Fayette Urban County Government | | | 5.000 | | | | 01/01/2029 | | | Aa2 | | | 345,000 | | | | 404,447 | |
Lexington Fayette Urban County Government | | | 5.000 | | | | 01/01/2033 | | | Aa2 | | | 1,685,000 | | | | 1,966,462 | |
Louisville & Jefferson County Visitors & Convention Commission | | | 4.000 | | | | 06/01/2034 | | | Aa3 | | | 3,720,000 | | | | 3,987,059 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 261,306,596 | |
| SCHOOL IMPROVEMENT BONDS | | | | | | | | | | | | | | | | | | |
| 15.35% of Net Assets | | | | | | | | | | | | | | | | | | |
Bowling Green KY School District Finance Corporation | | | 4.000 | | | | 08/01/2034 | | | A1 | | | 1,890,000 | | | | 2,103,268 | |
Bowling Green KY School District Finance Corporation | | | 4.000 | | | | 08/01/2035 | | | A1 | | | 2,215,000 | | | | 2,458,251 | |
Bowling Green KY School District Finance Corporation | | | 4.000 | | | | 08/01/2036 | | | A1 | | | 2,305,000 | | | | 2,551,174 | |
Bowling Green KY School District Finance Corporation | | | 4.000 | | | | 08/01/2037 | | | A1 | | | 2,395,000 | | | | 2,650,786 | |
Bullitt County KY School District Finance Corporation | | | 4.000 | | | | 10/01/2035 | | | A1 | | | 1,820,000 | | | | 2,030,629 | |
Bullitt County KY School District Finance Corporation | | | 4.000 | | | | 10/01/2036 | | | A1 | | | 2,985,000 | | | | 3,321,171 | |
Bullitt County KY School District Finance Corporation | | | 4.000 | | | | 10/01/2037 | | | A1 | | | 3,075,000 | | | | 3,423,244 | |
Fayette County KY School District Finance Corporation | | | 5.000 | | | | 08/01/2028 | | | Aa3 | | | 1,330,000 | | | | 1,596,093 | |
Fayette County KY School District Finance Corporation | | | 5.000 | | | | 10/01/2028 | | | Aa3 | | | 1,375,000 | | | | 1,554,355 | |
Fayette County KY School District Finance Corporation | | | 5.000 | | | | 10/01/2029 | | | Aa3 | | | 3,660,000 | | | | 4,132,360 | |
Fayette County KY School District Finance Corporation | | | 5.000 | | | | 06/01/2031 | | | Aa3 | | | 3,705,000 | | | | 3,842,715 | |
Fayette County KY School District Finance Corporation | | | 4.750 | | | | 11/01/2031 | | | Aa3 | | | 1,730,000 | | | | 1,976,888 | |
Fayette County KY School District Finance Corporation | | | 5.000 | | | | 08/01/2032 | | | Aa3 | | | 10,600,000 | | | | 12,547,007 | |
Fayette County KY School District Finance Corporation | | | 5.000 | | | | 10/01/2032 | | | Aa3 | | | 3,615,000 | | | | 4,082,817 | |
Fayette County KY School District Finance Corporation | | | 5.000 | | | | 10/01/2033 | | | Aa3 | | | 4,385,000 | | | | 4,929,880 | |
Fayette County KY School District Finance Corporation | | | 5.000 | | | | 08/01/2034 | | | Aa3 | | | 8,750,000 | | | | 10,295,775 | |
Hardin County KY School District Finance Corporation | | | 4.000 | | | | 05/01/2030 | | | Aa3 | | | 635,000 | | | | 731,819 | |
Jefferson County KY School District Finance Corporation | | | 5.000 | | | | 04/01/2030 | | | Aa3 | | | 975,000 | | | | 1,144,172 | |
Jefferson County KY School District Finance Corporation | | | 4.000 | | | | 05/01/2030 | | | Aa3 | | | 2,000,000 | | | | 2,211,700 | |
Jefferson County KY School District Finance Corporation | | | 5.000 | | | | 04/01/2031 | | | Aa3 | | | 1,025,000 | | | | 1,199,742 | |
Jefferson County KY School District Finance Corporation | | | 5.000 | | | | 05/01/2032 | | | Aa3 | | | 4,230,000 | | | | 4,839,374 | |
Jefferson County KY School District Finance Corporation | | | 4.000 | | | | 06/01/2032 | | | Aa3 | | | 4,120,000 | | | | 4,671,297 | |
Jefferson County KY School District Finance Corporation | | | 5.000 | | | | 05/01/2033 | | | Aa3 | | | 5,145,000 | | | | 5,875,796 | |
Jefferson County KY School District Finance Corporation | | | 4.000 | | | | 06/01/2033 | | | Aa3 | | | 4,310,000 | | | | 4,865,947 | |
Jefferson County KY School District Finance Corporation | | | 4.750 | | | | 04/01/2034 | | | Aa3 | | | 1,165,000 | | | | 1,337,455 | |
Jefferson County KY School District Finance Corporation | | | 5.000 | | | | 05/01/2034 | | | Aa3 | | | 5,405,000 | | | | 6,161,808 | |
Jefferson County KY School District Finance Corporation | | | 4.000 | | | | 06/01/2034 | | | Aa3 | | | 3,500,000 | | | | 3,943,065 | |
Jefferson County KY School District Finance Corporation | | | 4.750 | | | | 04/01/2035 | | | Aa3 | | | 1,220,000 | | | | 1,393,972 | |
Jefferson County KY School District Finance Corporation | | | 4.250 | | | | 10/01/2037 | | | Aa3 | | | 2,110,000 | | | | 2,398,310 | |
Kenton County KY School District Finance Corporation | | | 4.000 | | | | 04/01/2036 | | | A1 | | | 1,210,000 | | | | 1,372,733 | |
Kenton County KY School District Finance Corporation | | | 4.000 | | | | 04/01/2037 | | | A1 | | | 1,255,000 | | | | 1,420,911 | |
Kenton County KY School District Finance Corporation | | | 4.000 | | | | 04/01/2038 | | | A1 | | | 1,300,000 | | | | 1,476,826 | |
Meade County KY School District Finance Corporation | | | 4.000 | | | | 06/01/2036 | | | A1 | | | 2,215,000 | | | | 2,461,109 | |
Meade County KY School District Finance Corporation | | | 4.000 | | | | 06/01/2037 | | | A1 | | | 2,255,000 | | | | 2,497,593 | |
Meade County KY School District Finance Corporation | | | 4.000 | | | | 06/01/2038 | | | A1 | | | 2,400,000 | | | | 2,649,720 | |
Morgan County KY School District Finance Corporation | | | 4.000 | | | | 08/01/2029 | | | A1 | | | 960,000 | | | | 1,106,112 | |
Oldham County KY School District Finance Corporation | | | 4.000 | | | | 10/01/2034 | | | A1 | | | 1,560,000 | | | | 1,731,818 | |
Scott County KY School District Finance Corporation | | | 4.500 | | | | 01/01/2025 | | | A1 | | | 4,890,000 | | | | 5,634,747 | |
Scott County KY School District Finance Corporation | | | 4.000 | | | | 02/01/2029 | | | Aa3 | | | 5,040,000 | | | | 6,083,028 | |
Scott County KY School District Finance Corporation | | | 4.000 | | | | 06/01/2035 | | | Aa3 | | | 1,440,000 | | | | 1,613,678 | |
Scott County KY School District Finance Corporation | | | 4.000 | | | | 10/01/2035 | | | Aa3 | | | 2,235,000 | | | | 2,516,051 | |
Scott County KY School District Finance Corporation | | | 4.000 | | | | 06/01/2036 | | | Aa3 | | | 1,500,000 | | | | 1,675,560 | |
Scott County KY School District Finance Corporation | | | 4.000 | | | | 10/01/2037 | | | Aa3 | | | 2,415,000 | | | | 2,705,042 | |
Shelby County KY School District Finance Corporation | | | 4.000 | | | | 08/01/2037 | | | Aa3 | | | 6,240,000 | | | | 6,974,448 | |
Shelby County KY School District Finance Corporation | | | 4.000 | | | | 08/01/2038 | | | Aa3 | | | 3,000,000 | | | | 3,345,810 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 149,536,056 | |
The accompanying footnotes are an integral part of the financial statements.
7
DUPREE MUTUAL FUNDS — KENTUCKY TAX-FREE INCOME SERIES
SCHEDULE OF PORTFOLIO INVESTMENTS
Kentucky Municipal Bonds
June 30, 2020
| | | | | | | | | | | | | | | | | | |
| Bond Description | | Coupon | | | Maturity
Date | | | Rating# | | Par Value | | | Fair Value | |
| UNIVERSITY CONSOLIDATED EDUCATION AND BUILDING REVENUE BONDS | | | | | | | | | | | |
| 12.52% of Net Assets | | | | | | | | | | | | | | | | | | |
Boyle County Centre College | | | 5.000 | % | | | 06/01/2037 | | | A3 | | $ | 2,865,000 | | | $ | 3,237,761 | |
KY Bond Development Corporation Educational Facilities Centre | | | 5.000 | | | | 06/01/2033 | | | A3 | | | 1,345,000 | | | | 1,562,137 | |
KY Bond Development Corporation Educational Facilities Centre | | | 5.000 | | | | 06/01/2034 | | | A3 | | | 1,605,000 | | | | 1,869,071 | |
KY Bond Development Corporation Educational Facilities Centre | | | 5.000 | | | | 06/01/2035 | | | A3 | | | 2,165,000 | | | | 2,509,495 | |
KY Bond Development Corporation Educational Facilities Centre | | | 5.000 | | | | 06/01/2036 | | | A3 | | | 2,835,000 | | | | 3,277,373 | |
KY Bond Development Corporation Educational Facilities Centre | | | 5.000 | | | | 06/01/2038 | | | A3 | | | 1,340,000 | | | | 1,542,930 | |
KY State Property & Building #114 | | | 5.000 | | | | 10/01/2032 | | | Aa3 | | | 2,795,000 | | | | 3,367,472 | |
KY State Property & Building #114 | | | 5.000 | | | | 10/01/2033 | | | Aa3 | | | 2,940,000 | | | | 3,540,230 | |
KY State Property & Building #114 | | | 5.000 | | | | 10/01/2034 | | | Aa3 | | | 3,090,000 | | | | 3,696,413 | |
KY State Property & Building #114 | | | 5.000 | | | | 10/01/2035 | | | Aa3 | | | 1,945,000 | | | | 2,307,665 | |
KY State Property & Building #116 | | | 5.000 | | | | 10/01/2035 | | | Aa3 | | | 4,165,000 | | | | 5,114,953 | |
KY State Property & Building #116 | | | 5.000 | | | | 10/01/2036 | | | Aa3 | | | 2,725,000 | | | | 3,319,486 | |
Murray State University | | | 5.000 | | | | 03/01/2032 | | | A1 | | | 2,220,000 | | | | 2,563,656 | |
University of Kentucky Certificate of Participation | | | 4.000 | | | | 05/01/2033 | | | Aa3 | | | 885,000 | | | | 1,041,796 | |
University of Kentucky Certificate of Participation | | | 4.000 | | | | 05/01/2034 | | | Aa3 | | | 1,020,000 | | | | 1,197,082 | |
University of Kentucky Certificate of Participation | | | 4.000 | | | | 05/01/2039 | | | Aa3 | | | 4,660,000 | | | | 5,366,503 | |
University of Kentucky Certificate of Participation | | | 4.000 | | | | 05/01/2044 | | | Aa3 | | | 3,755,000 | | | | 4,272,364 | |
University of Kentucky General Receipts | | | 5.000 | | | | 04/01/2030 | | | Aa2 | | | 5,490,000 | | | | 6,557,476 | |
University of Kentucky General Receipts | | | 5.000 | | | | 04/01/2036 | | | Aa2 | | | 6,390,000 | | | | 7,336,679 | |
University of Kentucky General Receipts | | | 4.000 | | | | 10/01/2036 | | | Aa2 | | | 16,160,000 | | | | 18,019,370 | |
University of Kentucky General Receipts | | | 5.000 | | | | 04/01/2037 | | | Aa2 | | | 7,180,000 | | | | 8,237,973 | |
University of Kentucky General Receipts | | | 5.000 | | | | 04/01/2038 | | | Aa2 | | | 7,395,000 | | | | 8,469,937 | |
University of Kentucky General Receipts | | | 4.000 | | | | 10/01/2038 | | | Aa2 | | | 10,855,000 | | | | 12,041,452 | |
University of Kentucky Higher Educational | | | 4.750 | | | | 04/01/2034 | | | Aa2 | | | 5,435,000 | | | | 6,271,936 | |
University of Louisville General Receipts | | | 5.000 | | | | 09/01/2030 | | | Baa1 | | | 440,000 | | | | 462,471 | |
University of Louisville General Receipts | | | 5.000 | | | | 09/01/2031 | | | Baa1 | | | 2,580,000 | | | | 2,712,689 | |
Western KY University | | | 4.000 | | | | 09/01/2034 | | | A1 | | | 575,000 | | | | 646,041 | |
Western KY University | | | 4.000 | | | | 09/01/2035 | | | A1 | | | 595,000 | | | | 667,037 | |
Western KY University | | | 4.000 | | | | 09/01/2036 | | | A1 | | | 620,000 | | | | 693,532 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 121,902,980 | |
| MUNICIPAL UTILITY REVENUE BONDS | | | | | | | | | | | | | | | | | | |
| 10.64% of Net Assets | | | | | | | | | | | | | | | | | | |
Campbell & Kenton County Sanitation District #1 | | | 4.000 | | | | 08/01/2032 | | | Aa2 | | | 6,100,000 | | | | 7,018,294 | |
Frankfort KY Electric & Water | | | 4.750 | | | | 12/01/2034 | | | AA* | | | 695,000 | | | | 795,393 | |
Frankfort KY Electric & Water | | | 4.750 | | | | 12/01/2035 | | | AA* | | | 725,000 | | | | 827,718 | |
Frankfort KY Electric & Water | | | 4.750 | | | | 12/01/2036 | | | AA* | | | 760,000 | | | | 863,831 | |
Frankfort KY Electric & Water | | | 4.750 | | | | 12/01/2037 | | | AA* | | | 800,000 | | | | 908,200 | |
Frankfort KY Electric & Water | | | 4.750 | | | | 12/01/2038 | | | AA* | | | 835,000 | | | | 946,022 | |
KY Rural Water Financing Corporation | | | 4.500 | | | | 02/01/2023 | | | A+* | | | 1,085,000 | | | | 1,191,363 | |
KY Rural Water Financing Corporation | | | 4.500 | | | | 02/01/2024 | | | A+* | | | 880,000 | | | | 969,135 | |
KY Rural Water Financing Corporation | | | 5.125 | | | | 02/01/2035 | | | A+* | | | 525,000 | | | | 526,071 | |
KY State Association of Counties Finance Corporation | | | 4.000 | | | | 02/01/2031 | | | AA-* | | | 405,000 | | | | 474,806 | |
KY State Association of Counties Finance Corporation | | | 4.000 | | | | 02/01/2033 | | | AA-* | | | 415,000 | | | | 481,060 | |
Louisville & Jefferson County Metropolitan Sewer | | | 4.000 | | | | 05/15/2030 | | | Aa3 | | | 3,120,000 | | | | 3,629,590 | |
Louisville & Jefferson County Metropolitan Sewer | | | 5.000 | | | | 05/15/2031 | | | Aa3 | | | 2,465,000 | | | | 2,741,499 | |
Louisville & Jefferson County Metropolitan Sewer | | | 4.000 | | | | 05/15/2033 | | | Aa3 | | | 1,000,000 | | | | 1,109,050 | |
Louisville & Jefferson County Metropolitan Sewer** | | | 5.000 | | | | 05/15/2034 | | | Aa3 | | | 27,730,000 | | | | 29,209,393 | |
Louisville & Jefferson County Metropolitan Sewer | | | 4.750 | | | | 05/15/2034 | | | Aa3 | | | 2,230,000 | | | | 2,536,759 | |
Louisville & Jefferson County Metropolitan Sewer | | | 5.000 | | | | 05/15/2034 | | | Aa3 | | | 4,595,000 | | | | 5,480,089 | |
Louisville & Jefferson County Metropolitan Sewer | | | 4.750 | | | | 05/15/2035 | | | Aa3 | | | 2,245,000 | | | | 2,545,673 | |
Louisville & Jefferson County Metropolitan Sewer | | | 5.000 | | | | 05/15/2035 | | | Aa3 | | | 4,825,000 | | | | 5,735,043 | |
Louisville & Jefferson County Metropolitan Sewer | | | 4.750 | | | | 05/15/2036 | | | Aa3 | | | 2,795,000 | | | | 3,165,533 | |
Louisville & Jefferson County Metropolitan Sewer | | | 4.000 | | | | 05/15/2037 | | | Aa3 | | | 10,000,000 | | | | 11,584,500 | |
Northern KY Water District | | | 5.000 | | | | 02/01/2026 | | | Aa2 | | | 1,000,000 | | | | 1,074,310 | |
Northern KY Water District | | | 5.000 | | | | 02/01/2027 | | | Aa2 | | | 4,315,000 | | | | 4,623,523 | |
Northern KY Water District | | | 5.000 | | | | 02/01/2033 | | | Aa2 | | | 3,580,000 | | | | 3,676,946 | |
Owensboro KY Electric Light & Power | | | 4.000 | | | | 01/01/2031 | | | A3 | | | 245,000 | | | | 280,202 | |
The accompanying footnotes are an integral part of the financial statements.
8
DUPREE MUTUAL FUNDS — KENTUCKY TAX-FREE INCOME SERIES
SCHEDULE OF PORTFOLIO INVESTMENTS
Kentucky Municipal Bonds
June 30, 2020
| | | | | | | | | | | | | | | | | | |
| Bond Description | | Coupon | | | Maturity
Date | | | Rating# | | Par Value | | | Fair Value | |
Owensboro KY Electric Light & Power | | | 4.000 | % | | | 01/01/2033 | | | A3 | | $ | 275,000 | | | $ | 310,349 | |
Owensboro KY Electric Light & Power | | | 4.000 | | | | 01/01/2034 | | | A3 | | | 305,000 | | | | 343,012 | |
Owensboro KY Electric Light & Power | | | 4.000 | | | | 01/01/2035 | | | A3 | | | 200,000 | | | | 223,760 | |
Owensboro KY Electric Light & Power | | | 4.000 | | | | 01/01/2036 | | | A3 | | | 325,000 | | | | 361,933 | |
Owensboro KY Electric Light & Power | | | 4.000 | | | | 01/01/2037 | | | A3 | | | 410,000 | | | | 455,539 | |
Owensboro KY Water Revenue | | | 4.000 | | | | 09/15/2034 | | | A1 | | | 2,075,000 | | | | 2,383,781 | |
Owensboro KY Water Revenue | | | 4.000 | | | | 09/15/2035 | | | A1 | | | 2,155,000 | | | | 2,470,966 | |
Owensboro KY Water Revenue | | | 4.000 | | | | 09/15/2037 | | | A1 | | | 1,950,000 | | | | 2,224,599 | |
Owensboro KY Water Revenue | | | 4.000 | | | | 09/15/2039 | | | A1 | | | 2,125,000 | | | | 2,411,981 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 103,579,923 | |
| TURNPIKES/TOLLROAD/HIGHWAY REVENUE BONDS | | | | | | | | | | | | | | | | | | |
| 7.59% of Net Assets | | | | | | | | | | | | | | | | | | |
KY Asset Liability Commission Federal Highway | | | 5.000 | | | | 09/01/2021 | | | A2 | | | 1,570,000 | | | | 1,582,136 | |
KY Asset Liability Commission Federal Highway | | | 5.000 | | | | 09/01/2022 | | | A2 | | | 3,500,000 | | | | 3,526,565 | |
KY Asset Liability Commission Federal Highway | | | 5.250 | | | | 09/01/2025 | | | A2 | | | 3,400,000 | | | | 3,869,098 | |
KY Asset Liability Commission Federal Highway | | | 5.000 | | | | 09/01/2027 | | | A2 | | | 9,760,000 | | | | 11,527,438 | |
KY State Turnpike Economic Development Road Revenue | | | 5.000 | | | | 07/01/2029 | | | Aa3 | | | 5,165,000 | | | | 5,352,645 | |
KY State Turnpike Economic Development Road Revenue | | | 5.000 | | | | 07/01/2029 | | | Aa3 | | | 7,235,000 | | | | 7,722,422 | |
KY State Turnpike Economic Development Road Revenue | | | 5.000 | | | | 07/01/2029 | | | Aa3 | | | 4,000,000 | | | | 4,705,280 | |
KY State Turnpike Economic Development Road Revenue | | | 5.000 | | | | 07/01/2030 | | | Aa3 | | | 1,845,000 | | | | 1,908,099 | |
KY State Turnpike Economic Development Road Revenue | | | 5.000 | | | | 07/01/2030 | | | Aa3 | | | 1,465,000 | | | | 1,560,093 | |
KY State Turnpike Economic Development Road Revenue** | | | 5.000 | | | | 07/01/2031 | | | Aa3 | | | 9,350,000 | | | | 9,972,242 | |
KY State Turnpike Economic Development Road Revenue | | | 5.000 | | | | 07/01/2032 | | | Aa3 | | | 1,315,000 | | | | 1,502,598 | |
KY State Turnpike Economic Development Road Revenue | | | 5.000 | | | | 07/01/2032 | | | Aa3 | | | 1,765,000 | | | | 2,086,636 | |
KY State Turnpike Economic Development Road Revenue | | | 5.000 | | | | 07/01/2032 | | | Aa3 | | | 8,755,000 | | | | 9,332,217 | |
KY State Turnpike Economic Development Road Revenue | | | 5.000 | | | | 07/01/2033 | | | Aa3 | | | 5,000,000 | | | | 5,481,050 | |
KY State Turnpike Economic Development Road Revenue | | | 5.000 | | | | 07/01/2034 | | | Aa3 | | | 2,370,000 | | | | 2,731,164 | |
KY State Turnpike Economic Development Road Revenue | | | 5.000 | | | | 07/01/2036 | | | Aa3 | | | 400,000 | | | | 462,484 | |
KY State Turnpike Economic Development Road Revenue | | | 5.000 | | | | 07/01/2037 | | | Aa3 | | | 500,000 | | | | 576,375 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 73,898,542 | |
| HOSPITAL AND HEALTHCARE REVENUE BONDS | | | | | | | | | | | | | | | | | | |
| 5.98% of Net Assets | | | | | | | | | | | | | | | | | | |
KY Development Corporation Hospital Facilities — St. Elizabeth | | | 4.000 | | | | 05/01/2032 | | | AA* | | | 1,810,000 | | | | 2,044,630 | |
KY Development Corporation Hospital Facilities — St. Elizabeth | | | 4.000 | | | | 05/01/2035 | | | AA* | | | 1,390,000 | | | | 1,544,818 | |
KY Development Corporation Hospital Facilities — St. Elizabeth | | | 4.000 | | | | 05/01/2036 | | | AA* | | | 1,200,000 | | | | 1,329,456 | |
KY Development Corporation Hospital Facilities — St. Elizabeth | | | 5.000 | | | | 05/01/2039 | | | AA* | | | 7,185,000 | | | | 8,457,535 | |
Lexington Fayette Urban County Government | | | 5.250 | | | | 06/01/2032 | | | A1 | | | 1,500,000 | | | | 1,549,335 | |
Lexington Fayette Urban County Government Healthcare | | | 5.250 | | | | 06/01/2028 | | | A1 | | | 1,000,000 | | | | 1,034,200 | |
Lexington Fayette Urban County Government Public Facilities | | | 5.000 | | | | 06/01/2033 | | | A1 | | | 5,260,000 | | | | 5,413,697 | |
Louisville & Jefferson County Norton Healthcare | | | 5.500 | | | | 10/01/2033 | | | A* | | | 2,000,000 | | | | 2,226,000 | |
Louisville & Jefferson County Norton Healthcare | | | 5.000 | | | | 10/01/2033 | | | A* | | | 6,810,000 | | | | 7,857,787 | |
Louisville & Jefferson County Norton Healthcare | | | 4.000 | | | | 10/01/2035 | | | A* | | | 3,850,000 | | | | 4,152,148 | |
Louisville & Jefferson County Norton Healthcare | | | 4.000 | | | | 10/01/2036 | | | A* | | | 7,005,000 | | | | 7,538,011 | |
Louisville & Jefferson County Norton Healthcare | | | 4.000 | | | | 10/01/2039 | | | A* | | | 4,500,000 | | | | 4,948,920 | |
Louisville & Jefferson County Norton Healthcare | | | 4.000 | | | | 10/01/2040 | | | A* | | | 2,000,000 | | | | 2,201,220 | |
Warren County KY Hospital | | | 5.000 | | | | 04/01/2028 | | | A+* | | | 6,225,000 | | | | 6,820,857 | |
Warren County KY Hospital | | | 5.000 | | | | 04/01/2035 | | | A+* | | | 1,025,000 | | | | 1,113,540 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 58,232,154 | |
| PUBLIC FACILITIES REVENUE BONDS | | | | | | | | | | | | | | | | | | |
| 5.76% of Net Assets | | | | | | | | | | | | | | | | | | |
Bracken County KY Public Property | | | 5.000 | | | | 08/01/2030 | | | A1 | | | 1,110,000 | | | | 1,166,777 | |
KY Bond Development | | | 5.000 | | | | 09/01/2035 | | | A2 | | | 1,275,000 | | | | 1,430,015 | |
KY Bond Development | | | 5.000 | | | | 09/01/2036 | | | A2 | | | 2,000,000 | | | | 2,237,080 | |
KY Bond Development | | | 5.000 | | | | 09/01/2038 | | | A2 | | | 1,125,000 | | | | 1,270,384 | |
KY State Certificate of Participation | | | 4.000 | | | | 04/15/2030 | | | A1 | | | 1,500,000 | | | | 1,767,510 | |
KY State Certificate of Participation | | | 4.000 | | | | 04/15/2031 | | | A1 | | | 1,350,000 | | | | 1,578,893 | |
KY State Certificate of Participation | | | 5.000 | | | | 06/15/2034 | | | A1 | | | 1,640,000 | | | | 1,908,173 | |
KY State Certificate of Participation | | | 5.000 | | | | 04/15/2038 | | | A1 | | | 5,000,000 | | | | 6,065,050 | |
The accompanying footnotes are an integral part of the financial statements.
9
DUPREE MUTUAL FUNDS — KENTUCKY TAX-FREE INCOME SERIES
SCHEDULE OF PORTFOLIO INVESTMENTS
Kentucky Municipal Bonds
June 30, 2020
| | | | | | | | | | | | | | | | | | |
| Bond Description | | Coupon | | | Maturity
Date | | | Rating# | | Par Value | | | Fair Value | |
KY State Certificate of Participation | | | 5.000 | % | | | 06/15/2038 | | | A1 | | $ | 7,535,000 | | | $ | 8,669,922 | |
Laurel County General Obligation | | | 4.000 | | | | 05/01/2031 | | | A2 | | | 1,295,000 | | | | 1,497,292 | |
Laurel County General Obligation | | | 4.000 | | | | 05/01/2034 | | | A2 | | | 1,440,000 | | | | 1,638,922 | |
Laurel County General Obligation | | | 4.000 | | | | 05/01/2035 | | | A2 | | | 1,495,000 | | | | 1,694,313 | |
Laurel County General Obligation | | | 4.000 | | | | 05/01/2036 | | | A2 | | | 1,555,000 | | | | 1,759,125 | |
Laurel County General Obligation | | | 4.000 | | | | 05/01/2037 | | | A2 | | | 1,620,000 | | | | 1,828,235 | |
Laurel County General Obligation | | | 4.000 | | | | 05/01/2038 | | | A2 | | | 1,680,000 | | | | 1,890,218 | |
Laurel County KY Judicial Center | | | 5.000 | | | | 03/01/2025 | | | A1 | | | 500,000 | | | | 583,545 | |
Louisville & Jefferson County Visitors & Convention Commission | | | 4.000 | | | | 06/01/2032 | | | Aa3 | | | 2,725,000 | | | | 2,940,763 | |
Marshall County Library | | | 4.000 | | | | 06/01/2038 | | | Aa3 | | | 1,060,000 | | | | 1,213,296 | |
Nicholasville KY General Obligation | | | 3.500 | | | | 05/01/2030 | | | AA* | | | 1,480,000 | | | | 1,675,730 | |
River City, Inc. Parking Authority | | | 4.750 | | | | 06/01/2027 | | | Aa3 | | | 750,000 | | | | 832,553 | |
River City, Inc. Parking Authority | | | 4.750 | | | | 06/01/2028 | | | Aa3 | | | 940,000 | | | | 1,044,613 | |
River City, Inc. Parking Authority | | | 4.750 | | | | 06/01/2029 | | | Aa3 | | | 1,160,000 | | | | 1,282,368 | |
River City, Inc. Parking Authority | | | 4.750 | | | | 06/01/2029 | | | Aa3 | | | 980,000 | | | | 1,083,380 | |
River City, Inc. Parking Authority | | | 4.750 | | | | 06/01/2030 | | | Aa3 | | | 1,025,000 | | | | 1,135,936 | |
River City, Inc. Parking Authority | | | 4.750 | | | | 06/01/2031 | | | Aa3 | | | 1,270,000 | | | | 1,405,903 | |
River City, Inc. Parking Authority | | | 5.000 | | | | 06/01/2031 | | | Aa3 | | | 1,080,000 | | | | 1,203,325 | |
River City, Inc. Parking Authority | | | 5.000 | | | | 06/01/2032 | | | Aa3 | | | 1,130,000 | | | | 1,257,306 | |
River City, Inc. Parking Authority | | | 5.000 | | | | 06/01/2033 | | | Aa3 | | | 1,395,000 | | | | 1,547,474 | |
Warren County KY Downtown Economic Development Authority | | | 5.000 | | | | 06/01/2038 | | | AA-* | | | 2,345,000 | | | | 2,472,404 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 56,080,505 | |
| REFUNDING BONDS | | | | | | | | | | | | | | | | | | |
| 5.64% of Net Assets | | | | | | | | | | | | | | | | | | |
KY State Property & Building #83 | | | 5.250 | | | | 10/01/2020 | | | A1 | | | 24,220,000 | | | | 24,468,012 | |
KY State Property & Building #84 | | | 5.000 | | | | 08/01/2021 | | | A1 | | | 310,000 | | | | 324,257 | |
KY State Property & Building #84 | | | 5.000 | | | | 08/01/2022 | | | A1 | | | 18,000,000 | | | | 19,470,960 | |
KY State Property & Building #102 | | | 5.000 | | | | 05/01/2024 | | | Aa3 | | | 405,000 | | | | 445,577 | |
KY State Property & Building #104 | | | 5.000 | | | | 11/01/2022 | | | A2 | | | 1,290,000 | | | | 1,399,457 | |
KY State Property & Building #108 | | | 5.000 | | | | 08/01/2025 | | | A1 | | | 2,690,000 | | | | 3,109,371 | |
KY State Property & Building #121 | | | 5.000 | | | | 02/01/2029 | | | A1 | | | 4,535,000 | | | | 5,672,378 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 54,890,012 | |
| PREREFUNDED BONDS | | | | | | | | | | | | | | | | | | |
| 3.68% of Net Assets | | | | | | | | | | | | | | | | | | |
Bracken County KY Public Property | | | 5.000 | | | | 08/01/2029 | | | A1 | | | 840,000 | | | | 882,395 | |
Franklin County KY Public Properties Justice Center | | | 5.000 | | | | 04/01/2029 | | | A1 | | | 2,630,000 | | | | 2,721,024 | |
Hardin County KY School District Finance Corporation | | | 5.000 | | | | 05/01/2030 | | | A1 | | | 450,000 | | | | 467,298 | |
Hardin County KY School District Finance Corporation | | | 5.000 | | | | 05/01/2031 | | | A1 | | | 470,000 | | | | 488,067 | |
KY State Property & Building #100 | | | 5.000 | | | | 08/01/2027 | | | A1 | | | 610,000 | | | | 639,420 | |
KY State Property & Building #100 | | | 5.000 | | | | 08/01/2030 | | | A1 | | | 9,980,000 | | | | 10,461,335 | |
KY State Property & Building #100 | | | 5.000 | | | | 08/01/2031 | | | A1 | | | 5,100,000 | | | | 5,345,973 | |
Lexington Fayette Urban County Airport Board | | | 5.000 | | | | 07/01/2030 | | | Aa2 | | | 1,250,000 | | | | 1,361,163 | |
Louisville & Jefferson County Catholic Health Initiatives** | | | 5.000 | | | | 12/01/2035 | | | NR | | | 11,290,000 | | | | 12,250,215 | |
Owensboro KY Public Property | | | 4.500 | | | | 04/01/2034 | | | A1 | | | 1,165,000 | | | | 1,202,117 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 35,819,007 | |
| AIRPORT REVENUE BONDS | | | | | | | | | | | | | | | | | | |
| 1.26% of Net Assets | | | | | | | | | | | | | | | | | | |
Kenton County Airport | | | 5.000 | | | | 01/01/2029 | | | A1 | | | 240,000 | | | | 284,767 | |
Kenton County Airport | | | 5.000 | | | | 01/01/2034 | | | A1 | | | 275,000 | | | | 340,912 | |
Kenton County Airport | | | 5.000 | | | | 01/01/2035 | | | A1 | | | 300,000 | | | | 370,578 | |
Kenton County Airport | | | 5.000 | | | | 01/01/2036 | | | A1 | | | 325,000 | | | | 400,319 | |
Kenton County Airport | | | 5.000 | | | | 01/01/2037 | | | A1 | | | 250,000 | | | | 307,060 | |
Kenton County Airport | | | 5.000 | | | | 01/01/2038 | | | A1 | | | 500,000 | | | | 612,370 | |
Kenton County Airport | | | 5.000 | | | | 01/01/2039 | | | A1 | | | 500,000 | | | | 610,630 | |
Kenton County Airport | | | 5.000 | | | | 01/01/2044 | | | A1 | | | 2,500,000 | | | | 3,016,475 | |
Lexington Fayette Urban County Airport Board | | | 5.000 | | | | 07/01/2028 | | | Aa2 | | | 1,170,000 | | | | 1,273,802 | |
Lexington Fayette Urban County Airport Board | | | 5.000 | | | | 07/01/2032 | | | Aa2 | | | 1,430,000 | | | | 1,558,071 | |
Lexington Fayette Urban County Airport Board | | | 5.000 | | | | 07/01/2033 | | | Aa2 | | | 1,520,000 | | | | 1,656,450 | |
The accompanying footnotes are an integral part of the financial statements.
10
DUPREE MUTUAL FUNDS — KENTUCKY TAX-FREE INCOME SERIES
SCHEDULE OF PORTFOLIO INVESTMENTS
Kentucky Municipal Bonds
June 30, 2020
| | | | | | | | | | | | | | | | | | |
| Bond Description | | Coupon | | | Maturity
Date | | | Rating# | | Par Value | | | Fair Value | |
Lexington Fayette Urban County Airport Board | | | 5.000 | % | | | 07/01/2038 | | | Aa2 | | $ | 1,720,000 | | | $ | 1,874,766 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 12,306,200 | |
| AD VALOREM PROPERTY BONDS | | | | | | | | | | | | | | | | | | |
| .14% of Net Assets | | | | | | | | | | | | | | | | | | |
Warren County General Obligation | | | 4.000 | | | | 06/01/2035 | | | Aa1 | | | 1,175,000 | | | | 1,349,053 | |
| | | | | | | | | | | | | | | | | | |
| STATE AND LOCAL MORTGAGE/HOUSING REVENUE BONDS | | | | | |
| .11% of Net Assets | | | | | | | | | | | | | | | | | | |
Greater KY Housing Assistance Corporation — Chenowith Woods | | | 6.100 | | | | 01/01/2024 | | | Baa2 | | | 180,000 | | | | 180,376 | |
KY Housing Corporation Country Place Apartments | | | 4.750 | | | | 04/20/2031 | | | AA+* | | | 935,000 | | | | 935,748 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 1,116,124 | |
| | | | | | | | | | | | | | | | | | |
Total Investments 95.50% of Net Assets (cost $880,801,642) (See (a) below for further explanation) | | | $ | 930,017,152 | |
| | | | | | | | | | | | | | | | | | |
Other assets in excess of liabilities 4.50% | | | | | | | | | | | | | | | | | 43,871,803 | |
| | | | | | | | | | | | | | | | | | |
Net Assets 100% | | | | | | | | | | | | | | | | $ | 973,888,955 | |
| | | | | | | | | | | | | | | | | | |
| | # | | Ratings by Moody’s Investors Service unless noted otherwise. |
| | | | Bond ratings are unaudited and not covered by Report of Independent Registered Public Accounting Firm. |
| | | | All ratings are as of the date indicated and do not reflect subsequent changes. |
| | * | | Rated by Standard & Poor’s Corporation |
| | @ | | Rated by Fitch’s Investors Service |
| | ** | | Security is segregated — see footnote 1(D) |
| (a) | | Cost for federal income tax purposes is $880,801,642 and net unrealized appreciation of investments is as follows: |
| | | | | | |
| | | | | | |
| | Unrealized appreciation | | $ | 50,036,727 | |
| | Unrealized depreciation | | | (821,217 | ) |
| | | | | | |
| | Net unrealized appreciation | | $ | 49,215,510 | |
| | | | | | |
Other Information
The following is a summary of the inputs used, as of June 30, 2020, involving the Fund’s investments in securities carried at fair value.
The inputs or methodology used for valuing securities may not be an indication of the risk associated with investing in those securities.
For more information on valuation inputs, and their aggregation into the levels used in the table below, please refer to the Security Valuation section in the accompanying Notes to Financial Statements.
| | | | | | |
| | | Valuation Inputs | | Municipal Bonds | |
Level 1 | | Quoted Prices | | $ | — | |
Level 2 | | Other Significant Observable Inputs | | | 930,017,152 | |
Level 3 | | Significant Unobservable Inputs | | | — | |
| | | | | | |
| | | | $ | 930,017,152 | |
| | | | | | |
The accompanying footnotes are an integral part of the financial statements.
11
KENTUCKY TAX-FREE INCOME SERIES
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2020
| | | | | | | | |
ASSETS: | | | | | | | | |
Investments in securities, at fair value (Cost: $880,801,642) | | | | | | $ | 930,017,152 | |
Cash | | | | | | | 36,477,342 | |
Receivable for fund shares sold | | | | | | | 270,646 | |
Interest receivable | | | | | | | 10,710,065 | |
| | | | | | | | |
Total assets | | | | | | | 977,475,205 | |
LIABILITIES: | | | | | | | | |
Payable for: | | | | | | | | |
Distributions to shareholders | | | 2,724,275 | | | | | |
Fund shares redeemed | | | 262,460 | | | | | |
Investment advisory fee | | | 297,019 | | | | | |
Transfer agent fee | | | 94,661 | | | | | |
Professional fees | | | 61,498 | | | | | |
Trustees fees | | | 44,130 | | | | | |
Custodian expense | | | 8,785 | | | | | |
Accrued expenses | | | 93,422 | | | | | |
| | | | | | | | |
Total liabilities | | | | | | | 3,586,250 | |
| | | | | | | | |
NET ASSETS: | | | | | | | | |
Capital | | | | | | | 924,517,934 | |
Total distributable earnings | | | | | | | 49,371,021 | |
| | | | | | | | |
Net assets at value | | | | | | $ | 973,888,955 | |
| | | | | | | | |
NET ASSET VALUE, offering price and redemption price per share
(123,946,588 shares outstanding; unlimited number of shares authorized; no par value) | | | | | | $ | 7.86 | |
| | | | | | | | |
STATEMENT OF OPERATIONS
For the year ended June 30, 2020
| | | | |
Net investment income: | | | | |
Interest income | | $ | 31,259,241 | |
| | | | |
Expenses: | | | | |
Investment advisory fee | | | 3,664,908 | |
Transfer agent fee | | | 1,172,016 | |
Professional fees | | | 238,005 | |
Trustees fees | | | 99,658 | |
Custodian expense | | | 88,250 | |
Pricing fees | | | 24,403 | |
Registration expense | | | 8,145 | |
Compliance fees | | | 7,320 | |
Other expenses | | | 140,835 | |
| | | | |
Total expenses | | | 5,443,540 | |
Custodian expense reduction | | | (3,162 | ) |
| | | | |
Net expenses | | | 5,440,378 | |
| | | | |
Net investment income | | | 25,818,863 | |
| | | | |
Realized and unrealized gain on investments: | | | | |
Net realized gain | | | 360,854 | |
Net change in unrealized appreciation/(depreciation) | | | 2,399,952 | |
| | | | |
Net realized and unrealized gain on investments | | | 2,760,806 | |
| | | | |
Net increase in net assets resulting from operations | | $ | 28,579,669 | |
| | | | |
The accompanying footnotes are an integral part of the financial statements.
12
KENTUCKY TAX-FREE INCOME SERIES
STATEMENTS OF CHANGES IN NET ASSETS
For the years ended June 30, 2020 and 2019
| | | | | | | | |
| | | 2020 | | | 2019 | |
Operations: | | | | | | | | |
Net investment income | | $ | 25,818,863 | | | $ | 27,074,947 | |
Net realized gain/(loss) on investments | | | 360,854 | | | | (207,093 | ) |
Net change in unrealized appreciation/(depreciation) | | | 2,399,952 | | | | 29,286,989 | |
| | | | | | | | |
Net increase in net assets resulting from operations | | | 28,579,669 | | | | 56,154,843 | |
Total distributions (Note 6) | | | (25,818,863 | ) | | | (28,683,622 | ) |
Net Fund share transactions (Note 4) | | | 1,864,092 | | | | (12,540,506 | ) |
| | | | | | | | |
Total increase | | | 4,624,898 | | | | 14,930,715 | |
Net assets: | | | | | | | | |
Beginning of year | | | 969,264,057 | | | | 954,333,342 | |
| | | | | | | | |
End of year | | $ | 973,888,955 | | | $ | 969,264,057 | |
| | | | | | | | |
FINANCIAL HIGHLIGHTS
| | | | | | | | | | | | | | | | | | | | |
| Selected data for a share outstanding: | | For the years ended June 30, | |
| | | 2020 | | | 2019 | | | 2018 | | | 2017 | | | 2016 | |
Net asset value, beginning of year | | | $7.83 | | | | $7.60 | | | | $7.76 | | | | $8.06 | | | | $7.83 | |
| | | | | | | | | | | | | | | | | | | | |
Income from investment operations: | | | | | | | | | | | | | | | | | | | | |
Net investment income | | | 0.21 | | | | 0.22 | | | | 0.23 | | | | 0.24 | | | | 0.25 | |
Net gains/(losses) on investments | | | 0.03 | | | | 0.24 | | | | (0.16 | ) | | | (0.30 | ) | | | 0.23 | |
| | | | | | | | | | | | | | | | | | | | |
Total from investment operations | | | 0.24 | | | | 0.46 | | | | 0.07 | | | | (0.06 | ) | | | 0.48 | |
Less distributions: | | | | | | | | | | | | | | | | | | | | |
Distributions from net investment income | | | (0.21 | ) | | | (0.22 | ) | | | (0.23 | ) | | | (0.24 | ) | | | (0.25 | ) |
Distributions from capital gains | | | 0.00 | | | | (0.01 | ) | | | 0.00 | (b) | | | 0.00 | (b) | | | 0.00 | (b) |
| | | | | | | | | | | | | | | | | | | | |
Total distributions | | | (0.21 | ) | | | (0.23 | ) | | | (0.23 | ) | | | (0.24 | ) | | | (0.25 | ) |
| | | | | | | | | | | | | | | | | | | | |
Net asset value, end of year | | | $7.86 | | | | $7.83 | | | | $7.60 | | | | $7.76 | | | | $8.06 | |
| | | | | | | | | | | | | | | | | | | | |
Total return | | | 3.08% | | | | 6.22% | | | | 0.93% | | | | (0.70 | )% | | | 6.25% | |
Net assets, end of year (in thousands) | | | $973,889 | | | | $969,264 | | | | $954,333 | | | | $990,213 | | | | $1,023,745 | |
Ratio of net expenses to average net assets (a) | | | 0.56% | | | | 0.57% | | | | 0.56% | | | | 0.55% | | | | 0.55% | |
Ratio of gross expenses to average net assets | | | 0.56% | | | | 0.57% | | | | 0.56% | | | | 0.55% | | | | 0.55% | |
Ratio of net investment income to average net assets | | | 2.66% | | | | 2.88% | | | | 2.98% | | | | 3.05% | | | | 3.15% | |
Portfolio turnover | | | 4.59% | | | | 10.23% | | | | 16.81% | | | | 10.44% | | | | 11.53% | |
| (a) | | Percentages are after custodian expense reduction for which no recovery will be sought. |
| (b) | | Rounds to less than $0.01. |
The accompanying footnotes are an integral part of the financial statements.
13
DUPREE MUTUAL FUNDS — KENTUCKY TAX-FREE SHORT-TO-MEDIUM SERIES
SCHEDULE OF PORTFOLIO INVESTMENTS
Kentucky Municipal Bonds
June 30, 2020
| | | | | | | | | | | | | | | | | | |
| Bond Description | | Coupon | | | Maturity
Date | | | Rating# | | Par Value | | | Fair Value | |
| SCHOOL IMPROVEMENT BONDS | | | | | | | | | | | | | | | | | | |
| 22.83% of Net Assets | | | | | | | | | | | | | | | | | | |
Barren County KY School District Finance Corporation** | | | 5.000 | % | | | 08/01/2022 | | | A1 | | $ | 1,055,000 | | | $ | 1,152,239 | |
Barren County KY School District Finance Corporation | | | 5.000 | | | | 08/01/2023 | | | A1 | | | 500,000 | | | | 567,990 | |
Bowling Green KY Independent School District Finance Corporation | | | 5.000 | | | | 08/01/2027 | | | A1 | | | 695,000 | | | | 851,841 | |
Bullitt County KY School District Finance Corporation | | | 5.000 | | | | 09/01/2022 | | | A1 | | | 300,000 | | | | 328,407 | |
Fayette County KY School District Finance Corporation | | | 5.000 | | | | 06/01/2023 | | | Aa3 | | | 500,000 | | | | 564,970 | |
Fayette County KY School District Finance Corporation** | | | 5.000 | | | | 08/01/2023 | | | Aa3 | | | 1,000,000 | | | | 1,135,980 | |
Hardin County KY School District Finance Corporation | | | 5.000 | | | | 03/01/2023 | | | A1 | | | 770,000 | | | | 857,626 | |
Jefferson County KY School District Finance Corporation | | | 4.000 | | | | 12/01/2023 | | | Aa3 | | | 500,000 | | | | 556,910 | |
Jessamine County KY School District Finance Corporation | | | 5.000 | | | | 02/01/2023 | | | A1 | | | 575,000 | | | | 639,038 | |
Laurel County KY School District Finance Corporation | | | 4.000 | | | | 06/01/2022 | | | A1 | | | 890,000 | | | | 945,367 | |
Laurel County KY School District Finance Corporation | | | 4.000 | | | | 06/01/2024 | | | A1 | | | 465,000 | | | | 516,968 | |
Pike County KY School District Finance Corporation | | | 5.000 | | | | 08/01/2024 | | | A1 | | | 250,000 | | | | 292,345 | |
Pike County KY School District Finance Corporation | | | 5.000 | | | | 02/01/2025 | | | A1 | | | 900,000 | | | | 1,065,852 | |
Pike County KY School District Finance Corporation | | | 5.000 | | | | 08/01/2025 | | | A1 | | | 200,000 | | | | 240,674 | |
Pike County KY School District Finance Corporation | | | 4.000 | | | | 02/01/2028 | | | A1 | | | 295,000 | | | | 335,731 | |
Warren County KY School District Finance Corporation | | | 4.000 | | | | 06/01/2022 | | | A1 | | | 725,000 | | | | 768,529 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 10,820,467 | |
| MISCELLANEOUS PUBLIC IMPROVEMENT BONDS | | | | | | | | | | | | | | | | | | |
| 20.35% of Net Assets | | | | | | | | | | | | | | | | | | |
KY State Property & Building #100 | | | 5.000 | | | | 08/01/2025 | | | A1 | | | 500,000 | | | | 524,450 | |
KY State Property & Building #106 | | | 5.000 | | | | 10/01/2021 | | | A1 | | | 750,000 | | | | 785,895 | |
KY State Property & Building #106 | | | 5.000 | | | | 10/01/2024 | | | A1 | | | 750,000 | | | | 849,465 | |
KY State Property & Building #106 | | | 5.000 | | | | 10/01/2025 | | | A1 | | | 2,365,000 | | | | 2,606,940 | |
KY State Property & Building #106** | | | 5.000 | | | | 10/01/2026 | | | A1 | | | 1,000,000 | | | | 1,100,970 | |
KY State Property & Building #108 | | | 5.000 | | | | 08/01/2023 | | | A1 | | | 875,000 | | | | 971,775 | |
KY State Property & Building #108 | | | 5.000 | | | | 08/01/2028 | | | A1 | | | 755,000 | | | | 860,080 | |
KY State Property & Building #110 | | | 5.000 | | | | 08/01/2023 | | | A1 | | | 1,750,000 | | | | 1,943,550 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 9,643,125 | |
| PUBLIC FACILITIES REVENUE BONDS | | | | | | | | | | | | | | | | | | |
| 16.37% of Net Assets | | | | | | | | | | | | | | | | | | |
KY State Certificate of Participation | | | 4.000 | | | | 06/15/2023 | | | A1 | | | 940,000 | | | | 1,031,537 | |
KY State Certificate of Participation | | | 4.000 | | | | 06/15/2024 | | | A1 | | | 300,000 | | | | 337,704 | |
KY State Property & Building #109** | | | 5.000 | | | | 10/01/2022 | | | A1 | | | 1,000,000 | | | | 1,083,720 | |
Laurel County KY Justice Center | | | 5.000 | | | | 03/01/2023 | | | A1 | | | 600,000 | | | | 661,548 | |
Lexington Fayette Urban County Government — Court Facilities | | | 5.000 | | | | 10/01/2024 | | | A1 | | | 700,000 | | | | 822,997 | |
Livingston County KY Public Properties | | | 5.000 | | | | 08/01/2022 | | | A1 | | | 500,000 | | | | 543,140 | |
Livingston County KY Public Properties | | | 5.000 | | | | 08/01/2024 | | | A1 | | | 555,000 | | | | 645,598 | |
River City Parking Authority | | | 5.000 | | | | 12/01/2024 | | | Aa3 | | | 340,000 | | | | 403,838 | |
Taylor County KY Public Courthouse | | | 4.000 | | | | 09/01/2027 | | | A1 | | | 700,000 | | | | 811,237 | |
Warren County KY Justice Center Expansion Corporation** | | | 5.000 | | | | 09/01/2023 | | | A1 | | | 1,250,000 | | | | 1,417,338 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 7,758,657 | |
| TURNPIKES/TOLLROAD/HIGHWAY REVENUE BONDS | | | | | | | | | | | | | | | | | | |
| 9.50% of Net Assets | | | | | | | | | | | | | | | | | | |
KY Asset Liability Commission Federal Highway | | | 5.000 | | | | 09/01/2024 | | | A2 | | | 500,000 | | | | 583,920 | |
KY Asset Liability Commission Federal Highway | | | 5.000 | | | | 09/01/2026 | | | A2 | | | 565,000 | | | | 655,304 | |
KY Asset Liability Project Notes | | | 4.000 | | | | 09/01/2023 | | | A2 | | | 250,000 | | | | 275,648 | |
KY State Turnpike Authority Economic Development | | | 5.000 | | | | 07/01/2024 | | | Aa3 | | | 1,175,000 | | | | 1,338,607 | |
KY State Turnpike Authority Economic Development | | | 5.000 | | | | 07/01/2026 | | | Aa3 | | | 1,385,000 | | | | 1,649,133 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 4,502,612 | |
| UNIVERSITY CONSOLIDATED EDUCATION AND BUILDING REVENUE BONDS | |
| 7.34% of Net Assets | | | | | | | | | | | | | | | | | | |
University of Kentucky General Receipts | | | 4.000 | | | | 04/01/2028 | | | Aa2 | | | 750,000 | | | | 833,835 | |
University of Louisville | | | 5.000 | | | | 03/01/2024 | | | A1 | | | 350,000 | | | | 393,705 | |
University of Louisville** | | | 5.000 | | | | 03/01/2024 | | | A1 | | | 2,000,000 | | | | 2,249,740 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 3,477,280 | |
The accompanying footnotes are an integral part of the financial statements.
14
DUPREE MUTUAL FUNDS — KENTUCKY TAX-FREE SHORT-TO-MEDIUM SERIES
SCHEDULE OF PORTFOLIO INVESTMENTS
Kentucky Municipal Bonds
June 30, 2020
| | | | | | | | | | | | | | | | | | |
| Bond Description | | Coupon | | | Maturity
Date | | | Rating# | | Par Value | | | Fair Value | |
| HOSPITAL AND HEALTHCARE REVENUE BONDS | | | | | | | | | | | | | | | | | | |
| 7.25% of Net Assets | | | | | | | | | | | | | | | | | | |
Lexington Fayette Urban County Government | | | 5.000 | % | | | 06/01/2024 | | | A1 | | $ | 2,800,000 | | | $ | 2,898,280 | |
Warren County Hospital | | | 5.000 | | | | 04/01/2023 | | | A+* | | | 500,000 | | | | 535,100 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 3,433,380 | |
| MUNICIPAL UTILITY REVENUE BONDS | | | | | | | | | | | | | | | | | | |
| 5.67% of Net Assets | | | | | | | | | | | | | | | | | | |
Campbell & Kenton Counties Sanitation District #1 | | | 4.000 | | | | 08/01/2031 | | | Aa2 | | | 1,000,000 | | | | 1,168,330 | |
Frankfort Electric & Water | | | 4.000 | | | | 12/01/2023 | | | AA* | | | 440,000 | | | | 489,922 | |
KY Rural Water Finance Corporation | | | 4.500 | | | | 08/01/2021 | | | A+* | | | 100,000 | | | | 100,186 | |
Northern KY Water | | | 5.000 | | | | 02/01/2026 | | | Aa2 | | | 815,000 | | | | 929,866 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 2,688,304 | |
| REFUNDING BONDS | | | | | | | | | | | | | | | | | | |
| 4.06% of Net Assets | | | | | | | | | | | | | | | | | | |
KY State Property & Building #104** | | | 5.000 | | | | 11/01/2021 | | | A2 | | | 1,000,000 | | | | 1,054,730 | |
KY State Property & Building #108 | | | 5.000 | | | | 08/01/2022 | | | A1 | | | 200,000 | | | | 215,566 | |
KY State Property & Building #112 | | | 5.000 | | | | 11/01/2026 | | | A1 | | | 555,000 | | | | 652,525 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 1,922,821 | |
| PREREFUNDED BONDS | | | | | | | | | | | | | | | | | | |
| 2.52% of Net Assets | | | | | | | | | | | | | | | | | | |
KY Infrastructure Authority Wastewater & Drinking Water | | | 5.000 | | | | 02/01/2025 | | | Aaa | | | 175,000 | | | | 187,976 | |
KY Turnpike Economic Development Road Revenue | | | 5.000 | | | | 07/01/2023 | | | Aa3 | | | 600,000 | | | | 651,726 | |
KY Turnpike Ecomonic Development Road Revenue** | | | 5.000 | | | | 07/01/2024 | | | Aa3 | | | 250,000 | | | | 260,903 | |
KY Turnpike Economic Development Road Revenue | | | 5.000 | | | | 07/01/2024 | | | Aa3 | | | 85,000 | | | | 92,328 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 1,192,933 | |
| AIRPORT REVENUE BONDS | | | | | | | | | | | | | | | | | | |
| 1.27% of Net Assets | | | | | | | | | | | | | | | | | | |
Kenton County Airport | | | 5.000 | | | | 01/01/2026 | | | A1 | | | 500,000 | | | | 604,140 | |
| | | | | | | | | | | | | | | | | | |
Total Investments 97.16% of Net Assets (cost $44,101,469) (See (a) below for further explanation) | | | | | | $ | 46,043,719 | |
| | | | | | | | | | | | | | | | | | |
Other assets in excess of liabilities 2.84% | | | | | | | | | | | | | | | | | 1,345,112 | |
| | | | | | | | | | | | | | | | | | |
Net Assets 100% | | | | | | | | | | | | | | | | $ | 47,388,831 | |
| | | | | | | | | | | | | | | | | | |
| | # | | Ratings by Moody’s Investors Service unless noted otherwise. |
| | | | Bond ratings are unaudited and not covered by Report of Independent Registered Public Accounting Firm. |
| | | | All ratings are as of the date indicated and do not reflect subsequent changes. |
| | * | | Rated by Standard & Poor’s Corporation |
| | @ | | Rated by Fitch’s Investors Service |
| | ** | | Security is segregated — see footnote 1(D) |
| (a) | | Cost for federal income tax purposes is $44,101,469 and net unrealized appreciation of investments is as follows: |
| | | | | | |
| | Unrealized appreciation | | $ | 1,942,250 | |
| | Unrealized depreciation | | | — | |
| | | | | | |
| | Net unrealized appreciation | | $ | 1,942,250 | |
| | | | | | |
Other Information
The following is a summary of the inputs used, as of June 30, 2020, involving the Fund’s investments in securities carried at fair value. The inputs or methodology used for valuing securities may not be an indication of the risk associated with investing in those securities. For more information on valuation inputs, and their aggregation into the levels used in the table below, please refer to the Security Valuation section in the accompanying Notes to Financial Statements.
| | | | | | |
| | | Valuation Inputs | | Municipal Bonds | |
| | | | | | |
Level 1 | | Quoted Prices | | $ | — | |
Level 2 | | Other Significant Observable Inputs | | | 46,043,719 | |
Level 3 | | Significant Unobservable Inputs | | | — | |
| | | | | | |
| | | | $ | 46,043,719 | |
| | | | | | |
The accompanying footnotes are an integral part of the financial statements.
15
KENTUCKY TAX-FREE SHORT-TO-MEDIUM SERIES
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2020
| | | | | | | | |
ASSETS: | | | | | | | | |
Investments in securities, at fair value (Cost: $44,101,469) | | | | | | $ | 46,043,719 | |
Cash | | | | | | | 829,826 | |
Interest receivable | | | | | | | 610,384 | |
| | | | | | | | |
Total assets | | | | | | | 47,483,929 | |
LIABILITIES: | | | | | | | | |
Payable for: | | | | | | | | |
Distributions to shareholders | | | 29,896 | | | | | |
Fund shares redeemed | | | 3,575 | | | | | |
Investment advisory fee | | | 16,035 | | | | | |
Transfer agent fee | | | 6,162 | | | | | |
Professional fees | | | 10,938 | | | | | |
Custodian expense | | | 4,635 | | | | | |
Trustees fees | | | 2,575 | | | | | |
Accrued expenses | | | 21,282 | | | | | |
| | | | | | | | |
Total liabilities | | | | | | | 95,098 | |
| | | | | | | | |
NET ASSETS: | | | | | | | | |
Capital | | | | | | | 45,560,767 | |
Total distributable earnings | | | | | | | 1,828,064 | |
| | | | | | | | |
Net assets at value | | | | | | $ | 47,388,831 | |
| | | | | | | | |
NET ASSET VALUE, offering price and redemption price per share
(8,752,466 shares outstanding; unlimited number of shares authorized; no par value) | | | | | | $ | 5.41 | |
| | | | | | | | |
STATEMENT OF OPERATIONS
For the year ended June 30, 2020
| | | | |
Net investment income: | |
Interest income | | $ | 1,223,092 | |
| | | | |
Expenses: | |
Investment advisory fee | | | 255,080 | |
Transfer agent fee | | | 67,219 | |
Professional fees | | | 14,756 | |
Compliance fees | | | 7,300 | |
Registration expense | | | 10,642 | |
Custodian expense | | | 15,575 | |
Pricing fees | | | 7,300 | |
Trustees fees | | | 6,112 | |
Other expenses | | | 15,819 | |
| | | | |
Total expenses | | | 399,803 | |
Fees waived by Adviser (Note 2) | | | (41,707 | ) |
Custodian expense reduction | | | (558 | ) |
| | | | |
Net expenses | | | 357,538 | |
| | | | |
Net investment income | | | 865,554 | |
| | | | |
Realized and unrealized gain on investments: | | | | |
Net realized gain | | | 146,952 | |
Net change in unrealized appreciation/(depreciation) | | | 399,130 | |
| | | | |
Net realized and unrealized gain on investments | | | 546,082 | |
| | | | |
Net increase in net assets resulting from operations | | $ | 1,411,636 | |
| | | | |
The accompanying footnotes are an integral part of the financial statements.
16
KENTUCKY TAX-FREE SHORT-TO-MEDIUM SERIES
STATEMENTS OF CHANGES IN NET ASSETS
For the years ended June 30, 2020 and 2019
| | | | | | | | |
| | | 2020 | | | 2019 | |
Operations: | | | | | | | | |
Net investment income | | $ | 865,554 | | | $ | 1,071,104 | |
Net realized gain/(loss) on investments | | | 146,952 | | | | (50,591 | ) |
Net change in unrealized appreciation/(depreciation) | | | 399,130 | | | | 1,547,024 | |
| | | | | | | | |
Net increase in net assets resulting from operations | | | 1,411,636 | | | | 2,567,537 | |
Total distributions (Note 6) | | | (865,554 | ) | | | (1,071,104 | ) |
Net Fund share transactions (Note 4) | | | (8,575,765 | ) | | | (8,723,711 | ) |
| | | | | | | | |
Total decrease | | | (8,029,683 | ) | | | (7,227,278 | ) |
Net assets: | | | | | | | | |
Beginning of year | | | 55,418,514 | | | | 62,645,792 | |
| | | | | | | | |
End of year | | $ | 47,388,831 | | | $ | 55,418,514 | |
| | | | | | | | |
FINANCIAL HIGHLIGHTS
| | | | | | | | | | | | | | | | | | | | |
| Selected data for a share outstanding: | | For the years ended June 30, | |
| | | 2020 | | | 2019 | | | 2018 | | | 2017 | | | 2016 | |
Net asset value, beginning of year | | $ | 5.36 | | | $ | 5.22 | | | $ | 5.33 | | | $ | 5.45 | | | $ | 5.35 | |
| | | | | | | | | | | | | | | | | | | | |
Income from investment operations: | | | | | | | | | | | | | | | | | | | | |
Net investment income | | | 0.09 | | | | 0.09 | | | | 0.09 | | | | 0.10 | | | | 0.11 | |
Net gains/(losses) on investments | | | 0.05 | | | | 0.14 | | | | (0.11 | ) | | | (0.12 | ) | | | 0.10 | |
| | | | | | | | | | | | | | | | | | | | |
Total from investment operations | | | 0.14 | | | | 0.23 | | | | (0.02 | ) | | | (0.02 | ) | | | 0.21 | |
Less distributions: | | | | | | | | | | | | | | | | | | | | |
Distributions from net investment income | | | (0.09 | ) | | | (0.09 | ) | | | (0.09 | ) | | | (0.10 | ) | | | (0.11 | ) |
| | | | | | | | | | | | | | | | | | | | |
Net asset value, end of year | | $ | 5.41 | | | $ | 5.36 | | | $ | 5.22 | | | $ | 5.33 | | | $ | 5.45 | |
| | | | | | | | | | | | | | | | | | | | |
Total return | | | 2.66% | | | | 4.56% | | | | (0.32 | )% | | | (0.44 | )% | | | 3.88% | |
Net assets, end of year (in thousands) | | $ | 47,389 | | | $ | 55,419 | | | $ | 62,646 | | | $ | 72,172 | | | $ | 85,169 | |
Ratio of net expenses to average net assets (a) | | | 0.70% | | | | 0.70% | | | | 0.70% | | | | 0.71% | | | | 0.72% | |
Ratio of gross expenses to average net assets | | | 0.78% | | | | 0.77% | | | | 0.75% | | | | 0.73% | | | | 0.72% | |
Ratio of net investment income to average net assets | | | 1.70% | | | | 1.81% | | | | 1.76% | | | | 1.79% | | | | 1.96% | |
Portfolio turnover | | | 2.75% | | | | 4.88% | | | | 4.69% | | | | 14.84% | | | | 26.49% | |
| (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. |
The accompanying footnotes are an integral part of the financial statements.
17
DUPREE MUTUAL FUNDS — MISSISSIPPI TAX-FREE INCOME SERIES
SCHEDULE OF PORTFOLIO INVESTMENTS
Mississippi Municipal Bonds
June 30, 2020
| | | | | | | | | | | | | | | | | | |
| Bond Description | | Coupon | | | Maturity
Date | | | Rating# | | Par Value | | | Fair Value | |
| UNIVERSITY CONSOLIDATED EDUCATION AND BUILDING REVENUE BONDS | | | | | |
| 25.46% of Net Assets | | | | | | | | | | | | | | | | | | |
Jackson State University Educational Building | | | 5.000 | % | | | 03/01/2034 | | | Aa2 | | $ | 440,000 | | | $ | 514,170 | |
Mississippi State University Educational Building | | | 5.000 | | | | 11/01/2032 | | | Aa2 | | | 125,000 | | | | 148,624 | |
MS Development Bank Special Obligation Gulf Coast Community Project** | | | 4.000 | | | | 12/01/2034 | | | AA-* | | | 300,000 | | | | 339,840 | |
MS Development Bank Special Obligation Northwest MS Community College | | | 4.000 | | | | 03/01/2039 | | | AA-* | | | 225,000 | | | | 257,148 | |
MS Development Bank Special Obligation Pearl River Community College | | | 5.000 | | | | 10/01/2033 | | | AA-* | | | 125,000 | | | | 157,843 | |
MS State University | | | 4.000 | | | | 08/01/2033 | | | Aa2 | | | 140,000 | | | | 162,016 | |
MS State University Educational Building Corporation Revenue | | | 5.000 | | | | 08/01/2033 | | | Aa2 | | | 225,000 | | | | 279,630 | |
MS State University Educational Building Corporation Revenue | | | 4.000 | | | | 08/01/2036 | | | Aa2 | | | 250,000 | | | | 287,510 | |
University of Mississippi Educational Building Corporation | | | 5.000 | | | | 10/01/2031 | | | Aa2 | | | 205,000 | | | | 249,307 | |
University Southern MS Educational Building Corporation | | | 5.000 | | | | 09/01/2033 | | | Aa2 | | | 360,000 | | | | 434,210 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 2,830,298 | |
| PREREFUNDED BONDS | | | | | | | | | | | | | | | | | | |
| 25.09% of Net Assets | | | | | | | | | | | | | | | | | | |
MS Development Bank Desoto County Highway | | | 5.000 | | | | 01/01/2030 | | | Aa3 | | | 100,000 | | | | 110,676 | |
MS Development Bank Special Obligation Canton | | | 5.750 | | | | 10/01/2031 | | | A2 | | | 370,000 | | | | 395,001 | |
MS Development Bank Special Obligation Hinds College | | | 5.000 | | | | 04/01/2036 | | | A2 | | | 250,000 | | | | 258,848 | |
MS Development Bank Special Obligation Jones County Rest Home | | | 5.250 | | | | 04/01/2028 | | | A2 | | | 120,000 | | | | 124,472 | |
MS Development Bank Special Obligation Lowndes County | | | 5.125 | | | | 12/01/2027 | | | AA* | | | 135,000 | | | | 137,734 | |
MS Development Bank Special Obligation Marshall County | | | 5.000 | | | | 01/01/2028 | | | Aa3 | | | 200,000 | | | | 214,052 | |
MS State Capital Improvement Projects | | | 5.000 | | | | 10/01/2029 | | | Aa2 | | | 145,000 | | | | 153,439 | |
MS State Capital Improvement Projects | | | 5.000 | | | | 10/01/2036 | | | Aa2 | | | 180,000 | | | | 190,593 | |
MS State University Educational Building Corporation Revenue | | | 5.000 | | | | 08/01/2036 | | | Aa2 | | | 175,000 | | | | 184,030 | |
MS State University Educational Building Corporation Revenue** | | | 5.250 | | | | 08/01/2038 | | | Aa2 | | | 300,000 | | | | 345,282 | |
Southern Mississippi Educational Building Corporation | | | 5.000 | | | | 03/01/2038 | | | Aa2 | | | 600,000 | | | | 674,406 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 2,788,533 | |
| MUNICIPAL UTILITY REVENUE BONDS | | | | | | | | | | | | | | | | | | |
| 10.59% of Net Assets | | | | | | | | | | | | | | | | | | |
MS Development Bank Special Obligation Hattiesburg Water & Sewer | | | 4.750 | | | | 12/01/2038 | | | AA* | | | 700,000 | | | | 763,307 | |
MS Development Bank Special Obligation Jackson Water & Sewer | | | 6.875 | | | | 12/01/2040 | | | A3 | | | 150,000 | | | | 176,005 | |
MS Development Bank Special Obligation Tupelo | | | 5.000 | | | | 05/01/2033 | | | Aa2 | | | 150,000 | | | | 180,251 | |
MS Development Bank Special Obligation West Jackson County Utility District | | | 5.000 | | | | 12/01/2033 | | | A* | | | 50,000 | | | | 56,761 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 1,176,324 | |
| TURNPIKES/TOLLROAD/HIGHWAY REVENUE BONDS | | | | | | | | | | | | | | | | | | |
| 8.13% of Net Assets | | | | | | | | | | | | | | | | | | |
MS Development Bank Special Obligation Highway Construction | | | 5.000 | | | | 01/01/2025 | | | Aa3 | | | 200,000 | | | | 237,956 | |
MS Development Bank Special Obligation Highway Construction | | | 5.000 | | | | 01/01/2029 | | | Aa3 | | | 300,000 | | | | 373,656 | |
MS Development Bank Special Obligation Highway Construction | | | 4.000 | | | | 01/01/2030 | | | Aa3 | | | 175,000 | | | | 203,660 | |
MS Development Bank Special Obligation Marshall County | | | 5.000 | | | | 01/01/2030 | | | Aa3 | | | 75,000 | | | | 87,599 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 902,871 | |
| PUBLIC FACILITIES REVENUE BONDS | | | | | | | | | | | | | | | | | | |
| 7.21% of Net Assets | | | | | | | | | | | | | | | | | | |
MS Development Bank Special Obligation Brandon Public Improvement** | | | 4.000 | | | | 08/01/2033 | | | AA* | | | 300,000 | | | | 343,842 | |
MS Development Bank Special Obligation Brandon Public Improvement | | | 5.000 | | | | 11/01/2033 | | | Aa3 | | | 150,000 | | | | 171,618 | |
MS Development Bank Special Obligation Brandon Public Improvement | | | 4.000 | | | | 08/01/2035 | | | AA* | | | 150,000 | | | | 170,984 | |
MS Development Bank Special Obligation Hinds County | | | 4.000 | | | | 11/01/2035 | | | Aa3 | | | 100,000 | | | | 114,315 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 800,759 | |
| SCHOOL IMPROVEMENT BONDS | | | | | | | | | | | | | | | | | | |
| 5.48% of Net Assets | | | | | | | | | | | | | | | | | | |
MS Development Bank Special Obligation Canton School District | | | 5.000 | | | | 12/01/2033 | | | A1 | | | 100,000 | | | | 119,243 | |
MS Development Bank Special Obligation Jackson Schools | | | 5.000 | | | | 04/01/2028 | | | A+* | | | 225,000 | | | | 247,500 | |
MS Development Bank Special Obligation Rankin School District | | | 4.000 | | | | 06/01/2038 | | | AA* | | | 100,000 | | | | 113,555 | |
MS Development Bank Special Obligation Vicksburg Warren School District | | | 5.500 | | | | 03/01/2038 | | | AA* | | | 100,000 | | | | 128,463 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 608,761 | |
The accompanying footnotes are an integral part of the financial statements.
18
DUPREE MUTUAL FUNDS — MISSISSIPPI TAX-FREE INCOME SERIES
SCHEDULE OF PORTFOLIO INVESTMENTS
Mississippi Municipal Bonds
June 30, 2020
| | | | | | | | | | | | | | | | | | |
| Bond Description | | Coupon | | | Maturity
Date | | | Rating# | | Par Value | | | Fair Value | |
| REFUNDING BONDS | | | | | | | | | | | | | | | | | | |
| 4.74% of Net Assets | | | | | | | | | | | | | | | | | | |
MS State Refunding | | | 5.000 | % | | | 10/01/2033 | | | Aa2 | | $ | 150,000 | | | $ | 188,411 | |
MS State Refunding | | | 4.000 | | | | 10/01/2036 | | | Aa2 | | | 290,000 | | | | 338,122 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 526,533 | |
| AD VALOREM PROPERTY BONDS | | | | | | | | | | | | | | | | | | |
| 3.85% of Net Assets | | | | | | | | | | | | | | | | | | |
MS Development Bank Special Obligation Hinds County Schools | | | 5.000 | | | | 03/01/2043 | | | Aa3 | | | 350,000 | | | | 427,364 | |
| | | | | | | | | | | | | | | | | | |
| MISCELLANEOUS PUBLIC IMPROVEMENT BONDS | | | | | | | | | | | | | | | | | | |
| 3.71% of Net Assets | | | | | | | | | | | | | | | | | | |
Mississippi State Gaming Tax Revenue | | | 5.000 | | | | 10/15/2035 | | | A3 | | | 125,000 | | | | 136,376 | |
Mississippi State Gaming Tax Revenue | | | 5.000 | | | | 10/15/2037 | | | A+* | | | 125,000 | | | | 146,328 | |
MS Development Bank Special Obligation Rankin County | | | 5.000 | | | | 08/01/2034 | | | Aa1 | | | 100,000 | | | | 129,526 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 412,230 | |
| HOSPITAL AND HEALTHCARE REVENUE BONDS | | | | | | | | | | | | | | | | | | |
| 1.85% of Net Assets | | | | | | | | | | | | | | | | | | |
Medical Center Educational Building Corporation MS Revenue | | | 5.500 | | | | 12/01/2023 | | | Aa2 | | | 75,000 | | | | 81,883 | |
Medical Center Educational Building Corporation MS Revenue | | | 5.000 | | | | 06/01/2035 | | | Aa2 | | | 100,000 | | | | 123,842 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 205,725 | |
| | | | | | | | | | | | | | | | | | |
Total Investments 96.11% of Net Assets (cost $9,977,320) (See (a) below for further explanation) | | | $ | 10,679,398 | |
| | | | | | | | | | | | | | | | | | |
Other assets in excess of liabilities 3.89% | | | | | | | | | | | | | | | | | 431,692 | |
| | | | | | | | | | | | | | | | | | |
Net Assets 100% | | | | | | | | | | | | | | | | $ | 11,111,090 | |
| | | | | | | | | | | | | | | | | | |
| | # | | Ratings by Moody’s Investors Service unless noted otherwise. |
| | | | Bond ratings are unaudited and not covered by Report of Independent Registered Public Accounting Firm. |
| | | | All ratings are as of the date indicated and do not reflect subsequent changes. |
| | * | | Rated by Standard & Poor’s Corporation |
| | @ | | Rated by Fitch’s Investors Service |
| | ** | | Security is segregated — see footnote 1(D) |
| (a) | | Cost for federal income tax purposes is $9,977,320 and net unrealized appreciation of investments is as follows: |
| | | | | | |
| | Unrealized appreciation | | $ | 707,136 | |
| | Unrealized depreciation | | | (5,058 | ) |
| | | | | | |
| | Net unrealized appreciation | | $ | 702,078 | |
| | | | | | |
Other Information
The following is a summary of the inputs used, as of June 30, 2020, involving the Fund’s investments in securities carried at fair value. The inputs or methodology used for valuing securities may not be an indication of the risk associated with investing in those securities. For more information on valuation inputs, and their aggregation into the levels used in the table below, please refer to the Security Valuation section in the accompanying Notes to Financial Statements.
| | | | | | |
| | | Valuation Inputs | | Municipal Bonds | |
Level 1 | | Quoted Prices | | $ | — | |
Level 2 | | Other Significant Observable Inputs | | | 10,679,398 | |
Level 3 | | Significant Unobservable Inputs | | | — | |
| | | | | | |
| | | | $ | 10,679,398 | |
| | | | | | |
The accompanying footnotes are an integral part of the financial statements.
19
MISSISSIPPI TAX-FREE INCOME SERIES
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2020
| | | | | | | | |
ASSETS: | | | | | | | | |
Investments in securities, at fair value (Cost: $9,977,320) | | | | | | $ | 10,679,398 | |
Cash | | | | | | | 366,415 | |
Interest receivable | | | | | | | 128,927 | |
| | | | | | | | |
Total assets | | | | | | | 11,174,740 | |
LIABILITIES: | | | | | | | | |
Payable for: | | | | | | | | |
Distributions to shareholders | | | 41,175 | | | | | |
Fund shares redeemed | | | 3,237 | | | | | |
Investment advisory fee | | | 1,944 | | | | | |
Transfer agent fee | | | 3,009 | | | | | |
Professional fees | | | 4,414 | | | | | |
Custodian expense | | | 3,080 | | | | | |
Trustee fees | | | 795 | | | | | |
Accrued expenses | | | 5,996 | | | | | |
| | | | | | | | |
Total liabilities | | | | | | | 63,650 | |
| | | | | | | | |
NET ASSETS: | | | | | | | | |
Capital | | | | | | | 10,387,741 | |
Total distributable earnings | | | | | | | 723,349 | |
| | | | | | | | |
Net assets at value | | | | | | $ | 11,111,090 | |
| | | | | | | | |
NET ASSET VALUE, offering price and redemption price per share
(898,247 shares outstanding; unlimited number of shares authorized; no par value) | | | | | | $ | 12.37 | |
| | | | | | | | |
STATEMENT OF OPERATIONS
For the year ended June 30, 2020
| | | | |
Net investment income: | | | | |
Interest income | | $ | 352,692 | |
| | | | |
Expenses: | | | | |
Investment advisory fee | | | 54,915 | |
Transfer agent fee | | | 16,474 | |
Registration fees | | | 10,489 | |
Compliance expense | | | 7,020 | |
Custodian expense | | | 7,877 | |
Pricing expense | | | 4,011 | |
Professional fees | | | 3,123 | |
Trustees fees | | | 1,293 | |
Other expenses | | | 3,421 | |
| | | | |
Total expenses | | | 108,623 | |
Fees waived by Adviser (Note 2) | | | (31,217 | ) |
Custodian expense reduction | | | (282 | ) |
| | | | |
Net expenses | | | 77,124 | |
| | | | |
Net investment income | | | 275,568 | |
| | | | |
Realized and unrealized gain on investments: | | | | |
Net realized gain | | | 34,775 | |
Net change in unrealized appreciation/(depreciation) | | | 99,042 | |
| | | | |
Net realized and unrealized gain on investments | | | 133,817 | |
| | | | |
Net increase in net assets resulting from operations | | $ | 409,385 | |
| | | | |
The accompanying footnotes are an integral part of the financial statements.
20
MISSISSIPPI TAX-FREE INCOME SERIES
STATEMENTS OF CHANGES IN NET ASSETS
For the years ended June 30, 2020 and 2019
| | | | | | | | |
| | | 2020 | | | 2019 | |
Operations: | | | | | | | | |
Net investment income | | $ | 275,568 | | | $ | 306,958 | |
Net realized gain on investments | | | 34,775 | | | | 4,783 | |
Net change in unrealized appreciation/(depreciation) | | | 99,042 | | | | 260,698 | |
| | | | | | | | |
Net increase in net assets resulting from operations | | | 409,385 | | | | 572,439 | |
Total distributions (Note 6) | | | (289,777 | ) | | | (307,238 | ) |
Net Fund share transactions (Note 4) | | | (333,019 | ) | | | (555,782 | ) |
| | | | | | | | |
Total decrease | | | (213,411 | ) | | | (290,581 | ) |
Net assets: | | | | | | | | |
Beginning of year | | | 11,324,501 | | | | 11,615,082 | |
| | | | | | | | |
End of year | | $ | 11,111,090 | | | $ | 11,324,501 | |
| | | | | | | | |
FINANCIAL HIGHLIGHTS
| | | | | | | | | | | | | | | | | | | | |
| Selected data for a share outstanding: | | For the years ended June 30, | |
| | | 2020 | | | 2019 | | | 2018 | | | 2017 | | | 2016 | |
Net asset value, beginning of year | | $ | 12.21 | | | $ | 11.92 | | | $ | 12.14 | | | $ | 12.55 | | | $ | 12.03 | |
| | | | | | | | | | | | | | | | | | | | |
Income from investment operations: | | | | | | | | | | | | | | | | | | | | |
Net investment income | | | 0.31 | | | | 0.33 | | | | 0.33 | | | | 0.34 | | | | 0.36 | |
Net gains/(losses) on investments | | | 0.18 | | | | 0.29 | | | | (0.22 | ) | | | (0.41 | ) | | | 0.52 | |
| | | | | | | | | | | | | | | | | | | | |
Total from investment operations | | | 0.49 | | | | 0.62 | | | | 0.11 | | | | (0.07 | ) | | | 0.88 | |
Less distributions: | | | | | | | | | | | | | | | | | | | | |
Distributions from net investment income | | | (0.31 | ) | | | (0.33 | ) | | | (0.33 | ) | | | (0.34 | ) | | | (0.36 | ) |
Distributions from capital gains | | | (0.02 | )(b) | | | 0.00 | (b) | | | 0.00 | (b) | | | 0.00 | (b) | | | 0.00 | |
| | | | | | | | | | | | | | | | | | | | |
Total distributions | | | (0.33 | ) | | | (0.33 | ) | | | (0.33 | ) | | | (0.34 | ) | | | (0.36 | ) |
| | | | | | | | | | | | | | | | | | | | |
Net asset value, end of year | | $ | 12.37 | | | $ | 12.21 | | | $ | 11.92 | | | $ | 12.14 | | | $ | 12.55 | |
| | | | | | | | | | | | | | | | | | | | |
Total return | | | 4.01% | | | | 5.29% | | | | 0.99% | | | | (0.48 | )% | | | 7.49% | |
Net assets, end of year (in thousands) | | $ | 11,111 | | | $ | 11,325 | | | $ | 11,615 | | | $ | 12,448 | | | $ | 11,505 | |
Ratio of net expenses to average net assets (a) | | | 0.70% | | | | 0.70% | | | | 0.70% | | | | 0.70% | | | | 0.70% | |
Ratio of gross expenses to average net assets | | | 0.99% | | | | 0.97% | | | | 0.92% | | | | 0.85% | | | | 0.88% | |
Ratio of net investment income to average net assets | | | 2.51% | | | | 2.75% | | | | 2.75% | | | | 2.80% | | | | 2.97% | |
Portfolio turnover | | | 10.26% | | | | 4.65% | | | | 7.26% | | | | 14.06% | | | | 3.26% | |
| (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. |
| (b) | | Rounds to less than $0.01. |
The accompanying footnotes are an integral part of the financial statements.
21
DUPREE MUTUAL FUNDS — NORTH CAROLINA TAX-FREE INCOME SERIES
SCHEDULE OF PORTFOLIO INVESTMENTS
North Carolina Municipal Bonds
June 30, 2020
| | | | | | | | | | | | | | | | | | |
| Bond Description | | Coupon | | | Maturity
Date | | | Rating# | | Par Value | | | Fair Value | |
| UNIVERSITY CONSOLIDATED EDUCATION AND BUILDING REVENUE BONDS | | | | | | | | | | | |
| 20.72% of Net Assets | | | | | | | | | | | | | | | | | | |
Appalachian NC State University | | | 4.000 | % | | | 05/01/2033 | | | A1 | | $ | 500,000 | | | $ | 567,916 | |
Appalachian NC State University | | | 5.000 | | | | 05/01/2036 | | | A1 | | | 1,000,000 | | | | 1,204,490 | |
Iredell County NC Community College | | | 5.000 | | | | 04/01/2026 | | | Aa1 | | | 225,000 | | | | 225,520 | |
Iredell County NC Community College | | | 5.000 | | | | 04/01/2027 | | | Aa1 | | | 325,000 | | | | 325,744 | |
NC State Capital Facilities Davidson College | | | 5.000 | | | | 03/01/2032 | | | AA+* | | | 310,000 | | | | 332,838 | |
NC State Capital Facilities Duke University | | | 5.000 | | | | 10/01/2041 | | | Aa1 | | | 2,000,000 | | | | 2,469,520 | |
NC State Capital Facilities Finance Agency Davidson College | | | 4.750 | | | | 03/01/2035 | | | AA+* | | | 1,000,000 | | | | 1,063,640 | |
NC State Capital Facilities Wake Forest | | | 5.000 | | | | 01/01/2048 | | | Aa3 | | | 315,000 | | | | 383,475 | |
NC State University at Raleigh | | | 5.000 | | | | 10/01/2042 | | | Aa1 | | | 750,000 | | | | 845,768 | |
Scotland County NC | | | 5.000 | | | | 12/01/2033 | | | A* | | | 250,000 | | | | 307,473 | |
University of NC at Asheville | | | 4.000 | | | | 06/01/2036 | | | A1 | | | 1,350,000 | | | | 1,545,804 | |
University of NC at Charlotte Board of Governors | | | 4.000 | | | | 10/01/2037 | | | Aa3 | | | 750,000 | | | | 855,675 | |
University of NC at Charlotte Board of Governors | | | 5.000 | | | | 10/01/2042 | | | Aa3 | | | 250,000 | | | | 300,768 | |
University of NC at Wilmington | | | 4.000 | | | | 10/01/2037 | | | Aa3 | | | 750,000 | | | | 885,833 | |
University of NC Chapel Hill Hospitals | | | 4.000 | | | | 02/01/2037 | | | Aa3 | | | 1,000,000 | | | | 1,147,700 | |
University of NC Chapel Hill Hospitals | | | 4.000 | | | | 02/01/2038 | | | Aa3 | | | 400,000 | | | | 456,384 | |
University of NC Charlotte | | | 5.000 | | | | 04/01/2035 | | | Aa3 | | | 595,000 | | | | 680,073 | |
University of NC Charlotte | | | 4.000 | | | | 10/01/2035 | | | Aa3 | | | 250,000 | | | | 287,050 | |
University of NC Charlotte | | | 4.000 | | | | 10/01/2036 | | | Aa3 | | | 250,000 | | | | 285,955 | |
University of NC Charlotte | | | 5.000 | | | | 04/01/2038 | | | Aa3 | | | 1,000,000 | | | | 1,130,360 | |
University of NC Charlotte | | | 5.000 | | | | 04/01/2040 | | | Aa3 | | | 2,650,000 | | | | 3,081,813 | |
University of NC Charlotte | | | 5.000 | | | | 04/01/2043 | | | Aa3 | | | 1,500,000 | | | | 1,693,185 | |
University of NC Greensboro | | | 5.000 | | | | 04/01/2033 | | | Aa3 | | | 900,000 | | | | 1,026,891 | |
University of NC Greensboro | | | 4.000 | | | | 04/01/2035 | | | Aa3 | | | 750,000 | | | | 865,358 | |
University of NC Greensboro | | | 4.000 | | | | 04/01/2036 | | | Aa3 | | | 500,000 | | | | 574,960 | |
University of NC Greensboro | | | 5.000 | | | | 04/01/2038 | | | Aa3 | | | 425,000 | | | | 521,267 | |
University of NC Greensboro | | | 5.000 | | | | 04/01/2039 | | | Aa3 | | | 2,870,000 | | | | 3,225,105 | |
University of NC Wilmington | | | 4.000 | | | | 04/01/2037 | | | Aa3 | | | 385,000 | | | | 455,008 | |
University of NC Wilmington | | | 4.000 | | | | 04/01/2038 | | | Aa3 | | | 405,000 | | | | 477,208 | |
University of NC Wilmington | | | 4.000 | | | | 04/01/2039 | | | Aa3 | | | 1,380,000 | | | | 1,606,596 | |
University of NC Wilmington Limited Obligation | | | 5.000 | | | | 06/01/2033 | | | A1 | | | 550,000 | | | | 621,148 | |
University of NC Wilmington Limited Obligation | | | 4.000 | | | | 06/01/2034 | | | A1 | | | 500,000 | | | | 539,590 | |
University of North Carolina | | | 5.000 | | | | 10/01/2033 | | | A3 | | | 30,000 | | | | 30,065 | |
Western Carolina University | | | 5.000 | | | | 10/01/2035 | | | Aa3 | | | 1,000,000 | | | | 1,248,600 | |
Western Carolina University | | | 5.000 | | | | 10/01/2043 | | | Aa3 | | | 1,000,000 | | | | 1,224,890 | |
Western Carolina University | | | 5.000 | | | | 10/01/2045 | | | Aa3 | | | 825,000 | | | | 953,593 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 33,447,263 | |
| SCHOOL IMPROVEMENT BONDS | | | | | | | | | | | | | | | | | | |
| 17.25% of Net Assets | | | | | | | | | | | | | | | | | | |
Brunswick County NC Limited Obligation | | | 5.000 | | | | 06/01/2030 | | | Aa2 | | | 250,000 | | | | 299,480 | |
Brunswick County NC Limited Obligation | | | 5.000 | | | | 06/01/2031 | | | Aa2 | | | 250,000 | | | | 299,480 | |
Buncombe County NC Limited Obligation | | | 4.000 | | | | 06/01/2036 | | | Aa1 | | | 125,000 | | | | 148,753 | |
Burke County NC Limited Obligation | | | 4.000 | | | | 04/01/2034 | | | Aa3 | | | 250,000 | | | | 289,123 | |
Cabarrus County NC | | | 4.000 | | | | 06/01/2034 | | | Aa2 | | | 795,000 | | | | 921,190 | |
Cabarrus County NC Limited Obligation | | | 5.000 | | | | 04/01/2035 | | | Aa2 | | | 1,435,000 | | | | 1,713,419 | |
Cabarrus County NC Limited Obligation | | | 4.000 | | | | 06/01/2035 | | | Aa2 | | | 1,650,000 | | | | 1,901,378 | |
Chatham County NC Limited Obligation | | | 4.000 | | | | 11/01/2036 | | | Aa2 | | | 750,000 | | | | 879,083 | |
Chatham County NC Limited Obligation | | | 4.000 | | | | 11/01/2037 | | | Aa2 | | | 2,000,000 | | | | 2,337,460 | |
Davidson County NC Limited Obligation | | | 5.000 | | | | 06/01/2032 | | | Aa2 | | | 500,000 | | | | 607,610 | |
Duplin County NC Limited Obligation | | | 5.000 | | | | 04/01/2032 | | | A2 | | | 750,000 | | | | 888,240 | |
Duplin County NC Limited Obligation | | | 5.000 | | | | 04/01/2034 | | | A2 | | | 865,000 | | | | 1,020,268 | |
Henderson County NC Limited Obligation | | | 4.000 | | | | 06/01/2034 | | | Aa2 | | | 200,000 | | | | 233,624 | |
Henderson County NC Limited Obligation | | | 4.000 | | | | 06/01/2037 | | | Aa2 | | | 1,275,000 | | | | 1,516,013 | |
Henderson County NC Limited Obligation | | | 4.000 | | | | 06/01/2038 | | | Aa2 | | | 1,060,000 | | | | 1,256,164 | |
Onslow County NC Limited Obligation | | | 5.000 | | | | 06/01/2033 | | | Aa2 | | | 500,000 | | | | 596,830 | |
Pitt County NC Limited Obligation | | | 4.000 | | | | 04/01/2031 | | | Aa2 | | | 500,000 | | | | 584,085 | |
The accompanying footnotes are an integral part of the financial statements.
22
DUPREE MUTUAL FUNDS — NORTH CAROLINA TAX-FREE INCOME SERIES
SCHEDULE OF PORTFOLIO INVESTMENTS
North Carolina Municipal Bonds
June 30, 2020
| | | | | | | | | | | | | | | | | | |
| Bond Description | | Coupon | | | Maturity
Date | | | Rating# | | Par Value | | | Fair Value | |
Pitt County NC Limited Obligation | | | 4.000 | % | | | 04/01/2034 | | | Aa2 | | $ | 550,000 | | | $ | 631,763 | |
Randolph County NC Limited Obligation | | | 4.000 | | | | 10/01/2037 | | | Aa3 | | | 250,000 | | | | 297,383 | |
Randolph County NC Limited Obligation | | | 4.000 | | | | 10/01/2039 | | | Aa3 | | | 250,000 | | | | 295,745 | |
Rutherford County NC Limited Obligation | | | 4.000 | | | | 03/01/2037 | | | A1 | | | 410,000 | | | | 487,711 | |
Rutherford County NC Limited Obligation | | | 4.000 | | | | 03/01/2039 | | | A1 | | | 500,000 | | | | 590,885 | |
Rutherford County NC Limited Obligation | | | 4.000 | | | | 03/01/2040 | | | A1 | | | 325,000 | | | | 381,882 | |
Sampson County NC Limited Obligation | | | 5.000 | | | | 12/01/2033 | | | A1 | | | 1,975,000 | | | | 2,339,131 | |
Sampson County NC Limited Obligation | | | 5.000 | | | | 09/01/2040 | | | A1 | | | 750,000 | | | | 903,458 | |
Scotland County NC | | | 4.500 | | | | 12/01/2036 | | | A* | | | 1,170,000 | | | | 1,398,601 | |
Surry County NC Limited Obligation | | | 4.000 | | | | 06/01/2034 | | | Aa3 | | | 350,000 | | | | 418,919 | |
Surry County NC Limited Obligation | | | 4.000 | | | | 06/01/2036 | | | Aa3 | | | 590,000 | | | | 698,112 | |
Surry County NC Limited Obligation | | | 4.000 | | | | 06/01/2037 | | | Aa3 | | | 730,000 | | | | 861,123 | |
Wake County NC Limited Obligation | | | 4.000 | | | | 09/01/2037 | | | Aa1 | | | 750,000 | | | | 882,638 | |
Wayne County NC | | | 4.000 | | | | 06/01/2034 | | | Aa3 | | | 1,500,000 | | | | 1,743,435 | |
Wilkes County NC Limited Obligation | | | 5.000 | | | | 06/01/2031 | | | A1 | | | 350,000 | | | | 415,559 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 27,838,545 | |
| PUBLIC FACILITIES REVENUE BONDS | | | | | | | | | | | | | | | | | | |
| 14.30% of Net Assets | | | | | | | | | | | | | | | | | | |
Charlotte NC Certificate of Participation | | | 4.000 | | | | 12/01/2034 | | | Aa1 | | | 290,000 | | | | 325,989 | |
Charlotte NC Certificate of Participation | | | 4.000 | | | | 06/01/2036 | | | Aa2 | | | 1,000,000 | | | | 1,179,620 | |
Charlotte NC Certificate of Participation | | | 4.000 | | | | 06/01/2037 | | | Aa2 | | | 3,000,000 | | | | 3,533,460 | |
Charlotte NC Certificate of Participation Convention Facility Project | | | 4.000 | | | | 06/01/2037 | | | Aa2 | | | 500,000 | | | | 583,535 | |
Charlotte NC Certificate of Participation Convention Facility Project | | | 4.000 | | | | 06/01/2039 | | | Aa2 | | | 1,000,000 | | | | 1,153,800 | |
Davidson County NC Limited Obligation | | | 4.000 | | | | 06/01/2037 | | | Aa2 | | | 200,000 | | | | 239,404 | |
Davidson County NC Limited Obligation | | | 4.000 | | | | 06/01/2038 | | | Aa2 | | | 240,000 | | | | 286,805 | |
Davidson County NC Limited Obligation | | | 4.000 | | | | 06/01/2040 | | | Aa2 | | | 635,000 | | | | 752,513 | |
Durham Capital Financing Corporation | | | 4.000 | | | | 06/01/2036 | | | Aa1 | | | 300,000 | | | | 361,218 | |
Durham Capital Financing Corporation | | | 4.000 | | | | 06/01/2037 | | | Aa1 | | | 270,000 | | | | 324,281 | |
Durham Capital Financing Corporation | | | 4.000 | | | | 06/01/2038 | | | Aa1 | | | 250,000 | | | | 299,005 | |
Durham NC Limited Obligation | | | 4.000 | | | | 04/01/2036 | | | Aa1 | | | 1,000,000 | | | | 1,163,220 | |
Forsyth County NC Limited Tax | | | 5.000 | | | | 04/01/2031 | | | Aa1 | | | 335,000 | | | | 359,559 | |
Harnett County NC Limited Obligation | | | 4.000 | | | | 10/01/2038 | | | Aa3 | | | 1,055,000 | | | | 1,234,340 | |
Henderson County NC Limited Obligation | | | 5.000 | | | | 10/01/2030 | | | Aa2 | | | 250,000 | | | | 300,335 | |
Henderson County NC Limited Obligation | | | 5.000 | | | | 10/01/2031 | | | Aa2 | | | 500,000 | | | | 598,405 | |
Johnston County NC Limited Obligation^ | | | 4.000 | | | | 04/01/2035 | | | Aa2 | | | 360,000 | | | | 433,040 | |
Johnston County NC Limited Obligation^ | | | 4.000 | | | | 04/01/2037 | | | Aa2 | | | 975,000 | | | | 1,165,096 | |
Kannapolis NC Limited Obligation | | | 5.000 | | | | 04/01/2032 | | | A1 | | | 500,000 | | | | 568,720 | |
Onslow County NC Limited Obligation | | | 5.000 | | | | 06/01/2032 | | | Aa2 | | | 500,000 | | | | 599,230 | |
Orange County NC | | | 4.000 | | | | 10/01/2036 | | | Aa1 | | | 375,000 | | | | 446,779 | |
Orange County NC | | | 4.000 | | | | 10/01/2037 | | | Aa1 | | | 375,000 | | | | 445,721 | |
Orange County NC | | | 4.000 | | | | 10/01/2038 | | | Aa1 | | | 275,000 | | | | 325,575 | |
Orange County NC | | | 4.000 | | | | 10/01/2038 | | | Aa1 | | | 765,000 | | | | 908,560 | |
Orange County NC | | | 4.000 | | | | 10/01/2039 | | | Aa1 | | | 200,000 | | | | 235,850 | |
Raleigh NC Limited Obligation | | | 5.000 | | | | 10/01/2034 | | | Aa1 | | | 1,420,000 | | | | 1,637,940 | |
Raleigh NC Limited Obligation | | | 5.000 | | | | 10/01/2038 | | | Aa1 | | | 500,000 | | | | 575,130 | |
Randolph County NC Limited Obligation | | | 4.000 | | | | 10/01/2036 | | | Aa3 | | | 250,000 | | | | 298,798 | |
Randolph County NC Limited Obligation | | | 4.000 | | | | 10/01/2037 | | | Aa3 | | | 250,000 | | | | 296,680 | |
Randolph County NC Limited Obligation | | | 4.000 | | | | 10/01/2038 | | | Aa3 | | | 670,000 | | | | 793,220 | |
Randolph County NC Limited Obligation | | | 4.000 | | | | 10/01/2039 | | | Aa3 | | | 500,000 | | | | 590,555 | |
Thomasville NC Revenue | | | 4.000 | | | | 05/01/2036 | | | Aa3 | | | 500,000 | | | | 584,830 | |
Wilmington NC Limited Obligation | | | 4.000 | | | | 06/01/2036 | | | Aa1 | | | 230,000 | | | | 274,165 | |
Wilmington NC Limited Obligation | | | 4.000 | | | | 06/01/2037 | | | Aa1 | | | 170,000 | | | | 201,965 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 23,077,343 | |
| MUNICIPAL UTILITY REVENUE BONDS | | | | | | | | | | | | | | | | | | |
| 9.50% of Net Assets | | | | | | | | | | | | | | | | | | |
Brunswick County NC Enterprise System Revenue | | | 5.000 | | | | 04/01/2031 | | | Aa3 | | | 500,000 | | | | 588,780 | |
Brunswick County NC Enterprise System Revenue | | | 4.000 | | | | 04/01/2039 | | | Aa3 | | | 1,000,000 | | | | 1,168,580 | |
Buncombe County NC Metropolitan Sewer District | | | 5.000 | | | | 07/01/2039 | | | Aaa | | | 550,000 | | | | 637,048 | |
The accompanying footnotes are an integral part of the financial statements.
23
DUPREE MUTUAL FUNDS — NORTH CAROLINA TAX-FREE INCOME SERIES
SCHEDULE OF PORTFOLIO INVESTMENTS
North Carolina Municipal Bonds
June 30, 2020
| | | | | | | | | | | | | | | | | | |
| Bond Description | | Coupon | | | Maturity
Date | | | Rating# | | Par Value | | | Fair Value | |
Cary NC Combined Enterprise System Revenue | | | 4.000 | % | | | 12/01/2042 | | | Aaa | | $ | 750,000 | | | $ | 862,425 | |
Concord NC Utilities System Revenue | | | 4.500 | | | | 12/01/2034 | | | Aa2 | | | 1,000,000 | | | | 1,168,080 | |
Fuquay-Varina NC Combined Utilities Revenue | | | 5.000 | | | | 04/01/2040 | | | Aa2 | | | 1,000,000 | | | | 1,183,710 | |
Gastonia NC Combined Utilities System Revenue | | | 5.000 | | | | 05/01/2034 | | | Aa2 | | | 570,000 | | | | 671,169 | |
Gastonia NC Combined Utilities System Revenue | | | 5.000 | | | | 05/01/2035 | | | Aa2 | | | 250,000 | | | | 293,603 | |
Greensboro NC Enterprise System Revenue | | | 4.000 | | | | 06/01/2045 | | | Aa1 | | | 1,000,000 | | | | 1,188,030 | |
High Point NC Combined Enterprise | | | 5.000 | | | | 11/01/2039 | | | Aa2 | | | 750,000 | | | | 878,723 | |
Martin County NC Limited Obligation Water and Sewer District | | | 4.750 | | | | 06/01/2034 | | | A2 | | | 1,150,000 | | | | 1,302,065 | |
NC Municipal Power Agency #1 Catawba Electric Revenue | | | 5.000 | | | | 01/01/2030 | | | A* | | | 500,000 | | | | 601,375 | |
NC Municipal Power Agency #1 Catawba Electric Revenue | | | 5.000 | | | | 01/01/2032 | | | A* | | | 500,000 | | | | 591,520 | |
Sampson County NC Water & Sewer District | | | 5.000 | | | | 06/01/2037 | | | A1 | | | 920,000 | | | | 1,083,132 | |
Union County NC Enterprise System Revenue | | | 4.000 | | | | 06/01/2038 | | | Aa1 | | | 500,000 | | | | 591,620 | |
Union County NC Enterprise System Revenue | | | 4.000 | | | | 06/01/2044 | | | Aa1 | | | 415,000 | | | | 479,923 | |
Wake County NC Industrial Facilities & Pollution Control Duke Energy | | | 4.000 | | | | 06/01/2041 | | | Aa3 | | | 1,260,000 | | | | 1,327,070 | |
Wilmington NC Storm Water Revenue | | | 5.000 | | | | 06/01/2028 | | | AA+* | | | 115,000 | | | | 115,342 | |
Wilmington NC Storm Water Revenue | | | 5.000 | | | | 06/01/2035 | | | Aa2 | | | 500,000 | | | | 594,710 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 15,326,905 | |
| PREREFUNDED BONDS | | | | | | | | | | | | | | | | | | |
| 7.86% of Net Assets | | | | | | | | | | | | | | | | | | |
Buncombe County NC Limited Obligation | | | 5.000 | | | | 06/01/2030 | | | Aa1 | | | 250,000 | | | | 272,370 | |
Buncombe County NC Limited Obligation | | | 5.000 | | | | 06/01/2032 | | | Aa1 | | | 250,000 | | | | 272,370 | |
Durham Capital Financing Corporation | | | 4.000 | | | | 06/01/2043 | | | Aa1 | | | 1,000,000 | | | | 1,103,770 | |
Durham Capital Financing Corporation Limited Obligation | | | 5.000 | | | | 06/01/2034 | | | Aa1 | | | 500,000 | | | | 566,220 | |
Jacksonville Public Facilities Corporation Limited Obligation | | | 5.000 | | | | 04/01/2031 | | | Aa3 | | | 265,000 | | | | 286,611 | |
Jacksonville Public Facilities Corporation Limited Obligation | | | 5.000 | | | | 04/01/2032 | | | Aa3 | | | 100,000 | | | | 108,155 | |
Johnston County NC Installment Financing Contract | | | 5.000 | | | | 10/15/2027 | | | Aa2 | | | 570,000 | | | | 577,820 | |
Nash County NC Limited Obligation** | | | 5.000 | | | | 10/01/2030 | | | Aa3 | | | 1,140,000 | | | | 1,152,936 | |
NC Eastern Municipal Power Agency | | | 6.000 | | | | 01/01/2025 | | | AAA@ | | | 1,150,000 | | | | 1,429,531 | |
NC Eastern Municipal Power Agency | | | 6.000 | | | | 01/01/2026 | | | AAA@ | | | 275,000 | | | | 298,095 | |
NC Municipal Power Agency #1 Catawba Electric Revenue | | | 5.000 | | | | 01/01/2031 | | | A2 | | | 500,000 | | | | 534,895 | |
NC State Medical Care Commission Duke University Health | | | 5.000 | | | | 06/01/2035 | | | Aa2 | | | 500,000 | | | | 543,830 | |
NC State Medical Care Commission Health Care Facilities Vidant Health | | | 5.000 | | | | 06/01/2036 | | | A2 | | | 1,000,000 | | | | 1,088,670 | |
Orange County NC Public Facilities Company Limited Obligation | | | 4.750 | | | | 10/01/2032 | | | Aa1 | | | 750,000 | | | | 824,873 | |
University of NC Charlotte | | | 5.000 | | | | 04/01/2031 | | | Aa3 | | | 750,000 | | | | 811,163 | |
University of NC Greensboro | | | 5.000 | | | | 04/01/2031 | | | Aa3 | | | 500,000 | | | | 540,955 | |
University of NC Greensboro | | | 5.000 | | | | 04/01/2036 | | | Aa3 | | | 500,000 | | | | 540,955 | |
Watauga NC Public Facilities Corporation Limited Obligation | | | 5.000 | | | | 06/01/2027 | | | Aa3 | | | 750,000 | | | | 816,503 | |
Winston Salem NC Limited Obligation | | | 5.000 | | | | 06/01/2031 | | | Aa1 | | | 800,000 | | | | 908,456 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 12,678,178 | |
| REFUNDING BONDS | | | | | | | | | | | | | | | | | | |
| 7.86% of Net Assets | | | | | | | | | | | | | | | | | | |
Buncombe County NC Limited Obligation** | | | 5.000 | | | | 06/01/2035 | | | Aa1 | | | 1,000,000 | | | | 1,171,590 | |
Charlotte NC Certificate of Participation | | | 5.000 | | | | 06/01/2026 | | | Aa1 | | | 1,455,000 | | | | 1,458,550 | |
Charlotte NC Certificate of Participation | | | 5.000 | | | | 06/01/2027 | | | Aa1 | | | 775,000 | | | | 776,868 | |
Charlotte NC Certificate of Participation | | | 5.000 | | | | 06/01/2033 | | | Aa1 | | | 840,000 | | | | 941,858 | |
Charlotte NC Certificate of Participation | | | 5.000 | | | | 06/01/2034 | | | Aa1 | | | 750,000 | | | | 881,033 | |
Chatham County NC | | | 5.000 | | | | 11/01/2032 | | | Aa2 | | | 825,000 | | | | 992,244 | |
Dare County NC Limited Obligation Refunding | | | 5.000 | | | | 06/01/2029 | | | Aa3 | | | 100,000 | | | | 108,968 | |
Durham County NC | | | 4.000 | | | | 06/01/2036 | | | Aaa | | | 225,000 | | | | 270,131 | |
Monroe NC Limited Obligation | | | 4.000 | | | | 03/01/2033 | | | Aa3 | | | 255,000 | | | | 291,460 | |
Monroe NC Limited Obligation** | | | 5.000 | | | | 03/01/2039 | | | Aa3 | | | 1,250,000 | | | | 1,483,175 | |
New Hanover County NC Limited Obligation | | | 5.000 | | | | 12/01/2027 | | | Aa1 | | | 505,000 | | | | 559,968 | |
Pitt County NC Certificate of Participation | | | 5.000 | | | | 04/01/2027 | | | Aa2 | | | 500,000 | | | | 540,590 | |
Rockingham County NC Limited Obligation | | | 5.000 | | | | 04/01/2027 | | | Aa3 | | | 250,000 | | | | 297,838 | |
Rockingham County NC Limited Obligation | | | 4.500 | | | | 04/01/2032 | | | Aa3 | | | 500,000 | | | | 573,500 | |
Sampson County NC Limited Obligation | | | 4.000 | | | | 09/01/2036 | | | A1 | | | 1,000,000 | | | | 1,145,160 | |
Sampson County NC Limited Obligation | | | 4.000 | | | | 09/01/2037 | | | A1 | | | 500,000 | | | | 571,135 | |
Thomasville NC Combined Enterprise System Revenue | | | 4.750 | | | | 05/01/2028 | | | A1 | | | 435,000 | | | | 464,106 | |
The accompanying footnotes are an integral part of the financial statements.
24
DUPREE MUTUAL FUNDS — NORTH CAROLINA TAX-FREE INCOME SERIES
SCHEDULE OF PORTFOLIO INVESTMENTS
North Carolina Municipal Bonds
June 30, 2020
| | | | | | | | | | | | | | | | | | |
| Bond Description | | Coupon | | | Maturity
Date | | | Rating# | | Par Value | | | Fair Value | |
Union County NC Limited Obligation Refunding | | | 5.000 | % | | | 12/01/2024 | | | Aa1 | | $ | 125,000 | | | $ | 149,314 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 12,677,488 | |
| HOSPITAL AND HEALTHCARE REVENUE BONDS | | | | | | | | | | | | | | | | | | |
| 6.91% of Net Assets | | | | | | | | | | | | | | | | | | |
Charlotte Mecklenburg NC Hospital Authority Atrium Health | | | 5.000 | | | | 01/15/2036 | | | Aa3 | | | 590,000 | | | | 732,526 | |
Charlotte Mecklenburg NC Hospital Healthcare System | | | 5.000 | | | | 01/15/2039 | | | Aa3 | | | 1,500,000 | | | | 1,614,840 | |
Charlotte Mecklenburg NC Hospital Authority | | | 5.000 | | | | 01/15/2033 | | | Aa3 | | | 210,000 | | | | 263,928 | |
NC State Medical Care Commission | | | 4.000 | | | | 07/01/2039 | | | A2 | | | 550,000 | | | | 622,881 | |
NC State Medical Care Commission Health Care Facilities Rex Hospital | | | 5.000 | | | | 07/01/2030 | | | A2 | | | 500,000 | | | | 501,125 | |
NC State Medical Care Commission Health Care Facilities Rex Hospital | | | 5.000 | | | | 07/01/2033 | | | A2 | | | 750,000 | | | | 856,995 | |
NC State Medical Care Commission Health Care Facilities Vidant Health | | | 5.000 | | | | 06/01/2040 | | | A2 | | | 1,385,000 | | | | 1,562,792 | |
NC State Medical Care Commission Health Care Facilities Wake Medical | | | 5.000 | | | | 10/01/2031 | | | A2 | | | 1,000,000 | | | | 1,071,460 | |
NC State Medical Care Commission Health Care Facilities Wake Medical | | | 5.000 | | | | 10/01/2038 | | | A2 | | | 200,000 | | | | 212,508 | |
NC State Medical Care Commission Rex Healthcare | | | 4.000 | | | | 07/01/2040 | | | A2 | | | 750,000 | | | | 847,343 | |
NC State Medical Care Commission Wake Forest Baptist Hospital | | | 5.000 | | | | 12/01/2033 | | | A2 | | | 1,000,000 | | | | 1,073,200 | |
New Hanover County NC Hospital Revenue New Hanover Regional Medical | | | 5.000 | | | | 10/01/2034 | | | A1 | | | 1,500,000 | | | | 1,792,290 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 11,151,888 | |
| TURNPIKES/TOLLROAD/HIGHWAY REVENUE BONDS | | | | | | | | | | | | | | | | | | |
| 4.57% of Net Assets | | | | | | | | | | | | | | | | | | |
NC State Grant Anticipation Revenue Vehicle Garvee | | | 5.000 | | | | 03/01/2030 | | | A2 | | | 200,000 | | | | 234,806 | |
NC State Limited Obligation Build NC Bonds | | | 4.000 | | | | 05/01/2034 | | | Aa1 | | | 670,000 | | | | 796,530 | |
NC State Turnpike Authority | | | 5.000 | | | | 01/01/2036 | | | AA* | | | 500,000 | | | | 603,720 | |
NC State Turnpike Authority | | | 5.000 | | | | 01/01/2038 | | | AA* | | | 2,415,000 | | | | 2,905,630 | |
NC State Turnpike Authority Monroe Connector System | | | 5.000 | | | | 07/01/2029 | | | Aa1 | | | 500,000 | | | | 520,880 | |
NC State Turnpike Authority Monroe Connector System | | | 5.000 | | | | 07/01/2031 | | | Aa1 | | | 1,385,000 | | | | 1,443,406 | |
NC State Turnpike Authority Triangle Expressway | | | 4.000 | | | | 01/01/2036 | | | Aa1 | | | 250,000 | | | | 290,918 | |
NC State Turnpike Authority Triangle Expressway | | | 4.000 | | | | 01/01/2039 | | | Aa1 | | | 500,000 | | | | 574,985 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 7,370,875 | |
| MISCELLANEOUS PUBLIC IMPROVEMENT BONDS | | | | | | | | | | | | | | | | | | |
| 3.51% of Net Assets | | | | | | | | | | | | | | | | | | |
Buncombe County NC Limited Obligation | | | 5.000 | | | | 06/01/2033 | | | Aa1 | | | 600,000 | | | | 706,080 | |
Buncombe County NC Limited Obligation | | | 5.000 | | | | 06/01/2034 | | | Aa1 | | | 1,100,000 | | | | 1,272,370 | |
Buncombe County NC Limited Obligation | | | 5.000 | | | | 06/01/2034 | | | Aa1 | | | 365,000 | | | | 428,769 | |
Charlotte NC Certificate of Participation | | | 5.000 | | | | 12/01/2029 | | | Aa1 | | | 340,000 | | | | 361,260 | |
Johnston County NC Limited Obligation | | | 4.750 | | | | 06/01/2033 | | | Aa2 | | | 500,000 | | | | 557,645 | |
Rocky Mount NC Special Obligation | | | 4.500 | | | | 05/01/2032 | | | Aa3 | | | 1,500,000 | | | | 1,769,835 | |
Winston Salem NC Limited Obligation | | | 4.500 | | | | 06/01/2034 | | | Aa1 | | | 500,000 | | | | 562,985 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 5,658,944 | |
| AIRPORT REVENUE BONDS | | | | | | | | | | | | | | | | | | |
| 3.10% of Net Assets | | | | | | | | | | | | | | | | | | |
Charlotte NC Douglas International Airport | | | 5.000 | | | | 07/01/2030 | | | Aa3 | | | 1,095,000 | | | | 1,243,351 | |
Charlotte NC Douglas International Airport | | | 5.000 | | | | 07/01/2036 | | | Aa3 | | | 250,000 | | | | 295,913 | |
Charlotte NC Douglas International Airport | | | 4.000 | | | | 07/01/2036 | | | Aa3 | | | 500,000 | | | | 553,325 | |
Charlotte NC Douglas International Airport | | | 5.000 | | | | 07/01/2037 | | | Aa3 | | | 700,000 | | | | 826,063 | |
Charlotte NC Douglas International Airport | | | 5.000 | | | | 07/01/2042 | | | Aa3 | | | 1,325,000 | | | | 1,554,238 | |
Charlotte NC Douglas International Airport | | | 4.000 | | | | 07/01/2044 | | | Aa3 | | | 480,000 | | | | 535,670 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 5,008,560 | |
| LEASE REVENUE BONDS | | | | | | | | | | | | | | | | | | |
| 1.08% of Net Assets | | | | | | | | | | | | | | | | | | |
Buncombe County NC Limited Obligation | | | 5.000 | | | | 06/01/2032 | | | Aa1 | | | 1,500,000 | | | | 1,742,610 | |
| | | | | | | | | | | | | | | | | | |
| ESCROWED TO MATURITY BONDS | | | | | | | | | | | | | | | | | | |
| .61% of Net Assets | | | | | | | | | | | | | | | | | | |
NC Eastern Municipal Power Agency | | | 6.000 | | | | 01/01/2022 | | | A3 | | | 915,000 | | | | 990,972 | |
| | | | | | | | | | | | | | | | | | |
The accompanying footnotes are an integral part of the financial statements.
25
DUPREE MUTUAL FUNDS — NORTH CAROLINA TAX-FREE INCOME SERIES
SCHEDULE OF PORTFOLIO INVESTMENTS
North Carolina Municipal Bonds
June 30, 2020
| | | | | | | | | | | | | | | | | | |
| Bond Description | | Coupon | | | Maturity
Date | | | Rating# | | Par Value | | | Fair Value | |
| AD VALOREM PROPERTY BONDS | | | | | | | | | | | | | | | | | | |
| .23% of Net Assets | | | | | | | | | | | | | | | | | | |
Raleigh NC Limited Obligation | | | 4.000 | % | | | 06/01/2034 | | | Aa1 | | $ | 300,000 | | | $ | 365,796 | |
| | | | | | | | | | | | | | | | | | |
Total Investments 97.50% of Net Assets (cost $147,849,559) (See (a) below for further explanation) | | | $ | 157,335,367 | |
| | | | | | | | | | | | | | | | | | |
Other assets in excess of liabilities 2.50% | | | | | | | | | | | | | | | | | 4,030,377 | |
| | | | | | | | | | | | | | | | | | |
Net Assets 100% | | | | | | | | | | | | | | | | $ | 161,365,744 | |
| | | | | | | | | | | | | | | | | | |
| | # | | Ratings by Moody’s Investors Service unless noted otherwise. |
| | | | Bond ratings are unaudited and not covered by Report of Independent Registered Public Accounting Firm. |
| | | | All ratings are as of the date indicated and do not reflect subsequent changes. |
| | * | | Rated by Standard & Poor’s Corporation |
| | @ | | Rated by Fitch’s Investors Service |
| | ^ | | When-issued security or extended settlement — see footnote 1(D) |
| | ** | | Security is segregated — see footnote 1(D) |
| (a) | | Cost for federal income tax purposes is $147,849,559 and net unrealized appreciation of investments is as follows: |
| | | | | | |
| | Unrealized appreciation | | $ | 9,565,120 | |
| | Unrealized depreciation | | | (79,312 | ) |
| | | | | | |
| | Net unrealized appreciation | | $ | 9,485,808 | |
| | | | | | |
Other Information
The following is a summary of the inputs used, as of June 30, 2020, involving the Fund’s investments in securities carried at fair value. The inputs or methodology used for valuing securities may not be an indication of the risk associated with investing in those securities. For more information on valuation inputs, and their aggregation into the levels used in the table below, please refer to the Security Valuation section in the accompanying Notes to Financial Statements.
| | | | | | |
| | | Valuation Inputs | | Municipal Bonds | |
| | | | | | |
Level 1 | | Quoted Prices | | $ | — | |
Level 2 | | Other Significant Observable Inputs | | | 157,335,367 | |
Level 3 | | Significant Unobservable Inputs | | | — | |
| | | | | | |
| | | | $ | 157,335,367 | |
| | | | | | |
The accompanying footnotes are an integral part of the financial statements.
26
NORTH CAROLINA TAX-FREE INCOME SERIES
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2020
| | | | | | | | |
ASSETS: | | | | | | | | |
Investments in securities, at fair value (Cost: $147,849,559) | | | | | | $ | 157,335,367 | |
Cash | | | | | | | 4,749,200 | |
Receivable for fund shares sold | | | | | | | 9,976 | |
Interest receivable | | | | | | | 1,438,667 | |
| | | | | | | | |
Total assets | | | | | | | 163,533,210 | |
LIABILITIES: | | | | | | | | |
Payable for: | | | | | | | | |
Investments purchased | | | 1,597,582 | | | | | |
Distributions to shareholders | | | 353,793 | | | | | |
Fund shares redeemed | | | 92,473 | | | | | |
Investment advisory fee | | | 64,338 | | | | | |
Transfer agent fee | | | 26,921 | | | | | |
Trustees fees | | | 3,175 | | | | | |
Custodian expense | | | 3,592 | | | | | |
Accrued expenses | | | 25,592 | | | | | |
| | | | | | | | |
Total liabilities | | | | | | | 2,167,466 | |
| | | | | | | | |
NET ASSETS: | | | | | | | | |
Capital | | | | | | | 153,462,083 | |
Total distributable earnings | | | | | | | 7,903,661 | |
| | | | | | | | |
Net assets at value | | | | | | $ | 161,365,744 | |
| | | | | | | | |
NET ASSET VALUE, offering price and redemption price per share
(13,529,872 shares outstanding; unlimited number of shares authorized; no par value) | | | | | | $ | 11.93 | |
| | | | | | | | |
STATEMENT OF OPERATIONS
For the year ended June 30, 2020
| | | | |
Net investment income: | | | | |
Interest income | | $ | 4,602,767 | |
| | | | |
Expenses: | | | | |
Investment advisory fee | | | 745,053 | |
Transfer agent fee | | | 192,073 | |
Professional fees | | | 43,081 | |
Custodian expense | | | 24,063 | |
Trustees fees | | | 17,820 | |
Pricing fees | | | 13,538 | |
Registration fees | | | 8,342 | |
Compliance expense | | | 7,221 | |
Other expenses | | | 26,040 | |
| | | | |
Total expenses | | | 1,077,231 | |
Fees waived by Adviser (Note 2) | | | (1,040 | ) |
Custodian expense reduction | | | (862 | ) |
| | | | |
Net expenses | | | 1,075,329 | |
| | | | |
Net investment income | | | 3,527,438 | |
| | | | |
Realized and unrealized gain on investments: | | | | |
Net realized gain | | | 172,081 | |
Net change in unrealized appreciation/(depreciation) | | | 30,013,563 | |
| | | | |
Net realized and unrealized gain on investments | | | 30,185,644 | |
| | | | |
Net increase in net assets resulting from operations | | $ | 33,713,082 | |
| | | | |
The accompanying footnotes are an integral part of the financial statements.
27
NORTH CAROLINA TAX-FREE INCOME SERIES
STATEMENTS OF CHANGES IN NET ASSETS
For the years ended June 30, 2020 and 2019
| | | | | | | | |
| | | 2020 | | | 2019 | |
Operations: | | | | | | | | |
Net investment income | | $ | 3,527,438 | | | $ | 3,413,609 | |
Net realized gain/(loss) on investments | | | 172,081 | | | | (409,045 | ) |
Net change in unrealized appreciation/(depreciation) | | | 30,013,563 | | | | 4,464,408 | |
| | | | | | | | |
Net increase in net assets resulting from operations | | | 33,713,082 | | | | 7,468,972 | |
Total distributions (Note 6) | | | (3,527,438 | ) | | | (3,413,609 | ) |
Net Fund share transactions (Note 4) | | | 12,102,173 | | | | 10,844,319 | |
| | | | | | | | |
Total increase | | | 42,287,817 | | | | 14,899,682 | |
Net assets: | | | | | | | | |
Beginning of year | | | 146,077,927 | | | | 131,178,245 | |
| | | | | | | | |
End of year | | $ | 188,365,744 | | | $ | 146,077,927 | |
| | | | | | | | |
FINANCIAL HIGHLIGHTS
| | | | | | | | | | | | | | | | | | | | |
| Selected data for a share outstanding: | | For the years ended June 30, | |
| | | 2020 | | | 2019 | | | 2018 | | | 2017 | | | 2016 | |
Net asset value, beginning of year | | $ | 11.68 | | | $ | 11.34 | | | $ | 11.50 | | | $ | 12.02 | | | $ | 11.53 | |
| | | | | | | | | | | | | | | | | | | | |
Income from investment operations: | | | | | | | | | | | | | | | | | | | | |
Net investment income | | | 0.27 | | | | 0.29 | | | | 0.31 | | | | 0.32 | | | | 0.34 | |
Net gains/(losses) on investments | | | 0.25 | | | | 0.34 | | | | (0.16 | ) | | | (0.52 | ) | | | 0.49 | |
| | | | | | | | | | | | | | | | | | | | |
Total from investment operations | | | 0.52 | | | | 0.63 | | | | 0.15 | | | | (0.20 | ) | | | 0.83 | |
Less distributions: | | | | | | | | | | | | | | | | | | | | |
Distributions from net investment income | | | (0.27 | ) | | | (0.29 | ) | | | (0.31 | ) | | | (0.32 | ) | | | (0.34 | ) |
| | | | | | | | | | | | | | | | | | | | |
Net asset value, end of year | | $ | 11.93 | | | $ | 11.68 | | | $ | 11.34 | | | $ | 11.50 | | | $ | 12.02 | |
| | | | | | | | | | | | | | | | | | | | |
Total return | | | 4.48% | | | | 5.69% | | | | 1.27% | | | | (1.68 | )% | | | 7.28% | |
Net assets, end of year (in thousands) | | $ | 161,366 | | | $ | 146,078 | | | $ | 131,178 | | | $ | 139,272 | | | $ | 150,347 | |
Ratio of net expenses to average net assets (a) | | | 0.69% | | | | 0.70% | | | | 0.70% | | | | 0.69% | | | | 0.70% | |
Ratio of gross expenses to average net assets | | | 0.69% | | | | 0.71% | | | | 0.71% | | | | 0.69% | | | | 0.70% | |
Ratio of net investment income to average net assets | | | 2.27% | | | | 2.58% | | | | 2.66% | | | | 2.73% | | | | 2.87% | |
Portfolio turnover | | | 9.88% | | | | 13.02% | | | | 11.76% | | | | 11.50% | | | | 6.09% | |
| (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. |
The accompanying footnotes are an integral part of the financial statements.
28
DUPREE MUTUAL FUNDS — NORTH CAROLINA TAX-FREE SHORT-TO-MEDIUM SERIES
SCHEDULE OF PORTFOLIO INVESTMENTS
North Carolina Municipal Bonds
June 30, 2020
| | | | | | | | | | | | | | | | | | |
| Bond Description | | Coupon | | | Maturity
Date | | | Rating# | | Par Value | | | Fair Value | |
| UNIVERSITY CONSOLIDATED EDUCATION AND BUILDING REVENUE BONDS | | | | | | | | | | | |
| 24.50% of Net Assets | | | | | | | | | | | | | | | | | | |
East Carolina University | | | 5.000 | % | | | 10/01/2027 | | | Aa3 | | $ | 250,000 | | | $ | 303,738 | |
Pitt County NC Limited Obligation | | | 5.000 | | | | 04/01/2027 | | | Aa2 | | | 495,000 | | | | 622,923 | |
University of NC Charlotte | | | 5.000 | | | | 10/01/2025 | | | Aa3 | | | 110,000 | | | | 133,401 | |
University of NC Charlotte | | | 5.000 | | | | 04/01/2028 | | | Aa3 | | | 250,000 | | | | 296,173 | |
University of NC Greensboro | | | 5.000 | | | | 04/01/2025 | | | A+* | | | 10,000 | | | | 10,310 | |
University of NC Greensboro | | | 5.000 | | | | 04/01/2026 | | | Aa3 | | | 400,000 | | | | 489,222 | |
University of NC Wilmington | | | 4.000 | | | | 06/01/2029 | | | A1 | | | 750,000 | | | | 827,160 | |
University of NC Wilmington Limited Obligation | | | 4.000 | | | | 06/01/2030 | | | A1 | | | 200,000 | | | | 220,928 | |
Western Carolina University | | | 5.000 | | | | 10/01/2025 | | | Aa3 | | | 225,000 | | | | 274,030 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 3,177,885 | |
| REFUNDING BONDS | | | | | | | | | | | | | | | | | | |
| 19.46% of Net Assets | | | | | | | | | | | | | | | | | | |
Bertie County Limited Obligation** | | | 4.000 | | | | 06/01/2022 | | | A1 | | | 200,000 | | | | 212,758 | |
Cabarrus County NC Certificate of Participation | | | 5.000 | | | | 04/01/2021 | | | AA* | | | 150,000 | | | | 150,455 | |
Charlotte NC Certificate of Participation | | | 4.000 | | | | 06/01/2022 | | | Aa1 | | | 125,000 | | | | 133,770 | |
Charlotte NC Certificate of Participation | | | 5.000 | | | | 06/01/2023 | | | Aa1 | | | 25,000 | | | | 28,382 | |
Charlotte NC Certificate of Participation | | | 4.000 | | | | 06/01/2025 | | | Aa1 | | | 100,000 | | | | 110,100 | |
Charlotte NC Certificate of Participation | | | 5.000 | | | | 12/01/2025 | | | Aa2 | | | 100,000 | | | | 122,947 | |
Dare County NC Limited Obligation | | | 5.000 | | | | 06/01/2024 | | | Aa3 | | | 335,000 | | | | 364,637 | |
Raleigh NC Limited Obligation Refunding | | | 5.000 | | | | 10/01/2023 | | | Aa2 | | | 250,000 | | | | 287,478 | |
Rockingham County NC Limited Obligation** | | | 5.000 | | | | 04/01/2023 | | | Aa3 | | | 250,000 | | | | 280,862 | |
Rockingham County NC Limited Obligation | | | 4.000 | | | | 04/01/2024 | | | Aa3 | | | 105,000 | | | | 118,478 | |
Sampson County NC Limited Obligation | | | 5.000 | | | | 12/01/2023 | | | A1 | | | 165,000 | | | | 189,595 | |
Sampson County NC Limited Obligation | | | 5.000 | | | | 09/01/2025 | | | A1 | | | 125,000 | | | | 151,674 | |
Sampson County NC Limited Obligation | | | 5.000 | | | | 09/01/2026 | | | A1 | | | 210,000 | | | | 261,555 | |
Warren County NC Limited Obligation** | | | 5.000 | | | | 06/01/2023 | | | A1 | | | 100,000 | | | | 112,745 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 2,525,436 | |
| MUNICIPAL UTILITY REVENUE BONDS | | | | | | | | | | | | | | | | | | |
| 12.99% of Net Assets | | | | | | | | | | | | | | | | | | |
Brunswick County NC Enterprise System Revenue** | | | 5.000 | | | | 04/01/2027 | | | Aa3 | | | 250,000 | | | | 298,740 | |
Cary NC Combined Enterprise Systems | | | 4.000 | | | | 12/01/2028 | | | Aaa | | | 250,000 | | | | 292,635 | |
Columbus County NC Limited Obligation | | | 5.000 | | | | 06/01/2023 | | | A1 | | | 355,000 | | | | 399,915 | |
Monroe NC Limited Obligation | | | 5.000 | | | | 03/01/2028 | | | Aa3 | | | 95,000 | | | | 116,539 | |
Monroe NC Limited Obligation | | | 5.000 | | | | 03/01/2029 | | | Aa3 | | | 195,000 | | | | 238,005 | |
NC Municipal Power Agency #1 Catawba Electric | | | 5.000 | | | | 01/01/2028 | | | A* | | | 125,000 | | | | 149,558 | |
Warren County NC Limited Obligation | | | 5.000 | | | | 06/01/2027 | | | A1 | | | 160,000 | | | | 190,816 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 1,686,208 | |
| SCHOOL IMPROVEMENT BONDS | | | | | | | | | | | | | | | | | | |
| 11.55% of Net Assets | | | | | | | | | | | | | | | | | | |
Onslow County NC Limted Obligation | | | 5.000 | | | | 06/01/2023 | | | Aa2 | | | 250,000 | | | | 283,033 | |
Randolph County NC Limited Obligation | | | 5.000 | | | | 10/01/2025 | | | Aa3 | | | 250,000 | | | | 305,345 | |
Rutherford County NC Limited Obligation | | | 5.000 | | | | 03/01/2028 | | | A1 | | | 75,000 | | | | 96,138 | |
Scotland County NC | | | 5.000 | | | | 12/01/2025 | | | A* | | | 270,000 | | | | 326,832 | |
Scotland County NC | | | 5.000 | | | | 12/01/2026 | | | A* | | | 250,000 | | | | 309,745 | |
Scotland County NC | | | 5.000 | | | | 12/01/2027 | | | A* | | | 140,000 | | | | 178,112 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 1,499,205 | |
| PUBLIC FACILITIES REVENUE BONDS | | | | | | | | | | | | | | | | | | |
| 8.52% of Net Assets | | | | | | | | | | | | | | | | | | |
Buncombe County NC Limited Obligation** | | | 5.000 | | | | 06/01/2028 | | | Aa1 | | | 500,000 | | | | 598,430 | |
Charlotte NC Certificate of Participation | | | 4.000 | | | | 12/01/2022 | | | Aa1 | | | 170,000 | | | | 178,803 | |
Monroe NC Limited Obligation | | | 5.000 | | | | 04/01/2026 | | | AA* | | | 265,000 | | | | 328,799 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 1,106,032 | |
| HOSPITAL AND HEALTHCARE REVENUE BONDS | | | | | | | | | | | | | | | | | | |
| 5.23% of Net Assets | | | | | | | | | | | | | | | | | | |
Charlotte-Mecklenburg NC Hospital Authority Health Care System | | | 5.000 | | | | 01/15/2028 | | | Aa3 | | | 225,000 | | | | 269,906 | |
NC State Medical Care Commission Health Care Facilities | | | 4.000 | | | | 06/01/2024 | | | A2 | | | 180,000 | | | | 199,530 | |
The accompanying footnotes are an integral part of the financial statements.
29
DUPREE MUTUAL FUNDS — NORTH CAROLINA TAX-FREE SHORT-TO-MEDIUM SERIES
SCHEDULE OF PORTFOLIO INVESTMENTS
North Carolina Municipal Bonds
June 30, 2020
| | | | | | | | | | | | | | | | | | |
| Bond Description | | Coupon | | | Maturity
Date | | | Rating# | | Par Value | | | Fair Value | |
North Carolina State Medical Care Commission Vidant Health | | | 5.000 | % | | | 06/01/2028 | | | A2 | | $ | 180,000 | | | $ | 209,210 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 678,646 | |
| TURNPIKES/TOLLROAD/HIGHWAY REVENUE BONDS | | | | | | | | | | | | | | | | | | |
| 3.92% of Net Assets | | | | | | | | | | | | | | | | | | |
NC State Grant Anticipation Revenue Vehicle | | | 5.000 | | | | 03/01/2029 | | | A2 | | | 120,000 | | | | 141,362 | |
North Carolina State Anticipation Revenue Garvee | | | 5.000 | | | | 03/01/2029 | | | A2 | | | 20,000 | | | | 26,413 | |
North Carolina Turnpike Authority | | | 5.000 | | | | 01/01/2029 | | | A2 | | | 285,000 | | | | 341,504 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 509,279 | |
| PREREFUNDED BONDS | | | | | | | | | | | | | | | | | | |
| 3.84% of Net Assets | | | | | | | | | | | | | | | | | | |
Union County NC Enterprise System Revenue | | | 4.000 | | | | 12/01/2022 | | | Aa1 | | | 100,000 | | | | 105,222 | |
University of NC Greensboro | | | 5.000 | | | | 04/01/2025 | | | NR | | | 90,000 | | | | 93,185 | |
Watauga NC Public Facillities Corporation Limited Obligation | | | 5.000 | | | | 06/01/2023 | | | Aa3 | | | 275,000 | | | | 299,552 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 497,959 | |
| AD VALOREM PROPERTY BONDS | | | | | | | | | | | | | | | | | | |
| 2.19% of Net Assets | | | | | | | | | | | | | | | | | | |
Smithville Township NC** | | | 5.000 | | | | 06/01/2024 | | | Aa3 | | | 250,000 | | | | 284,820 | |
| | | | | | | | | | | | | | | | | | |
| LEASE REVENUE BONDS | | | | | | | | | | | | | | | | | | |
| 2.05% of Net Assets | | | | | | | | | | | | | | | | | | |
Edgecombe County NC Limited Obligation** | | | 4.000 | | | | 06/01/2022 | | | A2 | | | 250,000 | | | | 265,948 | |
| | | | | | | | | | | | | | | | | | |
| ESCROWED TO MATURITY BONDS | | | | | | | | | | | | | | | | | | |
| 1.84% of Net Assets | | | | | | | | | | | | | | | | | | |
NC Eastern Municipal Power Agency | | | 6.000 | | | | 01/01/2022 | | | A3 | | | 220,000 | | | | 238,267 | |
| | | | | | | | | | | | | | | | | | |
| MISCELLANEOUS PUBLIC IMPROVEMENT BONDS | | | | | | | | | | | | | | | | | | |
| 1.09% of Net Assets | | | | | | | | | | | | | | | | | | |
Winston Salem NC Limited Obligation | | | 5.000 | | | | 06/01/2023 | | | Aa1 | | | 125,000 | | | | 142,025 | |
| | | | | | | | | | | | | | | | | | |
Total Investments 97.18% of Net Assets (cost $11,876,061) (See (a) below for further explanation) | | | $ | 12,611,710 | |
| | | | | | | | | | | | | | | | | | |
Other assets in excess of liabilities 2.82% | | | | | | | | | | | | | | | | | 365,456 | |
| | | | | | | | | | | | | | | | | | |
Net Assets 100% | | | | | | | | | | | | | | | | $ | 12,977,166 | |
| | | | | | | | | | | | | | | | | | |
| | # | | Ratings by Moody’s Investors Service unless noted otherwise. |
| | | | Bond ratings are unaudited and not covered by Report of Independent Registered Public Accounting Firm. |
| | | | All ratings are as of the date indicated and do not reflect subsequent changes. |
| | * | | Rated by Standard & Poor’s Corporation |
| | @ | | Rated by Fitch’s Investors Service |
| | ** | | Security is segregated — see footnote 1(D) |
| (a) | | Cost for federal income tax purposes is $11,876,061 and net unrealized depreciation of investments is as follows: |
| | | | | | |
| | Unrealized appreciation | | $ | 735,649 | |
| | Unrealized depreciation | | | — | |
| | | | | | |
| | Net unrealized appreciation | | $ | 735,649 | |
| | | | | | |
Other Information
The following is a summary of the inputs used, as of June 30, 2020, involving the Fund’s investments in securities carried at fair value. The inputs or methodology used for valuing securities may not be an indication of the risk associated with investing in those securities. For more information on valuation inputs, and their aggregation into the levels used in the table below, please refer to the Security Valuation section in the accompanying Notes to Financial Statements.
| | | | | | |
| | | Valuation Inputs | | Municipal Bonds | |
Level 1 | | Quoted Prices | | $ | — | |
Level 2 | | Other Significant Observable Inputs | | | 12,611,710 | |
Level 3 | | Significant Unobservable Inputs | | | — | |
| | | | | | |
| | | | $ | 12,611,710 | |
| | | | | | |
The accompanying footnotes are an integral part of the financial statements.
30
NORTH CAROLINA TAX-FREE SHORT-TO-MEDIUM SERIES
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2020
| | | | | | | | |
ASSETS: | | | | | | | | |
Investments in securities, at fair value (Cost: $11,876,061) | | | | | | $ | 12,611,710 | |
Cash | | | | | | | 296,808 | |
Interest receivable | | | | | | | 99,995 | |
| | | | | | | | |
Total assets | | | | | | | 13,008,513 | |
LIABILITIES: | | | | | | | | |
Payable for: | | | | | | | | |
Distributions to shareholders | | | 4,351 | | | | | |
Fund shares redeemed | | | 2,214 | | | | | |
Investment advisory fee | | | 1,937 | | | | | |
Transfer agent fee | | | 1,561 | | | | | |
Professional fees | | | 6,723 | | | | | |
Custodian expense | | | 3,542 | | | | | |
Trustees fees | | | 1,611 | | | | | |
Accrued expenses | | | 9,408 | | | | | |
| | | | | | | | |
Total liabilities | | | | | | | 31,347 | |
| | | | | | | | |
NET ASSETS: | | | | | | | | |
Capital | | | | | | | 12,240,007 | |
Total distributable earnings | | | | | | | 737,159 | |
| | | | | | | | |
Net assets at value | | | | | | $ | 12,977,166 | |
| | | | | | | | |
NET ASSET VALUE, offering price and redemption price per share
(1,158,931 shares outstanding; unlimited number of shares authorized; no par value) | | | | | | $ | 11.20 | |
| | | | | | | | |
STATEMENT OF OPERATIONS
For the year ended June 30, 2020
| | | | |
Net investment income: | | | | |
Interest income | | $ | 398,220 | |
| | | | |
Expenses: | | | | |
Investment advisory fee | | | 88,063 | |
Transfer agent fee | | | 26,393 | |
Registration fees | | | 9,689 | |
Custodian expense | | | 8,492 | |
Compliance fees | | | 7,020 | |
Pricing fees | | | 5,717 | |
Professional fees | | | 5,239 | |
Trustees fees | | | 2,171 | |
Other expenses | | | 7,807 | |
| | | | |
Total expenses | | | 160,591 | |
Fees waived by Adviser (Note 2) | | | (36,534 | ) |
Custodian expense reduction | | | (304 | ) |
| | | | |
Net expenses | | | 123,753 | |
| | | | |
Net investment income | | | 274,467 | |
| | | | |
Realized and unrealized gain on investments: | | | | |
Net realized gain | | | 151,048 | |
Net change in unrealized appreciation/(depreciation) | | | 80,007 | |
| | | | |
Net realized and unrealized gain on investments | | | 231,055 | |
| | | | |
Net increase in net assets resulting from operations | | $ | 505,522 | |
| | | | |
The accompanying footnotes are an integral part of the financial statements.
31
NORTH CAROLINA TAX-FREE SHORT-TO-MEDIUM SERIES
STATEMENTS OF CHANGES IN NET ASSETS
For the years ended June 30, 2020 and 2019
| | | | | | | | |
| | | 2020 | | | 2019 | |
Operations: | | | | | | | | |
Net investment income | | $ | 274,467 | | | $ | 322,451 | |
Net realized gain/(loss) on investments | | | 151,048 | | | | (130,283 | ) |
Net change in unrealized appreciation/(depreciation) | | | 80,007 | | | | 821,421 | |
| | | | | | | | |
Net increase in net assets resulting from operations | | | 505,522 | | | | 1,013,589 | |
Total distributions (Note 6) | | | (274,467 | ) | | | (322,451 | ) |
Net Fund share transactions (Note 4) | | | (6,757,665 | ) | | | (3,454,289 | ) |
| | | | | | | | |
Total decrease | | | (6,526,610 | ) | | | (2,763,151 | ) |
Net assets: | | | | | | | | |
Beginning of year | | | 19,503,776 | | | | 22,266,927 | |
| | | | | | | | |
End of year | | $ | 12,977,166 | | | $ | 19,503,776 | |
| | | | | | | | |
FINANCIAL HIGHLIGHTS
| | | | | | | | | | | | | | | | | | | | |
| Selected data for a share outstanding: | | For the years ended June 30, | |
| | | 2020 | | | 2019 | | | 2018 | | | 2017 | | | 2016 | |
Net asset value, beginning of year | | $ | 11.02 | | | $ | 10.64 | | | $ | 10.85 | | | $ | 11.05 | | | $ | 10.94 | |
| | | | | | | | | | | | | | | | | | | | |
Income from investment operations: | | | | | | | | | | | | | | | | | | | | |
Net investment income | | | 0.17 | | | | 0.17 | | | | 0.16 | | | | 0.16 | | | | 0.17 | |
Net gains/(losses) on investments | | | 0.18 | | | | 0.38 | | | | (0.21 | ) | | | (0.20 | ) | | | 0.11 | |
| | | | | | | | | | | | | | | | | | | | |
Total from investment operations | | | 0.35 | | | | 0.55 | | | | (0.05 | ) | | | (0.04 | ) | | | 0.28 | |
Less distributions: | | | | | | | | | | | | | | | | | | | | |
Distributions from net investment income | | | (0.17 | ) | | | (0.17 | ) | | | (0.16 | ) | | | (0.16 | ) | | | (0.17 | ) |
| | | | | | | | | | | | | | | | | | | | |
Net asset value, end of year | | $ | 11.20 | | | $ | 11.02 | | | $ | 10.64 | | | $ | 10.85 | | | $ | 11.05 | |
| | | | | | | | | | | | | | | | | | | | |
Total return | | | 3.24% | | | | 5.19% | | | | (0.45 | )% | | | (0.33 | )% | | | 2.59% | |
Net assets, end of year (in thousands) | | $ | 12,977 | | | $ | 19,504 | | | $ | 22,267 | | | $ | 21,930 | | | $ | 25,134 | |
Ratio of net expenses to average net assets (a) | | | 0.70% | | | | 0.70% | | | | 0.70% | | | | 0.73% | | | | 0.83% | |
Ratio of gross expenses to average net assets | | | 0.91% | | | | 0.88% | | | | 0.86% | | | | 0.82% | | | | 0.83% | |
Ratio of net investment income to average net assets | | | 1.56% | | | | 1.55% | | | | 1.50% | | | | 1.49% | | | | 1.56% | |
Portfolio turnover | | | 9.59% | | | | 13.59% | | | | 21.80% | | | | 11.15% | | | | 24.05% | |
| (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. |
The accompanying footnotes are an integral part of the financial statements.
32
DUPREE MUTUAL FUNDS — TENNESSEE TAX-FREE INCOME SERIES
SCHEDULE OF PORTFOLIO INVESTMENTS
Tennessee Municipal Bonds
June 30, 2020
| | | | | | | | | | | | | | | | | | |
| Bond Description | | Coupon | | | Maturity
Date | | | Rating# | | Par Value | | | Fair Value | |
| MUNICIPAL UTILITY REVENUE BONDS | | | | | | | | | | | | | | | | | | |
| 35.58% of Net Assets | | | | | | | | | | | | | | | | | | |
Bristol TN Electric Revenue | | | 5.000 | % | | | 09/01/2038 | | | AA-* | | $ | 1,525,000 | | | $ | 1,708,214 | |
Chattanooga TN Electric Revenue | | | 5.000 | | | | 09/01/2035 | | | AA* | | | 250,000 | | | | 296,923 | |
Chattanooga TN Electric Revenue | | | 5.000 | | | | 09/01/2040 | | | AA* | | | 2,325,000 | | | | 2,746,032 | |
Clarksville TN Electric System Revenue | | | 4.000 | | | | 09/01/2034 | | | Aa2 | | | 500,000 | | | | 581,705 | |
Clarksville TN Water Sewer & Gas Revenue | | | 5.000 | | | | 02/01/2036 | | | Aa2 | | | 500,000 | | | | 591,370 | |
Clarksville TN Water Sewer & Gas Revenue | | | 4.000 | | | | 02/01/2036 | | | Aa2 | | | 1,475,000 | | | | 1,720,042 | |
Clarksville TN Water Sewer & Gas Revenue | | | 4.000 | | | | 02/01/2038 | | | Aa2 | | | 820,000 | | | | 950,528 | |
Columbia TN Waterworks Revenue | | | 5.000 | | | | 12/01/2032 | | | Aa3 | | | 885,000 | | | | 936,312 | |
Franklin TN Water & Sewer Revenue and Tax Authority | | | 5.000 | | | | 04/01/2024 | | | Aaa | | | 750,000 | | | | 880,215 | |
Franklin TN Water & Sewer System Revenue | | | 4.000 | | | | 02/01/2036 | | | Aa3 | | | 250,000 | | | | 285,180 | |
Hallsdale-Powell TN Utility District Knox County Water & Sewer | | | 4.000 | | | | 04/01/2035 | | | AA* | | | 315,000 | | | | 355,830 | |
Hallsdale-Powell TN Utility District Knox County Water & Sewer | | | 4.000 | | | | 04/01/2038 | | | AA* | | | 1,000,000 | | | | 1,119,700 | |
Harpeth Valley TN Utilities District | | | 5.000 | | | | 09/01/2034 | | | AA+* | | | 500,000 | | | | 582,805 | |
Harpeth Valley TN Utilities District | | | 5.000 | | | | 09/01/2040 | | | AA+* | | | 1,000,000 | | | | 1,086,070 | |
Harpeth Valley Utilities | | | 4.000 | | | | 09/01/2045 | | | AA+* | | | 150,000 | | | | 174,335 | |
Harpeth Valley Utilities | | | 4.000 | | | | 09/01/2050 | | | AA+* | | | 250,000 | | | | 289,425 | |
Knox Chapman TN Utility District | | | 4.500 | | | | 01/01/2027 | | | AA-* | | | 1,000,000 | | | | 1,098,570 | |
Knox Chapman TN Utility District | | | 5.000 | | | | 01/01/2031 | | | AA-* | | | 250,000 | | | | 293,560 | |
Knox Chapman TN Utility District | | | 5.000 | | | | 01/01/2033 | | | AA-* | | | 250,000 | | | | 294,043 | |
Memphis TN Electric System Revenue | | | 5.000 | | | | 12/01/2031 | | | Aa2 | | | 225,000 | | | | 265,415 | |
Memphis TN Electric System Revenue | | | 5.000 | | | | 12/01/2034 | | | Aa2 | | | 1,250,000 | | | | 1,466,813 | |
Memphis TN Gas System Revenue | | | 4.000 | | | | 12/01/2034 | | | Aa1 | | | 775,000 | | | | 888,034 | |
Memphis TN Gas System Revenue | | | 4.000 | | | | 12/01/2036 | | | Aa1 | | | 800,000 | | | | 927,744 | |
Memphis TN Gas System Revenue** | | | 4.000 | | | | 12/01/2037 | | | Aa1 | | | 1,310,000 | | | | 1,515,225 | |
Memphis TN Storm Water System Revenue | | | 5.000 | | | | 10/01/2038 | | | Aa3 | | | 500,000 | | | | 617,120 | |
Metropolitan Government Nashville & Davidson County Electric | | | 5.000 | | | | 05/15/2036 | | | AA* | | | 500,000 | | | | 575,825 | |
Metropolitan Government Nashville & Davidson County Electric** | | | 5.000 | | | | 05/15/2036 | | | AA* | | | 3,085,000 | | | | 3,192,204 | |
Metropolitan Government Nashville & Davidson County Electric | | | 5.000 | | | | 05/15/2039 | | | AA* | | | 500,000 | | | | 573,975 | |
Metropolitan Government Nashville & Davidson County Water & Sewer** | | | 5.000 | | | | 07/01/2030 | | | Aa2 | | | 3,250,000 | | | | 3,669,735 | |
Metropolitan Government Nashville & Davidson County Water & Sewer | | | 5.000 | | | | 07/01/2031 | | | Aa2 | | | 500,000 | | | | 563,935 | |
Metropolitan Government Nashville & Davidson County Water & Sewer | | | 5.000 | | | | 07/01/2033 | | | Aa2 | | | 575,000 | | | | 645,967 | |
Metropolitan Government Nashville & Davidson County Water & Sewer | | | 5.000 | | | | 07/01/2037 | | | Aa2 | | | 250,000 | | | | 307,213 | |
Metropolitan Government Nashville & Davidson County Water & Sewer** | | | 5.000 | | | | 07/01/2040 | | | Aa2 | | | 2,265,000 | | | | 2,521,646 | |
Watauga River Regional Water Authority TN Waterworks | | | 4.000 | | | | 07/01/2037 | | | A* | | | 270,000 | | | | 309,110 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 34,030,820 | |
| SCHOOL IMPROVEMENT BONDS | | | | | | | | | | | | | | | | | | |
| 11.70% of Net Assets | | | | | | | | | | | | | | | | | | |
Coffee County TN | | | 4.000 | | | | 06/01/2037 | | | AA-* | | | 500,000 | | | | 579,100 | |
Coffee County TN | | | 4.000 | | | | 06/01/2041 | | | AA-* | | | 620,000 | | | | 709,925 | |
Franklin TN Special School District | | | 5.000 | | | | 06/01/2039 | | | Aa1 | | | 250,000 | | | | 320,390 | |
Johnson City TN | | | 4.000 | | | | 06/01/2036 | | | Aa2 | | | 1,150,000 | | | | 1,364,901 | |
Montgomery County TN | | | 4.000 | | | | 04/01/2036 | | | AA+* | | | 260,000 | | | | 298,709 | |
Montgomery County TN | | | 4.000 | | | | 04/01/2037 | | | AA+* | | | 1,920,000 | | | | 2,196,595 | |
Rhea County TN** | | | 5.000 | | | | 04/01/2029 | | | A1 | | | 1,385,000 | | | | 1,488,555 | |
Shelby County TN | | | 5.000 | | | | 04/01/2037 | | | Aa1 | | | 500,000 | | | | 613,055 | |
Wilson County TN | | | 4.000 | | | | 04/01/2039 | | | AA+* | | | 1,495,000 | | | | 1,678,287 | |
Wilson County TN 10th Special School District | | | 4.000 | | | | 04/01/2033 | | | AA-* | | | 655,000 | | | | 772,841 | |
Wilson County TN 10th Special School District | | | 4.000 | | | | 04/01/2037 | | | AA-* | | | 200,000 | | | | 236,012 | |
Wilson County TN 10th Special School District | | | 4.000 | | | | 04/01/2038 | | | AA-* | | | 250,000 | | | | 294,128 | |
Wilson County TN 10th Special School District | | | 4.000 | | | | 04/01/2039 | | | AA-* | | | 550,000 | | | | 645,139 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 11,197,637 | |
| PUBLIC FACILITIES REVENUE BONDS | | | | | | | | | | | | | | | | | | |
| 10.62% of Net Assets | | | | | | | | | | | | | | | | | | |
Memphis Shelby County TN Industrial Development Board | | | 5.000 | | | | 11/01/2030 | | | Aa3 | | | 1,250,000 | | | | 1,545,838 | |
Memphis TN Refunding General Improvement | | | 5.000 | | | | 04/01/2031 | | | Aa2 | | | 800,000 | | | | 927,512 | |
Metropolitan Government Nashville & Davidson County Convention Center | | | 5.000 | | | | 07/01/2026 | | | A1 | | | 630,000 | | | | 631,329 | |
Metropolitan Government Nashville & Davidson County Sports Authority | | | 5.000 | | | | 08/01/2031 | | | Aa3 | | | 1,500,000 | | | | 1,675,560 | |
The accompanying footnotes are an integral part of the financial statements.
33
DUPREE MUTUAL FUNDS — TENNESSEE TAX-FREE INCOME SERIES
SCHEDULE OF PORTFOLIO INVESTMENTS
Tennessee Municipal Bonds
June 30, 2020
| | | | | | | | | | | | | | | | | | |
| Bond Description | | Coupon | | | Maturity
Date | | | Rating# | | Par Value | | | Fair Value | |
Metropolitan Government Nashville & Davidson County Sports Authority | | | 5.000 | % | | | 08/01/2038 | | | Aa3 | | $ | 755,000 | | | $ | 837,046 | |
Pigeon Forge Industrial Development Board | | | 5.000 | | | | 06/01/2027 | | | AA* | | | 1,400,000 | | | | 1,456,126 | |
Pigeon Forge Industrial Development Board** | | | 5.000 | | | | 06/01/2029 | | | AA* | | | 2,120,000 | | | | 2,202,998 | |
Pigeon Forge Industrial Development Board | | | 5.000 | | | | 06/01/2034 | | | AA* | | | 850,000 | | | | 882,232 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 10,158,641 | |
| UNIVERSITY CONSOLIDATED EDUCATION AND BUILDING REVENUE BONDS | | | | | |
| 8.76% of Net Assets | | | | | | | | | | | | | | | | | | |
Franklin County TN Health & Education Facilities Board Revenue | | | 5.000 | | | | 09/01/2030 | | | A+* | | | 200,000 | | | | 216,224 | |
Metropolitan Government Nashville & Davidson County Vanderbilt University | | | 5.000 | | | | 10/01/2028 | | | Aa1 | | | 650,000 | | | | 717,912 | |
Shelby County TN Health Education & Housing Facilities Board Rhodes College | | | 4.000 | | | | 08/01/2036 | | | A2/A+* | | | 920,000 | | | | 1,037,162 | |
Shelby County TN Health Education & Housing Facilities Board Rhodes College | | | 4.000 | | | | 08/01/2037 | | | A2/A+* | | | 1,030,000 | | | | 1,158,101 | |
Shelby County TN Health Education & Housing Facilities Board Rhodes College | | | 4.000 | | | | 08/01/2040 | | | A2/A+* | | | 875,000 | | | | 976,054 | |
TN State School Bond Authority Higher Educational Facilities | | | 5.000 | | | | 11/01/2037 | | | Aa1 | | | 700,000 | | | | 813,344 | |
TN State School Bond Authority Higher Educational Facilities | | | 5.000 | | | | 11/01/2040 | | | Aa1 | | | 2,000,000 | | | | 2,372,320 | |
TN State School Bond Authority Higher Educational Facilities | | | 5.000 | | | | 11/01/2043 | | | Aa1 | | | 1,000,000 | | | | 1,089,450 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 8,380,567 | |
| MISCELLANEOUS PUBLIC IMPROVEMENT BONDS | | | | | | | | | | | | | | | | | | |
| 7.89% of Net Assets | | | | | | | | | | | | | | | | | | |
Memphis Shelby County TN Port Authority Community Development | | | 5.000 | | | | 04/01/2035 | | | Aa3 | | | 625,000 | | | | 642,206 | |
Memphis TN | | | 4.000 | | | | 06/01/2041 | | | Aa2 | | | 1,120,000 | | | | 1,256,416 | |
Memphis TN Refunding and General Impact General Obligation | | | 5.000 | | | | 05/01/2036 | | | Aa2 | | | 850,000 | | | | 878,951 | |
Metropolitan Government Nashville & Davidson County TN | | | 4.000 | | | | 07/01/2033 | | | Aa2 | | | 1,470,000 | | | | 1,711,301 | |
Metropolitan Government Nashville & Davidson County TN | | | 4.000 | | | | 07/01/2034 | | | Aa2 | | | 500,000 | | | | 578,480 | |
Metropolitan Government Nashville & Davidson County TN | | | 4.000 | | | | 07/01/2036 | | | Aa2 | | | 500,000 | | | | 584,075 | |
TN State Series A | | | 5.000 | | | | 02/01/2036 | | | Aaa | | | 1,500,000 | | | | 1,898,445 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 7,549,874 | |
| PREREFUNDED BONDS | | | | | | | | | | | | | | | | | | |
| 7.37% of Net Assets | | | | | | | | | | | | | | | | | | |
Clarksville TN Electric Systems Revenue | | | 5.000 | | | | 09/01/2032 | | | Aa2 | | | 480,000 | | | | 483,557 | |
Clarksville TN Water Sewer & Gas Revenue | | | 5.000 | | | | 02/01/2033 | | | Aa2 | | | 500,000 | | | | 560,080 | |
Clarksville TN Water Sewer & Gas Revenue | | | 5.000 | | | | 02/01/2038 | | | Aa2 | | | 1,000,000 | | | | 1,120,160 | |
Gallatin TN Water & Sewer Revenue | | | 5.000 | | | | 01/01/2032 | | | AA* | | | 235,000 | | | | 277,537 | |
Johnson City TN Health & Educational Facilities Escrowed | | | 5.125 | | | | 07/01/2025 | | | NR | | | 55,000 | | | | 55,325 | |
Knox Chapman TN Utility District | | | 5.250 | | | | 01/01/2036 | | | AA-* | | | 700,000 | | | | 717,500 | |
Shelby County TN Health Education & Housing Facilities | | | 5.000 | | | | 05/01/2027 | | | A1 | | | 750,000 | | | | 812,610 | |
Shelby County TN Health Education & Housing Facilities Board Rhodes College | | | 5.000 | | | | 08/01/2030 | | | A2 | | | 500,000 | | | | 525,125 | |
Shelby County TN Health Education & Housing Facilities Board Rhodes College | | | 5.000 | | | | 08/01/2040 | | | A2 | | | 650,000 | | | | 737,445 | |
Watauga River TN Regional Water Authority Waterworks | | | 5.000 | | | | 07/01/2034 | | | A* | | | 500,000 | | | | 545,200 | |
West Wilson Utility District TN Waterworks | | | 5.000 | | | | 06/01/2033 | | | NR | | | 1,170,000 | | | | 1,220,005 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 7,054,544 | |
| HOSPITAL AND HEALTHCARE REVENUE BONDS | | | | | | | | | | | | | | | | | | |
| 6.62% of Net Assets | | | | | | | | | | | | | | | | | | |
Metropolitan Government Nashville & Davidson County TN Health | | | 5.000 | | | | 07/01/2035 | | | A3 | | | 2,500,000 | | | | 2,870,400 | |
Metropolitan Government Nashville & Davidson County TN Health | | | 5.000 | | | | 07/01/2040 | | | A3 | | | 950,000 | | | | 1,074,830 | |
Shelby County TN Health Education & Housing Facilities | | | 5.000 | | | | 05/01/2036 | | | A1 | | | 1,535,000 | | | | 1,803,165 | |
Shelby County TN Health Education & Housing Facilities — LeBonheur | | | 5.000 | | | | 05/01/2035 | | | A1 | | | 500,000 | | | | 589,780 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 6,338,175 | |
| REFUNDING BONDS | | | | | | | | | | | | | | | | | | |
| 5.40% of Net Assets | | | | | | | | | | | | | | | | | | |
Blount County TN | | | 5.000 | | | | 06/01/2037 | | | Aa2 | | | 1,200,000 | | | | 1,440,047 | |
Jackson TN Refunding | | | 4.000 | | | | 06/01/2037 | | | AA* | | | 405,000 | | | | 479,212 | |
Manchester TN | | | 5.000 | | | | 06/01/2038 | | | A2 | | | 80,000 | | | | 80,133 | |
The accompanying footnotes are an integral part of the financial statements.
34
DUPREE MUTUAL FUNDS — TENNESSEE TAX-FREE INCOME SERIES
SCHEDULE OF PORTFOLIO INVESTMENTS
Tennessee Municipal Bonds
June 30, 2020
| | | | | | | | | | | | | | | | | | |
| Bond Description | | Coupon | | | Maturity
Date | | | Rating# | | Par Value | | | Fair Value | |
Memphis TN General Improvement | | | 5.000 | % | | | 04/01/2034 | | | Aa2 | | $ | 500,000 | | | $ | 575,475 | |
Memphis TN General Improvement | | | 5.000 | | | | 04/01/2039 | | | Aa2 | | | 250,000 | | | | 285,248 | |
Memphis TN Refunding | | | 5.000 | | | | 04/01/2030 | | | Aa2 | | | 1,000,000 | | | | 1,159,790 | |
Memphis TN Refunding | | | 5.000 | | | | 04/01/2033 | | | Aa2 | | | 250,000 | | | | 288,238 | |
Memphis TN Refunding | | | 5.000 | | | | 04/01/2035 | | | Aa2 | | | 250,000 | | | | 287,038 | |
Memphis TN Refunding | | | 5.000 | | | | 04/01/2040 | | | Aa2 | | | 500,000 | | | | 570,300 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 5,165,481 | |
| AIRPORT REVENUE BONDS | | | | | | | | | | | | | | | | | | |
| 2.60% of Net Assets | | | | | | | | | | | | | | | | | | |
Metropolitan Nashville Airport Authority | | | 5.000 | | | | 07/01/2034 | | | A1 | | | 800,000 | | | | 908,408 | |
Metropolitan Nashville Airport Authority | | | 5.000 | | | | 07/01/2035 | | | A1 | | | 250,000 | | | | 282,863 | |
Metropolitan Nashville Airport Authority | | | 5.000 | | | | 07/01/2040 | | | A1 | | | 1,160,000 | | | | 1,299,060 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 2,490,331 | |
| INDUSTRIAL REVENUE BONDS | | | | | | | | | | | | | | | | | | |
| .92% of Net Assets | | | | | | | | | | | | | | | | | | |
Industrial Development Board TN Blount County | | | 5.000 | | | | 06/01/2027 | | | Aa3 | | | 850,000 | | | | 884,561 | |
| | | | | | | | | | | | | | | | | | |
| STATE AND LOCAL MORTGAGE/HOUSING BONDS | | | | | | | | | | | | | | | | | | |
| .32% of Net Assets | | | | | | | | | | | | | | | | | | |
TN Housing Development Agency Housing Finance Program | | | 4.850 | | | | 01/01/2025 | | | Aa2 | | | 310,000 | | | | 310,034 | |
| | | | | | | | | | | | | | | | | | |
Total Investments 97.78% of Net Assets (cost $87,774,439) (See (a) below for further explanation) | | | $ | 93,560,665 | |
| | | | | | | | | | | | | | | | | | |
Other assets in excess of liabilities 2.22% | | | | | | | | | | | | | | | | | 2,119,541 | |
| | | | | | | | | | | | | | | | | | |
Net Assets 100% | | | | | | | | | | | | | | | | $ | 95,680,206 | |
| | | | | | | | | | | | | | | | | | |
| | # | | Ratings by Moody’s Investors Service unless noted otherwise. |
| | | | Bond ratings are unaudited and not covered by Report of Independent Registered Public Accounting Firm. |
| | | | All ratings are as of the date indicated and do not reflect subsequent changes. |
| | * | | Rated by Standard & Poor’s Corporation |
| | @ | | Rated by Fitch’s Investors Service |
| | ** | | Security is segregated — see footnote 1(D) |
| (a) | | Cost for federal income tax purposes is $87,774,439 and net unrealized appreciation of investments is as follows: |
| | | | | | |
| | Unrealized appreciation | | $ | 5,786,226 | |
| | Unrealized depreciation | | | — | |
| | | | | | |
| | Net unrealized appreciation | | $ | 5,786,226 | |
| | | | | | |
Other Information
The following is a summary of the inputs used, as of June 30, 2020, involving the Fund’s investments in securities carried at fair value. The inputs or methodology used for valuing securities may not be an indication of the risk associated with investing in those securities. For more information on valuation inputs, and their aggregation into the levels used in the table below, please refer to the Security Valuation section in the accompanying Notes to Financial Statements.
| | | | | | |
| | | Valuation Inputs | | Municipal Bonds | |
Level 1 | | Quoted Prices | | $ | — | |
Level 2 | | Other Significant Observable Inputs | | | 93,560,665 | |
Level 3 | | Significant Unobservable Inputs | | | — | |
| | | | | | |
| | | | $ | 93,560,665 | |
| | | | | | |
The accompanying footnotes are an integral part of the financial statements.
35
TENNESSEE TAX-FREE INCOME SERIES
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2020
| | | | | | | | |
ASSETS: | | | | | | | | |
Investments in securities, at fair value (Cost: $87,774,439) | | | | | | $ | 93,560,665 | |
Cash | | | | | | | 1,645,429 | |
Interest receivable | | | | | | | 1,139,586 | |
| | | | | | | | |
Total assets | | | | | | | 96,345,680 | |
LIABILITIES: | | | | | | | | |
Payable for: | | | | | | | | |
Distributions to shareholders | | | 210,181 | | | | | |
Fund shares redeemed | | | 374,993 | | | | | |
Investment advisory fee | | | 39,176 | | | | | |
Transfer agent fee | | | 10,084 | | | | | |
Professional fees | | | 13,839 | | | | | |
Custodian expense | | | 3,117 | | | | | |
Trustees fees | | | 2,202 | | | | | |
Accrued expenses | | | 11,882 | | | | | |
| | | | | | | | |
Total liabilities | | | | | | | 665,474 | |
| | | | | | | | |
NET ASSETS: | | | | | | | | |
Capital | | | | | | | 90,199,545 | |
Total distributable earnings | | | | | | | 5,480,661 | |
| | | | | | | | |
Net assets at value | | | | | | $ | 95,680,206 | |
| | | | | | | | |
NET ASSET VALUE, offering price and redemption price per share
(8,206,065 shares outstanding; unlimited number of shares authorized; no par value) | | | | | | $ | 11.66 | |
| | | | | | | | |
STATEMENT OF OPERATIONS
For the year ended June 30, 2020
| | | | |
Net investment income: | | | | |
Interest income | | $ | 3,131,148 | |
| | | | |
Expenses: | | | | |
Investment advisory fee | | | 501,144 | |
Transfer agent fee | | | 126,502 | |
Professional fees | | | 28,711 | |
Custodian expense | | | 18,631 | |
Trustees fees | | | 11,886 | |
Audit expense | | | 6,518 | |
Pricing fees | | | 5,014 | |
Registration expense | | | 3,843 | |
Other expenses | | | 11,795 | |
| | | | |
Total expenses | | | 714,044 | |
Fees waived by Adviser (Note 2) | | | (8,041 | ) |
Custodian expense reduction | | | (668 | ) |
| | | | |
Net expenses | | | 705,335 | |
| | | | |
Net investment income | | | 2,425,813 | |
| | | | |
Realized and unrealized gain on investments: | | | | |
Net realized gain | | | 122,701 | |
Net change in unrealized appreciation/(depreciation) | | | 1,102,071 | |
| | | | |
Net realized and unrealized gain on investments | | | 1,224,772 | |
| | | | |
Net increase in net assets resulting from operations | | $ | 3,650,585 | |
| | | | |
The accompanying footnotes are an integral part of the financial statements.
36
TENNESSEE TAX-FREE INCOME SERIES
STATEMENTS OF CHANGES IN NET ASSETS
For the years ended June 30, 2020 and 2019
| | | | | | | | |
| | | 2020 | | | 2019 | |
Operations: | | | | | | | | |
Net investment income | | $ | 2,425,813 | | | $ | 2,711,761 | |
Net realized gain/(loss) on investments | | | 122,701 | | | | (146,789 | ) |
Net change in unrealized appreciation/(depreciation) | | | 1,102,071 | | | | 2,532,500 | |
| | | | | | | | |
Net increase in net assets resulting from operations | | | 3,650,585 | | | | 5,097,472 | |
Total distributions (Note 6) | | | (2,425,813 | ) | | | (2,711,761 | ) |
Net Fund share transactions (Note 4) | | | (9,751,519 | ) | | | (6,300,251 | ) |
| | | | | | | | |
Total decrease | | | (8,526,747 | ) | | | (3,914,540 | ) |
Net assets: | | | | | | | | |
Beginning of year | | | 104,206,953 | | | | 108,121,493 | |
| | | | | | | | |
End of year | | $ | 95,680,206 | | | $ | 104,206,953 | |
| | | | | | | | |
FINANCIAL HIGHLIGHTS
| | | | | | | | | | | | | | | | | | | | |
| Selected data for a share outstanding: | | For the years ended June 30, | |
| | | 2020 | | | 2019 | | | 2018 | | | 2017 | | | 2016 | |
Net asset value, beginning of year | | $ | 11.51 | | | $ | 11.24 | | | $ | 11.44 | | | $ | 11.89 | | | $ | 11.51 | |
| | | | | | | | | | | | | | | | | | | | |
Income from investment operations: | | | | | | | | | | | | | | | | | | | | |
Net investment income | | | 0.28 | | | | 0.30 | | | | 0.31 | | | | 0.33 | | | | 0.34 | |
Net gains/(losses) on investments | | | 0.15 | | | | 0.27 | | | | (0.20 | ) | | | (0.45 | ) | | | 0.38 | |
| | | | | | | | | | | | | | | | | | | | |
Total from investment operations | | | 0.43 | | | | 0.57 | | | | 0.11 | | | | (0.12 | ) | | | 0.72 | |
Less distributions: | | | | | | | | | | | | | | | | | | | | |
Distributions from net investment income | | | (0.28 | ) | | | (0.30 | ) | | | (0.31 | ) | | | (0.33 | ) | | | (0.34 | ) |
| | | | | | | | | | | | | | | | | | | | |
Net asset value, end of year | | $ | 11.66 | | | $ | 11.51 | | | $ | 11.24 | | | $ | 11.44 | | | $ | 11.89 | |
| | | | | | | | | | | | | | | | | | | | |
Total return | | | 3.77% | | | | 5.12% | | | | 0.94% | | | | (1.03 | )% | | | 6.40% | |
Net assets, end of year (in thousands) | | $ | 95,680 | | | $ | 104,207 | | | $ | 108,121 | | | $ | 108,260 | | | $ | 116,831 | |
Ratio of net expenses to average net assets (a) | | | 0.70% | | | | 0.70% | | | | 0.70% | | | | 0.70% | | | | 0.71% | |
Ratio of gross expenses to average net assets | | | 0.71% | | | | 0.71% | | | | 0.71% | | | | 0.71% | | | | 0.71% | |
Ratio of net investment income to average net assets | | | 2.42% | | | | 2.63% | | | | 2.70% | | | | 2.82% | | | | 2.96% | |
Portfolio turnover | | | 3.46% | | | | 6.46% | | | | 15.77% | | | | 9.27% | | | | 9.67% | |
| (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. |
The accompanying footnotes are an integral part of the financial statements.
37
DUPREE MUTUAL FUNDS — TENNESSEE TAX-FREE SHORT-TO-MEDIUM SERIES
SCHEDULE OF PORTFOLIO INVESTMENTS
Tennessee Municipal Bonds
June 30, 2020
| | | | | | | | | | | | | | | | | | |
| Bond Description | | Coupon | | | Maturity
Date | | | Rating# | | Par Value | | | Fair Value | |
| REFUNDING BONDS | | | | | | | | | | | | | | | | | | |
| 25.88% of Net Assets | | | | | | | | | | | | | | | | | | |
Maryville TN | | | 5.000 | % | | | 06/01/2026 | | | Aa3 | | $ | 350,000 | | | $ | 435,050 | |
Memphis TN General Improvement** | | | 5.000 | | | | 11/01/2023 | | | Aa2 | | | 350,000 | | | | 403,427 | |
Memphis-Shelby County TN Industrial Development Board | | | 5.000 | | | | 11/01/2027 | | | Aa3 | | | 200,000 | | | | 251,654 | |
Metropolitan Government Nashville & Davidson County TN | | | 5.000 | | | | 07/01/2021 | | | Aa2 | | | 75,000 | | | | 75,134 | |
Metropolitan Government Nashville & Davidson County TN | | | 4.000 | | | | 07/01/2023 | | | Aa2 | | | 110,000 | | | | 110,076 | |
Metropolitan Government Nashville & Davidson County TN | | | 4.000 | | | | 07/01/2024 | | | Aa2 | | | 80,000 | | | | 85,673 | |
Putnam County TN | | | 4.000 | | | | 04/01/2025 | | | Aa2 | | | 300,000 | | | | 347,262 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 1,708,276 | |
| PUBLIC FACILITIES REVENUE BONDS | | | | | | | | | | | | | | | | | | |
| 22.84% of Net Assets | | | | | | | | | | | | | | | | | | |
Memphis TN Center City Revenue Finance Corporation Sports Facility | | | 4.000 | | | | 02/01/2021 | | | Aa3 | | | 100,000 | | | | 102,171 | |
Memphis TN Center City Revenue Finance Corporation Sports Facility | | | 4.000 | | | | 02/01/2022 | | | Aa3 | | | 220,000 | | | | 232,725 | |
Memphis-Shelby County TN Industrial Development Board | | | 5.000 | | | | 11/01/2024 | | | Aa3 | | | 250,000 | | | | 298,312 | |
Metropolitan Government Nashville & Davidson County TN Sports Authority | | | 5.000 | | | | 07/01/2023 | | | Aa3 | | | 125,000 | | | | 141,664 | |
Metropolitan Government Nashville & Davidson County TN Sports Authority | | | 5.250 | | | | 08/01/2024 | | | Aa3 | | | 190,000 | | | | 215,722 | |
Metropolitan Government Nashville & Davidson County TN Sports Authority | | | 5.250 | | | | 08/01/2025 | | | Aa3 | | | 195,000 | | | | 221,270 | |
Metropolitan Government Nashville & Davidson County TN Sports Authority | | | 5.250 | | | | 08/01/2026 | | | Aa3 | | | 100,000 | | | | 113,079 | |
Pigeon Forge Industrial Development Board | | | 5.000 | | | | 06/01/2024 | | | AA* | | | 175,000 | | | | 182,280 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 1,507,223 | |
| MUNICIPAL UTILITY REVENUE BONDS | | | | | | | | | | | | | | | | | | |
| 20.64% of Net Assets | | | | | | | | | | | | | | | | | | |
Chattanooga TN Electric Revenue** | | | 5.000 | | | | 09/01/2023 | | | AA* | | | 250,000 | | | | 286,268 | |
Erwin TN Utilities Authority Electric System | | | 5.000 | | | | 09/01/2026 | | | A* | | | 50,000 | | | | 61,499 | |
Hallsdale-Powell TN Utility District | | | 4.000 | | | | 04/01/2028 | | | AA* | | | 255,000 | | | | 297,039 | |
Maryville TN | | | 4.000 | | | | 06/01/2029 | | | Aa3 | | | 250,000 | | | | 292,375 | |
Metropolitan Government Nashville & Davidson County TN Water & Sewer | | | 5.000 | | | | 07/01/2026 | | | Aa2 | | | 100,000 | | | | 113,395 | |
Springfield TN | | | 5.000 | | | | 06/01/2027 | | | Aa3 | | | 245,000 | | | | 311,483 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 1,362,059 | |
| SCHOOL IMPROVEMENT BONDS | | | | | | | | | | | | | | | | | | |
| 12.97% of Net Assets | | | | | | | | | | | | | | | | | | |
Bedford County TN | | | 4.000 | | | | 04/01/2027 | | | AA* | | | 250,000 | | | | 292,740 | |
Rhea County TN | | | 4.000 | | | | 04/01/2025 | | | A1 | | | 250,000 | | | | 264,300 | |
White County TN | | | 4.000 | | | | 06/01/2027 | | | AA-* | | | 260,000 | | | | 299,104 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 856,144 | |
| UNIVERSITY CONSOLIDATED EDUCATION AND BUILDING REVENUE BONDS | |
| 9.74% of Net Assets | | | | | | | | | | | | | | | | | | |
Franklin County TN Health & Educational Facilities Board | | | 4.000 | | | | 09/01/2024 | | | A+* | | | 135,000 | | | | 144,907 | |
Shelby County TN Health Educational & Housing Facilities Rhodes College | | | 5.000 | | | | 08/01/2022 | | | A2 | | | 120,000 | | | | 129,910 | |
Shelby County TN Health Educational & Housing Facilities Rhodes College | | | 4.000 | | | | 08/01/2025 | | | A2 | | | 100,000 | | | | 114,199 | |
Shelby County TN Health Educational & Housing Facilities Rhodes College | | | 4.000 | | | | 08/01/2027 | | | A2 | | | 225,000 | | | | 253,976 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 642,992 | |
| PREREFUNDED BONDS | | | | | | | | | | | | | | | | | | |
| 1.94% of Net Assets | | | | | | | | | | | | | | | | | | |
Memphis TN Center City Revenue Finance Corporation | | | 5.250 | | | | 11/01/2025 | | | Aa3 | | | 100,000 | | | | 106,539 | |
Metropolitan Government Nashville & Davidson County TN | | | 4.000 | | | | 07/01/2024 | | | NR | | | 20,000 | | | | 21,456 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 127,995 | |
| AIRPORT REVENUE BONDS | | | | | | | | | | | | | | | | | | |
| 1.64% of Net Assets | | | | | | | | | | | | | | | | | | |
Metropolitan Nashville Airport Authority | | | 4.000 | | | | 07/01/2023 | | | A1 | | | 100,000 | | | | 108,296 | |
| | | | | | | | | | | | | | | | | | |
The accompanying footnotes are an integral part of the financial statements.
38
DUPREE MUTUAL FUNDS — TENNESSEE TAX-FREE SHORT-TO-MEDIUM SERIES
SCHEDULE OF PORTFOLIO INVESTMENTS
Tennessee Municipal Bonds
June 30, 2020
| | | | | | | | | | | | | | | | | | |
| Bond Description | | Coupon | | | Maturity
Date | | | Rating# | | Par Value | | | Fair Value | |
| MISCELLANEOUS PUBLIC IMPROVEMENT BONDS | | | | | | | | | | | | | | | | | | |
| .61% of Net Assets | | | | | | | | | | | | | | | | | | |
Selmer TN | | | 4.000 | % | | | 06/01/2025 | | | AA* | | $ | 35,000 | | | $ | 40,355 | |
| | | | | | | | | | | | | | | | | | |
Total Investments 96.26% of Net Assets (cost $5,995,195) (See (a) below for further explanation) | | | $ | 6,353,340 | |
| | | | | | | | | | | | | | | | | | |
Other assets in excess of liabilities 3.74% | | | | | | | | | | | | | | | | | 246,911 | |
| | | | | | | | | | | | | | | | | | |
Net Assets 100% | | | | | | | | | | | | | | | | $ | 6,600,251 | |
| | | | | | | | | | | | | | | | | | |
| | # | | Ratings by Moody’s Investors Service unless noted otherwise. |
| | | | Bond ratings are unaudited and not covered by Report of Independent Registered Public Accounting Firm. |
| | | | All ratings are as of the date indicated and do not reflect subsequent changes. |
| | * | | Rated by Standard & Poor’s Corporation |
| | @ | | Rated by Fitch’s Investors Service |
| | ** | | Security is segregated — see footnote 1(D) |
| (a) | | Cost for federal income tax purposes is $5,995,195 and net unrealized appreciation of investments is as follows: |
| | | | | | |
| | Unrealized appreciation | | $ | 358,145 | |
| | Unrealized depreciation | | | — | |
| | | | | | |
| | Net unrealized appreciation | | $ | 358,145 | |
| | | | | | |
Other Information
The following is a summary of the inputs used, as of June 30, 2020, involving the Fund’s investments in securities carried at fair value. The inputs or methodology used for valuing securities may not be an indication of the risk associated with investing in those securities. For more information on valuation inputs, and their aggregation into the levels used in the table below, please refer to the Security Valuation section in the accompanying Notes to Financial Statements.
| | | | | | |
| | | Valuation Inputs | | Municipal Bonds | |
Level 1 | | Quoted Prices | | $ | — | |
Level 2 | | Other Significant Observable Inputs | | | 6,353,340 | |
Level 3 | | Significant Unobservable Inputs | | | — | |
| | | | | | |
| | | | $ | 6,353,340 | |
| | | | | | |
The accompanying footnotes are an integral part of the financial statements.
39
TENNESSEE TAX-FREE SHORT-TO-MEDIUM SERIES
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2020
| | | | | | | | |
ASSETS: | | | | | | | | |
Investments in securities, at fair value (Cost: $5,995,195) | | | | | | $ | 6,353,340 | |
Cash | | | | | | | 199,784 | |
Interest receivable | | | | | | | 67,153 | |
| | | | | | | | |
Total assets | | | | | | | 6,620,277 | |
LIABILITIES: | | | | | | | | |
Payable for: | | | | | | | | |
Distributions to shareholders | | | 2,129 | | | | | |
Fund shares redeemed | | | 1,588 | | | | | |
Investment advisory fee | | | 854 | | | | | |
Transfer agent fee | | | 941 | | | | | |
Professional fees | | | 3,701 | | | | | |
Custodian expense | | | 2,798 | | | | | |
Trustees fees | | | 811 | | | | | |
Accrued expenses | | | 7,204 | | | | | |
| | | | | | | | |
Total liabilities | | | | | | | 20,026 | |
| | | | | | | | |
NET ASSETS: | | | | | | | | |
Capital | | | | | | | 6,511,687 | |
Total distributable gain | | | | | | | 88,564 | |
| | | | | | | | |
Net assets at value | | | | | | $ | 6,600,251 | |
| | | | | | | | |
NET ASSET VALUE, offering price and redemption price per share
(599,037 shares outstanding; unlimited number of shares authorized; no par value) | | | | | | $ | 11.02 | |
| | | | | | | | |
STATEMENT OF OPERATIONS
For the year ended June 30, 2020
| | | | |
Net investment income: | | | | |
Interest income | | $ | 160,504 | |
| | | | |
Expenses: | | | | |
Investment advisory fee | | | 34,795 | |
Transfer agent fee | | | 10,439 | |
Registration expense | | | 9,320 | |
Custodian expense | | | 8,118 | |
Compliance fees | | | 6,797 | |
Pricing expense | | | 4,164 | |
Professional fees | | | 1,997 | |
Trustees fees | | | 827 | |
Other expenses | | | 3,163 | |
| | | | |
Total expenses | | | 79,620 | |
Fees waived by Adviser (Note 2) | | | (30,381 | ) |
Custodian expense reduction | | | (291 | ) |
| | | | |
Net expenses | | | 48,948 | |
| | | | |
Net investment income | | | 111,556 | |
| | | | |
Realized and unrealized gain on investments: | | | | |
Net realized gain | | | 1,796 | |
Net change in unrealized appreciation/(depreciation) | | | 122,943 | |
| | | | |
Net realized and unrealized gain on investments | | | 124,739 | |
| | | | |
Net increase in net assets resulting from operations | | $ | 236,295 | |
| | | | |
The accompanying footnotes are an integral part of the financial statements.
40
TENNESSEE TAX-FREE SHORT-TO-MEDIUM SERIES
STATEMENTS OF CHANGES IN NET ASSETS
For the years ended June 30, 2020 and 2019
| | | | | | | | |
| | | 2020 | | | 2019 | |
Operations: | | | | | | | | |
Net investment income | | $ | 111,556 | | | $ | 129,383 | |
Net realized gain on investments | | | 1,796 | | | | (40,709 | ) |
Net change in unrealized appreciation/(depreciation) | | | 122,943 | | | | 242,431 | |
| | | | | | | | |
Net increase in net assets resulting from operations | | | 236,295 | | | | 331,105 | |
Total distributions (Note 6) | | | (111,556 | ) | | | (129,383 | ) |
Net Fund share transactions (Note 4) | | | (763,504 | ) | | | (2,965,492 | ) |
| | | | | | | | |
Total decrease | | | (638,765 | ) | | | (2,763,770 | ) |
Net assets: | | | | | | | | |
Beginning of year | | | 7,239,016 | | | | 10,002,786 | |
| | | | | | | | |
End of year | | $ | 6,600,251 | | | $ | 7,239,016 | |
| | | | | | | | |
FINANCIAL HIGHLIGHTS
| | | | | | | | | | | | | | | | | | | | |
| Selected data for a share outstanding: | | For the years ended June 30, | |
| | | 2020 | | | 2019 | | | 2018 | | | 2017 | | | 2016 | |
Net asset value, beginning of year | | $ | 10.82 | | | $ | 10.52 | | | $ | 10.70 | | | $ | 10.93 | | | $ | 10.74 | |
| | | | | | | | | | | | | | | | | | | | |
Income from investment operations: | | | | | | | | | | | | | | | | | | | | |
Net investment income | | | 0.17 | | | | 0.17 | | | | 0.16 | | | | 0.17 | | | | 0.16 | |
Net gains/(losses) on investments both realized and unrealized | | | 0.20 | | | | 0.30 | | | | (0.18 | ) | | | (0.23 | ) | | | 0.19 | |
| | | | | | | | | | | | | | | | | | | | |
Total from investment operations | | | 0.37 | | | | 0.47 | | | | (0.02 | ) | | | (0.06 | ) | | | 0.35 | |
Less distributions: | | | | | | | | | | | | | | | | | | | | |
Distributions from net investment income | | | (0.17 | ) | | | (0.17 | ) | | | (0.16 | ) | | | (0.17 | ) | | | (0.16 | ) |
| | | | | | | | | | | | | | | | | | | | |
Net asset value, end of year | | $ | 11.02 | | | $ | 10.82 | | | $ | 10.52 | | | $ | 10.70 | | | $ | 10.93 | |
| | | | | | | | | | | | | | | | | | | | |
Total return | | | 3.49% | | | | 4.48% | | | | (0.17 | )% | | | (0.54 | )% | | | 3.28% | |
Net assets, end of year (in thousands) | | $ | 6,600 | | | $ | 7,239 | | | $ | 10,003 | | | $ | 10,499 | | | $ | 11,340 | |
Ratio of net expenses to average net assets (a) | | | 0.70% | | | | 0.71% | | | | 0.70% | | | | 0.75% | | | | 0.86% | |
Ratio of gross expenses to average net assets | | | 1.14% | | | | 1.08% | | | | 0.98% | | | | 0.88% | | | | 0.86% | |
Ratio of net investment income to average net assets | | | 1.60% | | | | 1.57% | | | | 1.53% | | | | 1.59% | | | | 1.47% | |
Portfolio turnover | | | 4.55% | | | | 10.64% | | | | 22.75% | | | | 10.95% | | | | 7.37% | |
| (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. |
The accompanying footnotes are an integral part of the financial statements.
41
DUPREE MUTUAL FUNDS — INTERMEDIATE GOVERNMENT BOND SERIES
SCHEDULE OF PORTFOLIO INVESTMENTS
U.S. Government Securities and Agencies
June 30, 2020
| | | | | | | | | | | | | | | | | | |
| Bond Description | | Coupon | | | Maturity
Date | | | Rating# | | Par Value | | | Fair Value | |
| FEDERAL FARM CREDIT | | | | | | | | | | | | | | | | | | |
| 67.34% of Net Assets | | | | | | | | | | | | | | | | | | |
Federal Farm Credit Bank | | | 5.050 | % | | | 12/21/2021 | | | Aaa | | $ | 370,000 | | | $ | 396,358 | |
Federal Farm Credit Bank** | | | 5.250 | | | | 05/10/2022 | | | Aaa | | | 2,000,000 | | | | 2,185,312 | |
Federal Farm Credit Bank** | | | 5.840 | | | | 07/20/2022 | | | Aaa | | | 2,650,000 | | | | 2,952,465 | |
Federal Farm Credit Bank** | | | 5.250 | | | | 10/25/2022 | | | Aaa | | | 1,500,000 | | | | 1,672,254 | |
Federal Farm Credit Bank | | | 5.125 | | | | 11/28/2022 | | | Aaa | | | 2,000,000 | | | | 2,232,488 | |
Federal Farm Credit Bank | | | 2.375 | | | | 08/01/2029 | | | Aaa | | | 1,000,000 | | | | 1,117,885 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 10,556,762 | |
| FEDERAL HOME LOAN BANK | | | | | | | | | | | | | | | | | | |
| 29.25% of Net Assets | | | | | | | | | | | | | | | | | | |
Federal Home Loan Bank | | | 5.000 | | | | 12/10/2021 | | | Aaa | | | 250,000 | | | | 267,081 | |
Federal Home Loan Bank | | | 5.750 | | | | 06/10/2022 | | | Aaa | | | 2,000,000 | | | | 2,211,286 | |
Federal Home Loan Bank | | | 5.365 | | | | 09/09/2024 | | | Aaa | | | 1,750,000 | | | | 2,107,378 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 4,585,745 | |
| | | | | | | | | | | | | | | | | | |
Total Investments 96.59% of Net Assets (cost $14,148,494) (See (a) below for further explanation) | | | $ | 15,142,507 | |
| | | | | | | | | | | | | | | | | | |
Other assets in excess of liabilities 3.41% | | | | | | | | | | | | | | | | | 534,917 | |
| | | | | | | | | | | | | | | | | | |
Net Assets 100% | | | | | | | | | | | | | | | | $ | 15,677,424 | |
| | | | | | | | | | | | | | | | | | |
| | # | | Ratings by Moody’s Investors Service unless noted otherwise. |
| | | | Bond ratings are unaudited and not covered by Report of Independent Registered Public Accounting Firm. |
| | | | All ratings are as of the date indicated and do not reflect subsequent changes. |
| | * | | Rated by Standard & Poor’s Corporation |
| | @ | | Rated by Fitch’s Investors Service |
| | ** | | Security is segregated — see footnote 1(D) |
| (a) | | Cost for federal income tax purposes is $14,148,494 and net unrealized appreciation of investments is as follows: |
| | | | | | |
| | Unrealized appreciation | | $ | 994,013 | |
| | Unrealized depreciation | | | — | |
| | | | | | |
| | Net unrealized appreciation | | $ | 994,013 | |
| | | | | | |
Other Information
The following is a summary of the inputs used, as of June 30, 2020, involving the Fund’s investments in securities carried at fair value. The inputs or methodology used for valuing securities may not be an indication of the risk associated with investing in those securities. For more information on valuation inputs, and their aggregation into the levels used in the table below, please refer to the Security Valuation section in the accompanying Notes to Financial Statements.
| | | | | | |
| | | Valuation Inputs | | Government Agencies | |
Level 1 | | Quoted Prices | | $ | — | |
Level 2 | | Other Significant Observable Inputs | | | 15,142,507 | |
Level 3 | | Significant Unobservable Inputs | | | — | |
| | | | | | |
| | | | $ | 15,142,507 | |
| | | | | | |
The accompanying footnotes are an integral part of the financial statements.
42
INTERMEDIATE GOVERNMENT BOND SERIES
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2020
| | | | | | | | |
ASSETS: | | | | | | | | |
Investments in securities, at fair value (Cost: $14,148,494) | | | | | | $ | 15,142,507 | |
Cash | | | | | | | 403,576 | |
Interest receivable | | | | | | | 154,788 | |
| | | | | | | | |
Total assets | | | | | | | 15,700,871 | |
LIABILITIES: | | | | | | | | |
Payable for: | | | | | | | | |
Distributions to shareholders | | | 4,407 | | | | | |
Investment advisory fee | | | 2,561 | | | | | |
Transfer agent fee | | | 1,921 | | | | | |
Professional fees | | | 3,316 | | | | | |
Custodian expense | | | 3,201 | | | | | |
Trustee fees | | | 767 | | | | | |
Accrued expenses | | | 7,274 | | | | | |
| | | | | | | | |
Total liabilities | | | | | | | 23,447 | |
| | | | | | | | |
NET ASSETS: | | | | | | | | |
Capital | | | | | | | 14,824,533 | |
Total distributable earnings | | | | | | | 852,891 | |
| | | | | | | | |
Net assets at value | | | | | | $ | 15,677,424 | |
| | | | | | | | |
(1,511,607 shares outstanding; unlimited number of shares authorized; no par value) | | | | | | $ | 10.37 | |
| | | | | | | | |
STATEMENT OF OPERATIONS
For the year ended June 30, 2020
| | | | |
Net investment income: | | | | |
Interest income | | $ | 465,282 | |
| | | | |
Expenses: | | | | |
Investment advisory fee | | | 30,893 | |
Transfer agent fee | | | 23,170 | |
Custodian expense | | | 9,989 | |
Printing expense | | | 5,490 | |
Registration expense | | | 11,295 | |
Compliance fees | | | 7,320 | |
Pricing fees | | | 6,954 | |
Professional fees | | | 4,334 | |
Trustee fees | | | 1,793 | |
Other expenses | | | 4,610 | |
| | | | |
Total expenses | | | 105,848 | |
Fees waived by Adviser (Note 2) | | | (210 | ) |
Custodian expense reduction | | | (358 | ) |
| | | | |
Net expenses | | | 105,280 | |
| | | | |
Net investment income | | | 360,002 | |
| | | | |
Realized and unrealized gain on investments: | | | | |
Net realized gain | | | 11,595 | |
Net change in unrealized appreciation/(depreciation) | | | 365,868 | |
| | | | |
Net realized and unrealized gain on investments | | | 377,463 | |
| | | | |
Net increase in net assets resulting from operations | | $ | 737,465 | |
| | | | |
The accompanying footnotes are an integral part of the financial statements.
43
INTERMEDIATE GOVERNMENT BOND SERIES
STATEMENTS OF CHANGES IN NET ASSETS
For the years ended June 30, 2020 and 2019
| | | | | | | | |
| | | 2020 | | | 2019 | |
Operations: | | | | | | | | |
Net investment income | | $ | 360,002 | | | $ | 372,107 | |
Net realized gain on investments | | | 11,595 | | | | 291 | |
Net change in unrealized appreciation/(depreciation) | | | 365,868 | | | | 366,469 | |
| | | | | | | | |
Net increase in net assets resulting from operations | | | 737,465 | | | | 738,867 | |
Total distributions (Note 6) | | | (360,002 | ) | | | (372,107 | ) |
Net Fund share transactions (Note 4) | | | 172,086 | | | | (272,043 | ) |
| | | | | | | | |
Total increase | | | 549,549 | | | | 94,717 | |
Net assets: | | | | | | | | |
Beginning of year | | | 15,127,875 | | | | 15,033,158 | |
| | | | | | | | |
End of year | | $ | 15,677,424 | | | $ | 15,127,875 | |
| | | | | | | | |
FINANCIAL HIGHLIGHTS
| | | | | | | | | | | | | | | | | | | | |
| Selected data for a share outstanding: | | For the years ended June 30, | |
| | | 2020 | | | 2019 | | | 2018 | | | 2017 | | | 2016 | |
Net asset value, beginning of year | | $ | 10.12 | | | $ | 9.87 | | | $ | 10.23 | | | $ | 10.70 | | | $ | 10.29 | |
| | | | | | | | | | | | | | | | | | | | |
Income from investment operations: | | | | | | | | | | | | | | | | | | | | |
Net investment income | | | 0.24 | | | | 0.25 | | | | 0.25 | | | | 0.26 | | | | 0.26 | |
Net gains/(losses) on investments | | | 0.25 | | | | 0.25 | | | | (0.36 | ) | | | (0.47 | ) | | | 0.41 | |
| | | | | | | | | | | | | | | | | | | | |
Total from investment operations | | | 0.49 | | | | 0.50 | | | | (0.11 | ) | | | (0.21 | ) | | | 0.67 | |
Less distributions: | | | | | | | | | | | | | | | | | | | | |
Distributions from net investment income | | | (0.24 | ) | | | (0.25 | ) | | | (0.25 | ) | | | (0.26 | ) | | | (0.26 | ) |
| | | | | | | | | | | | | | | | | | | | |
Net asset value, end of year | | $ | 10.37 | | | $ | 10.12 | | | $ | 9.87 | | | $ | 10.23 | | | $ | 10.70 | |
| | | | | | | | | | | | | | | | | | | | |
Total return | | | 4.88% | | | | 5.12% | | | | (1.05 | )% | | | (1.99 | )% | | | 6.57% | |
Net assets, end of year (in thousands) | | $ | 15,677 | | | $ | 15,128 | | | $ | 15,033 | | | $ | 15,606 | | | $ | 17,476 | |
Ratio of net expenses to average net assets (a) | | | 0.68% | | | | 0.69% | | | | 0.61% | | | | 0.58% | | | | 0.53% | |
Ratio of gross expenses to average net assets | | | 0.68% | | | | 0.69% | | | | 0.61% | | | | 0.58% | | | | 0.53% | |
Ratio of net investment income to average net assets | | | 2.33% | | | | 2.50% | | | | 2.53% | | | | 2.49% | | | | 2.47% | |
Portfolio turnover | | | 5.07% | | | | 0.00% | | | | 1.99% | | | | 0.00% | | | | 0.00% | |
| (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. |
The accompanying footnotes are an integral part of the financial statements.
44
DUPREE MUTUAL FUNDS — TAXABLE MUNICIPAL BOND SERIES
SCHEDULE OF PORTFOLIO INVESTMENTS
Taxable Municipal Bonds
June 30, 2020
| | | | | | | | | | | | | | | | | | |
| Bond Description | | Coupon | | | Maturity
Date | | | Rating# | | Par Value | | | Fair Value | |
| MUNICIPAL UTILITY REVENUE BONDS | | | | | | | | | | | | | | | | | | |
| 23.53% of Net Assets | | | | | | | | | | | | | | | | | | |
Alexandria LA Utilities^ | | | 3.087 | % | | | 05/01/2043 | | | AA* | | $ | 300,000 | | | $ | 318,102 | |
Benton WA Public Water Authority | | | 3.200 | | | | 10/01/2044 | | | AA* | | | 200,000 | | | | 198,324 | |
Cleveland OH Water | | | 3.205 | | | | 01/01/2042 | | | Aa2 | | | 250,000 | | | | 254,833 | |
Eagle River CO Water & Sanitation District | | | 3.010 | | | | 12/01/2042 | | | AA* | | | 325,000 | | | | 334,419 | |
Grant County WA Utility District | | | 3.336 | | | | 01/01/2041 | | | Aa3 | | | 125,000 | | | | 129,920 | |
Lansing MI Board of Water & Light Utilities | | | 3.525 | | | | 07/01/2041 | | | Aa3 | | | 300,000 | | | | 315,735 | |
Metropolitan Government Nashville & Davidson County TN Recovery Zone | | | 6.693 | | | | 07/01/2041 | | | Aa2 | | | 200,000 | | | | 314,472 | |
OK State Municipal Power Authority | | | 6.310 | | | | 01/01/2040 | | | A2 | | | 95,000 | | | | 133,003 | |
Pasco WA Water & Sewer Revenue | | | 3.272 | | | | 12/01/2040 | | | AA-* | | | 245,000 | | | | 261,388 | |
Pigeon Forge TN Build America Recovery Zone | | | 7.125 | | | | 06/01/2040 | | | AA* | | | 300,000 | | | | 371,052 | |
West Knox Utilities District Knox County TN Water and Sewer** | | | 6.900 | | | | 06/01/2040 | | | AA+* | | | 400,000 | | | | 436,953 | |
Williamsport PA Municipal Water Authority Build America | | | 6.100 | | | | 01/01/2040 | | | A2 | | | 60,000 | | | | 60,958 | |
York County VA Sewer Revenue Build America | | | 6.607 | | | | 06/01/2040 | | | Aa3 | | | 100,000 | | | | 100,117 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 3,229,276 | |
| PREREFUNDED BONDS | | | | | | | | | | | | | | | | | | |
| 20.77% of Net Assets | | | | | | | | | | | | | | | | | | |
Altoona PA Water Authority Sewer Revenue Build America | | | 7.064 | | | | 12/01/2040 | | | AA* | | | 425,000 | | | | 435,974 | |
Davie FL Water & Sewer Revenue Build America | | | 6.849 | | | | 10/01/2040 | | | A1 | | | 40,000 | | | | 40,614 | |
FL State Utility Revenue | | | 6.548 | | | | 10/01/2040 | | | A1 | | | 60,000 | | | | 60,892 | |
Grand Junction CO Certificateof Participation Build America | | | 7.500 | | | | 12/01/2030 | | | AA-* | | | 425,000 | | | | 436,637 | |
Heber UT Light & Power Build America | | | 7.000 | | | | 12/15/2030 | | | A2 | | | 375,000 | | | | 385,418 | |
Pennington County SD Certificate of Participation Build America | | | 7.200 | | | | 06/01/2037 | | | Aa1 | | | 750,000 | | | | 768,728 | |
Sarasota County FL Capital Improvement Revenue Build America | | | 7.016 | | | | 10/01/2040 | | | AA+* | | | 710,000 | | | | 721,344 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 2,849,607 | |
| PUBLIC FACILITIES REVENUE BONDS | | | | | | | | | | | | | | | | | | |
| 12.57% of Net Assets | | | | | | | | | | | | | | | | | | |
Decatur GA Urban Redevelopment Agency Revenue Build America | | | 6.920 | | | | 01/01/2038 | | | Aa1 | | | 150,000 | | | | 153,980 | |
Evanston IL Taxable Corporate Purpose Bonds | | | 4.250 | | | | 12/01/2038 | | | Aa2 | | | 275,000 | | | | 302,118 | |
Franklin County OH Convention Facilities Build America | | | 6.540 | | | | 12/01/2036 | | | Aa2 | | | 155,000 | | | | 221,954 | |
Metropolitan Government Nashville & Davidson County TN | | | 7.431 | | | | 07/01/2043 | | | A1 | | | 190,000 | | | | 287,060 | |
Pompano Beach FL Certificate of Participation | | | 5.579 | | | | 01/01/2040 | | | A1 | | | 225,000 | | | | 252,697 | |
Rhode Island Convention Center | | | 6.060 | | | | 05/15/2035 | | | Aa3 | | | 70,000 | | | | 88,857 | |
Tuscon AZ Certificate of Participation | | | 4.831 | | | | 07/01/2034 | | | A1 | | | 130,000 | | | | 161,608 | |
Wilmington NC Limited Obligation | | | 3.090 | | | | 06/01/2040 | | | Aa1 | | | 250,000 | | | | 256,020 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 1,724,294 | |
| SCHOOL IMPROVEMENT BONDS | | | | | | | | | | | | | | | | | | |
| 10.79% of Net Assets | | | | | | | | | | | | | | | | | | |
Armstrong School District PA Build America** | | | 7.000 | | | | 03/15/2041 | | | AA* | | | 750,000 | | | | 782,273 | |
CO State Building Excellent Schools Today Certificate of Participation** | | | 7.017 | | | | 03/15/2031 | | | Aa2 | | | 400,000 | | | | 417,084 | |
Jefferson County TN Build America Bonds | | | 6.625 | | | | 06/01/2040 | | | Aa3 | | | 250,000 | | | | 281,867 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 1,481,224 | |
| UNIVERSITY CONSOLIDATED EDUCATION AND BUILDING REVENUE BONDS | |
| 5.93% of Net Assets | | | | | | | | | | | | | | | | | | |
Mesa CO State College Auxiliary | | | 5.800 | | | | 05/15/2040 | | | Aa2 | | | 170,000 | | | | 235,239 | |
Mesa State College CO Auxiliary Facilities Build America | | | 6.746 | | | | 05/15/2042 | | | Aa2 | | | 100,000 | | | | 155,263 | |
Michigan State University Revenues | | | 4.496 | | | | 08/15/2048 | | | Aa2 | | | 375,000 | | | | 423,634 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 814,136 | |
| MISCELLANEOUS PUBLIC IMPROVEMENT BONDS | | | | | | | | | | | | | | | | | | |
| 5.13% of Net Assets | | | | | | | | | | | | | | | | | | |
KY State Property & Buildings Build America** | | | 5.921 | | | | 11/01/2030 | | | A1 | | | 250,000 | | | | 313,463 | |
Leeds AL Taxable Warrants | | | 4.125 | | | | 05/01/2039 | | | AA* | | | 125,000 | | | | 135,711 | |
Scottsboro AL Build America Bonds | | | 6.400 | | | | 11/01/2040 | | | A2 | | | 250,000 | | | | 254,410 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 703,584 | |
The accompanying footnotes are an integral part of the financial statements.
45
DUPREE MUTUAL FUNDS — TAXABLE MUNICIPAL BOND SERIES
SCHEDULE OF PORTFOLIO INVESTMENTS
Taxable Municipal Bonds
June 30, 2020
| | | | | | | | | | | | | | | | | | |
| Bond Description | | Coupon | | | Maturity
Date | | | Rating# | | Par Value | | | Fair Value | |
| HOSPITAL AND HEALTHCARE REVENUE BONDS | | | | | | | | | | | | | | | | | | |
| 3.90% of Net Assets | | | | | | | | | | | | | | | | | | |
Midland County TX Hospital District | | | 6.440 | % | | | 05/15/2039 | | | Aa3 | | $ | 185,000 | | | $ | 277,929 | |
University NC Chapel Hill Hospital Revenue Build America | | | 6.329 | | | | 02/01/2031 | | | Aa3 | | | 250,000 | | | | 256,760 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | 534,689 | |
| TURNPIKES/TOLLROAD/HIGHWAY REVENUE BONDS | | | | | | | | | | | | | | | | | | |
| 3.23% of Net Assets | | | | | | | | | | | | | | | | | | |
Washoe County NV Highway Revenue | | | 7.969 | | | | 02/01/2040 | | | Aa3 | | | 280,000 | | | | 443,369 | |
| | | | | | | | | | | | | | | | | | |
| MARINA/PORT AUTHORITY REVENUE BONDS | | | | | | | | | | | | | | | | | | |
| 2.27% of Net Assets | | | | | | | | | | | | | | | | | | |
Miami Dade County FL Special Obligation | | | 7.500 | | | | 04/01/2040 | | | Aa3 | | | 200,000 | | | | 311,846 | |
| | | | | | | | | | | | | | | | | | |
| REFUNDING BONDS | | | | | | | | | | | | | | | | | | |
| 2.23% of Net Assets | | | | | | | | | | | | | | | | | | |
Leeds AL | | | 3.097 | | | | 05/01/2048 | | | AA* | | | 300,000 | | | | 306,687 | |
| | | | | | | | | | | | | | | | | | |
| AD VALOREM PROPERTY BONDS | | | | | | | | | | | | | | | | | | |
| 1.97% of Net Assets | | | | | | | | | | | | | | | | | | |
Parker CO Water & Sanitation District | | | 3.062 | | | | 08/01/2040 | | | AA+* | | | 250,000 | | | | 270,808 | |
| | | | | | | | | | | | | | | | | | |
| AIRPORT REVENUE BONDS | | | | | | | | | | | | | | | | | | |
| .96% of Net Assets | | | | | | | | | | | | | | | | | | |
Tri-Cities TN Airport Authority Revenue | | | 3.625 | | | | 05/01/2038 | | | Aa2 | | | 125,000 | | | | 131,270 | |
| | | | | | | | | | | | | | | | | | |
Total Investments 93.28% of Net Assets (cost $11,798,479) (See (a) below for further explanation) | | | $ | 12,800,790 | |
| | | | | | | | | | | | | | | | | | |
Other assets in excess of liabilities 6.72% | | | | | | | | | | | | | | | | | 921,567 | |
| | | | | | | | | | | | | | | | | | |
Net Assets 100% | | | | | | | | | | | | | | | | $ | 13,722,357 | |
| | | | | | | | | | | | | | | | | | |
| | # | | Ratings by Moody’s Investors Service unless noted otherwise. |
| | | | Bond ratings are unaudited and not covered by Report of Independent Registered Public Accounting Firm. |
| | | | All ratings are as of the date indicated and do not reflect subsequent changes. |
| | * | | Rated by Standard & Poor’s Corporation |
| | @ | | Rated by Fitch’s Investors Service |
| | ^ | | When-issued security or extended settlement — see footnote 1(D) |
| | ** | | Security is segregated — see footnote 1(D) |
| (a) | | Cost for federal income tax purposes is $11,839,694 and net unrealized appreciation of investments is as follows: |
| | | | | | |
| | Unrealized appreciation | | $ | 967,543 | |
| | Unrealized depreciation | | | (6,447 | ) |
| | | | | | |
| | Net unrealized appreciation | | $ | 961,096 | |
| | | | | | |
Other Information
The following is a summary of the inputs used, as of June 30, 2020, involving the Fund’s investments in securities carried at fair value. The inputs or methodology used for valuing securities may not be an indication of the risk associated with investing in those securities. For more information on valuation inputs, and their aggregation into the levels used in the table below, please refer to the Security Valuation section in the accompanying Notes to Financial Statements.
| | | | | | |
| | | Valuation Inputs | | Taxable Municipal Bonds | |
Level 1 | | Quoted Prices | | $ | — | |
Level 2 | | Other Significant Observable Inputs | | | 12,800,790 | |
Level 3 | | Significant Unobservable Inputs | | | — | |
| | | | | | |
| | | | $ | 12,800,790 | |
| | | | | | |
The accompanying footnotes are an integral part of the financial statements.
46
TAXABLE MUNICIPAL BOND SERIES
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2020
| | | | | | | | |
ASSETS: | | | | | | | | |
Investments in securities, at fair value (Cost: $11,798,479) | | | | | | $ | 12,800,790 | |
Cash | | | | | | | 1,137,876 | |
Interest receivable | | | | | | | 139,442 | |
| | | | | | | | |
Total assets | | | | | | | 14,078,108 | |
LIABILITIES: | | | | | | | | |
Payable for: | | | | | | | | |
Investments purchased | | | 317,010 | | | | | |
Distributions to shareholders | | | 13,498 | | | | | |
Fund shares redeemed | | | 1,553 | | | | | |
Investment advisory fee | | | 2,288 | | | | | |
Transfer agent fee | | | 1,614 | | | | | |
Registration expense | | | 7,858 | | | | | |
Professional fees | | | 3,575 | | | | | |
Custodian expense | | | 3,373 | | | | | |
Trustees fees | | | 824 | | | | | |
Accrued expenses | | | 4,158 | | | | | |
| | | | | | | | |
Total liabilities | | | | | | | 355,751 | |
| | | | | | | | |
NET ASSETS: | | | | | | | | |
Capital | | | | | | | 12,678,915 | |
Total distributable earnings | | | | | | | 1,043,442 | |
| | | | | | | | |
Net assets at value | | | | | | $ | 13,722,357 | |
| | | | | | | | |
NET ASSET VALUE, offering price and redemption price per share
(1,319,896 shares outstanding; unlimited number of shares authorized; no par value) | | | | | | $ | 10.40 | |
| | | | | | | | |
STATEMENT OF OPERATIONS
For the year ended June 30, 2020
| | | | |
Net investment income: | | | | |
Interest income | | $ | 672,729 | |
| | | | |
Expenses: | | | | |
Investment advisory fee | | | 63,192 | |
Transfer agent fee | | | 18,958 | |
Registration expense | | | 17,847 | |
Custodian expense | | | 9,201 | |
Compliance fees | | | 7,221 | |
Pricing fees | | | 4,634 | |
Professional fees | | | 3,509 | |
Trustees fees | | | 1,452 | |
Other expenses | | | 3,240 | |
| | | | |
Total expenses | | | 129,254 | |
Fees waived by Adviser (Note 2) | | | (40,312 | ) |
Custodian expense reduction | | | (330 | ) |
| | | | |
Net expenses | | | 88,612 | |
| | | | |
Net investment income | | | 584,117 | |
| | | | |
Realized and unrealized gain/(loss) on investments: | | | | |
Net realized gain | | | 123,316 | |
Net change in unrealized appreciation/(depreciation) | | | (65,148 | ) |
| | | | |
Net realized and unrealized gain on investments | | | 58,168 | |
| | | | |
Net increase in net assets resulting from operations | | $ | 642,285 | |
| | | | |
The accompanying footnotes are an integral part of the financial statements.
47
TAXABLE MUNICIPAL BOND SERIES
STATEMENT OF CHANGES IN NET ASSETS
For the years ended June 30, 2020 and 2019
| | | | | | | | |
| | | 2020 | | | 2019 | |
Operations: | | | | | | | | |
Net investment income | | $ | 584,117 | | | $ | 571,063 | |
Net realized gain/(loss) on investments | | | 123,316 | | | | (1,251 | ) |
Net change in unrealized appreciation/(depreciation) | | | (65,148 | ) | | | 195,916 | |
| | | | | | | | |
Net increase in net assets resulting from operations | | | 642,285 | | | | 765,728 | |
Total distributions (Note 6) | | | (629,639 | ) | | | (571,063 | ) |
Net Fund share transactions (Note 4) | | | 1,470,928 | | | | 1,086,952 | |
| | | | | | | | |
Total increase | | | 1,483,574 | | | | 1,281,617 | |
Net assets: | | | | | | | | |
Beginning of year | | | 12,238,783 | | | | 10,957,166 | |
| | | | | | | | |
End of year | | $ | 13,722,357 | | | $ | 12,238,783 | |
| | | | | | | | |
FINANCIAL HIGHLIGHTS
| | | | | | | | | | | | | | | | | | | | |
| Selected data for a share outstanding: | | For the years ended June 30, | |
| | | 2020 | | | 2019 | | | 2018 | | | 2017 | | | 2016 | |
Net asset value, beginning of year | | $ | 10.39 | | | $ | 10.24 | | | $ | 10.48 | | | $ | 10.98 | | | $ | 10.53 | |
| | | | | | | | | | | | | | | | | | | | |
Income from investment operations: | | | | | | | | | | | | | | | | | | | | |
Net investment income | | | 0.52 | | | | 0.51 | | | | 0.51 | | | | 0.47 | | | | 0.50 | |
Net gains/(losses) on investments | | | 0.01 | | | | 0.15 | | | | (0.24 | ) | | | (0.43 | ) | | | 0.45 | |
| | | | | | | | | | | | | | | | | | | | |
Total from investment operations | | | 0.53 | | | | 0.66 | | | | 0.27 | | | | 0.04 | | | | 0.95 | |
Less distributions: | | | | | | | | | | | | | | | | | | | | |
Distributions from net investment income | | | (0.52 | ) | | | (0.51 | ) | | | (0.51 | ) | | | (0.47 | ) | | | (0.50 | ) |
Distributions from capital gains | | | 0.00 | | | | 0.00 | | | | 0.00 | | | | (0.07 | ) | | | 0.00 | |
| | | | | | | | | | | | | | | | | | | | |
Total distributions | | | (0.52 | ) | | | (0.51 | ) | | | (0.51 | ) | | | (0.54 | ) | | | (0.50 | ) |
| | | | | | | | | | | | | | | | | | | | |
Net asset value, end of year | | $ | 10.40 | | | $ | 10.39 | | | $ | 10.24 | | | $ | 10.48 | | | $ | 10.98 | |
| | | | | | | | | | | | | | | | | | | | |
Total return | | | 5.20% | | | | 6.64% | | | | 2.66% | | | | 0.78% | | | | 9.29% | |
Net assets, end of year (in thousands) | | $ | 13,722 | | | $ | 12,239 | | | $ | 10,957 | | | $ | 11,037 | | | $ | 12,180 | |
Ratio of net expenses to average net assets (a) | | | 0.70% | | | | 0.70% | | | | 0.70% | | | | 0.62% | | | | 0.86% | |
Ratio of gross expenses to average net assets | | | 1.02% | | | | 1.00% | | | | 0.92% | | | | 0.74% | | | | 0.86% | |
Ratio of net investment income to average net assets | | | 4.62% | | | | 4.99% | | | | 4.95% | | | | 4.79% | | | | 4.71% | |
Portfolio turnover | | | 16.28% | | | | 3.58% | | | | 4.31% | | | | 11.04% | | | | 10.55% | |
| (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. |
The accompanying footnotes are an integral part of the financial statements.
48
DUPREE MUTUAL FUNDS
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2020
| 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 (“U.S. GAAP”). The Trust operates as an investment company, as defined in Financial Accounting Standards Board (“FASB”) Accounting Standards Update 2013-08, and accordingly follows the investment company accounting and reporting guidance of Accounting Standards Codification (“ASC”) Topic 946 Financial Services – Investment Companies.
Securities held by the Intermediate Government Bond Series are valued using market quotations as provided by an independent pricing service. Securities held by the nine municipal bond 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 (the “Board”). These procedures involve the use of matrix pricing models which take 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. The Board has adopted policies and procedures for the valuation of the Trust’s investments (the “Valuation Procedures”). Pursuant to the Valuation Procedures, the Valuation Committee, consisting of all of the Trustees, has the day-to-day responsibility for implementing the Valuation Procedure including, under most circumstances, the responsibility for determining the fair value of the Trust’s securities or other assets. The Valuation Committee convenes as needed and reviews the valuation of all assets which have been fair valued for reasonableness. Shares of open-end mutual funds in which the Funds invest, if any, are valued at their respective net asset values as reported by the underlying funds.
The Funds have adopted the provisions of FASB 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
49
DUPREE MUTUAL FUNDS
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2020
| 1. | | Organization and Significant Accounting Policies, continued |
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 as follows:
| | |
| Level 1: | | Unadjusted quoted prices in active markets for identical securities. |
| Level 2: | | Prices determined using other significant observable inputs. Observable inputs, either directly or indirectly, are inputs that other market participants may use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk and others. |
| Level 3: | | Price determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable or deemed less relevant (for example, where there is little or no market activity for an investment at the end of the period), unobservable inputs may be used. Unobservable inputs reflect the Funds’ own assumptions about the factors market participants would use in pricing a security, and would be based on the best information available. |
The aggregate value by input level, as of June 30, 2020, for the Funds’ investments is included at the end of the Funds’ Schedules of Portfolio Investments.
| | B. | Investment Transactions |
Security transactions are accounted for on a trade date basis. Realized gains and losses on securities sold are determined on an identified cost basis.
Interest income, which includes the amortization of premiums and the accretion of discounts, is recorded on an accrual basis. Discounts or premiums on debt securities purchased are accreted or amortized to interest income over the lives of the respective securities using the effective interest method.
| | D. | When-Issued and Extended Settlement Securities |
The Funds may purchase securities with delivery or payment to occur at a later date. At the time the Funds enter into a commitment to purchase a security, the transaction is recorded and the value of the security is reflected in the net asset value. The value of the security may vary with market fluctuations. No interest accrues to the Funds until the security is delivered and payment takes place. At the time the Funds enter this type of transaction, they are required to segregate cash or other liquid assets equal to the value of the securities purchased. Losses may occur on these transactions due to changes in market conditions or the failure of counterparties to perform under the contract.
It is each Fund’s policy to qualify as a regulated investment company by complying with the requirements of the Internal Revenue Code (the “code”) applicable to regulated investment companies, including the distribution of all or substantially all taxable and tax-exempt income to their shareholders. The Funds have met the requirements of the code applicable to regulated investment companies for the year ended June 30, 2020. Therefore, no federal income tax provision is required. Management has analyzed the Funds’ tax positions for all open tax years and all major jurisdictions, and has concluded that as of June 30, 2020, no provision for income taxes is required in the financial statements. Therefore, no additional tax expense, including any interest and penalties, was recorded in the current year and no adjustments were made to prior periods. To the extent the Funds recognize interest and penalties, they are included in interest expense and other expenses, respectively, in the Statements of Operations. Open tax years are those that are open for examination by taxing authorities (i.e., generally the last three tax year ends and the interim tax period since then).
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. Any net realized long term capital gains are distributed annually to shareholders. Distributions are payable in cash or in additional shares at the net asset value on the payable date. Distributions are determined in accordance with income tax regulations, which may differ from U.S. GAAP.
50
DUPREE MUTUAL FUNDS
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2020
| 1. | | Organization and Significant Accounting Policies, continued |
Distributions are payable:
| | |
| Monthly for: | | Kentucky Tax-Free Short-to-Medium Series North Carolina Tax-Free Short-to-Medium Series Tennessee Tax-Free Short-to-Medium Series Intermediate Government Bond Series Taxable Municipal Bond Series |
| |
| Quarterly for: | | Alabama Tax-Free Income Series Kentucky Tax-Free Income Series Mississippi Tax-Free Income Series North Carolina Tax-Free Income Series Tennessee Tax-Free Income Series |
The preparation of these financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts and disclosures. Actual amounts could differ from those estimates.
Subsequent events occurring after June 30, 2020 have been evaluated by the Funds’ adviser for potential impact to this report through the date the financial statements were issued. The Funds’ adviser has determined that there were no material subsequent events that require recognition or disclosure in 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, the Funds (except the Intermediate Government Bond Series) 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 % of the average daily net assets between $500,000,001 and $750,000,000; and .30 of 1% of the average daily net assets between $750,000,001 and $1,000,000,000; and .25 of 1% of the average daily net assets in excess of $1,000,000,000. The Intermediate Government Bond Series 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 year ended June 30, 2020, fees voluntarily waived by the Adviser were as follows:
| | | | |
| | | Fees waived by Adviser | |
Alabama Tax-Free Income Series | | $ | 29,696 | |
Kentucky Tax-Free Short-to-Medium Series | | | 41,707 | |
Mississippi Tax-Free Income Series | | | 31,217 | |
North Carolina Tax-Free Income Series | | | 1,040 | |
North Carolina Tax-Free Short-to-Medium Series | | | 36,534 | |
Tennessee Tax-Free Income Series | | | 8,041 | |
Tennessee Tax-Free Short-to-Medium Series | | | 30,381 | |
Intermediate Government Bond Series | | | 210 | |
Taxable Municipal Bond Series | | | 40,312 | |
51
DUPREE MUTUAL FUNDS
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2020
| 2. | | Investment Advisory Fee and Other Transactions with Affiliates, continued |
In addition, each Fund has entered into a Shareholder Service Agreement with Dupree & Company, Inc., the Funds’ transfer agent. The agreement provides for a fee computed on the average daily net asset value at the annual rate of 0.15% of 1% on the first $20,000,000 of average net assets and 0.12% of 1% of all amounts in excess of $20,000,000 of average net assets for each Fund.
For the year ended June 30, 2020, each member of the Board of Trustees received a fee of $28,000 per year plus $2,000 for each Audit Committee meeting attended. In addition, all Trustees are reimbursed by the Funds for all reasonable out-of-pocket expenses incurred by them in performing their duties. The fees are allocated on an average monthly net asset basis for each Fund. The Trustees fees for each Fund are disclosed on the Funds’ Statements of Operations.
| 3. | | Purchases and Sales of Securities |
During the year ended June 30, 2020, 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 Fund were as follows:
| | | | | | | | |
| | | Purchases | | | Sales/Calls | |
Alabama Tax-Free Income Series | | $ | 2,205,281 | | | $ | 1,815,682 | |
Kentucky Tax-Free Income Series | | | 43,947,699 | | | | 77,734,550 | |
Kentucky Tax-Free Short-to-Medium Series | | | 1,388,764 | | | | 9,563,319 | |
Mississippi Tax-Free Income Series | | | 1,106,142 | | | | 1,696,683 | |
North Carolina Tax-Free Income Series | | | 26,917,451 | | | | 15,103,262 | |
North Carolina Tax-Free Short-to-Medium Series | | | 1,648,307 | | | | 8,192,795 | |
Tennessee Tax-Free Income Series | | | 3,440,189 | | | | 13,317,230 | |
Tennessee Tax-Free Short-to-Medium Series | | | 308,495 | | | | 1,056,254 | |
Intermediate Government Bond Series | | | 1,041,840 | | | | 768,273 | |
Taxable Municipal Bond Series | | | 2,944,626 | | | | 1,998,245 | |
As of June 30, 2020 and June 30, 2019, there were an unlimited number of shares of beneficial interest authorized. Transactions in capital shares were as follows:
| | | | | | | | | | | | | | | | |
| ALABAMA TAX-FREE INCOME SERIES | | Year Ended June 30, 2020 | | | Year Ended June 30, 2019 | |
| | | SHARES | | | AMOUNT | | | SHARES | | | AMOUNT | |
Shares sold | | | 246,080 | | | $ | 3,104,504 | | | | 198,144 | | | $ | 2,392,626 | |
Shares reinvested | | | 22,101 | | | | 278,564 | | | | 26,432 | | | | 321,298 | |
Shares redeemed | | | (231,029 | ) | | | (2,881,885 | ) | | | (211,547 | ) | | | (2,549,323 | ) |
Net increase | | | 37,152 | | | $ | 501,183 | | | | 13,029 | | | $ | 164,601 | |
| | | | | | | | | | | | | | | | |
| KENTUCKY TAX-FREE INCOME SERIES | | Year Ended June 30, 2020 | | | Year Ended June 30, 2019 | |
| | | SHARES | | | AMOUNT | | | SHARES | | | AMOUNT | |
Shares sold | | | 13,023,200 | | | $ | 102,778,654 | | | | 9,626,237 | | | $ | 73,522,264 | |
Shares reinvested | | | 1,823,759 | | | | 14,358,125 | | | | 2,147,924 | | | | 16,452,862 | |
Shares redeemed | | | (14,690,719 | ) | | | (115,272,687 | ) | | | (13,513,478 | ) | | | (102,515,632 | ) |
Net increase/(decrease) | | | 156,240 | | | $ | 1,864,092 | | | | (1,739,317 | ) | | $ | (12,540,506 | ) |
| | | | | | | | | | | | | | | | |
52
DUPREE MUTUAL FUNDS
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2020
| 4. | | Capital Shares, continued |
| | | | | | | | | | | | | | | | |
KENTUCKY TAX-FREE SHORT-TO-MEDIUM SERIES | | Year Ended June 30, 2020 | | | Year Ended June 30, 2019 | |
| | | SHARES | | | AMOUNT | | | SHARES | | | AMOUNT | |
Shares sold | | | 1,286,611 | | | $ | 6,918,260 | | | | 1,250,168 | | | $ | 6,540,916 | |
Shares reinvested | | | 89,454 | | | | 482,014 | | | | 119,398 | | | | 626,810 | |
Shares redeemed | | | (2,964,910 | ) | | | (15,976,039 | ) | | | (3,037,015 | ) | | | (15,891,437 | ) |
Net decrease | | | (1,588,845 | ) | | $ | (8,575,765 | ) | | | (1,667,449 | ) | | $ | (8,723,711 | ) |
| | | | | | | | | | | | | | | | |
| MISSISSIPPI TAX-FREE INCOME SERIES | | Year Ended June 30, 2020 | | | Year Ended June 30, 2019 | |
| | | SHARES | | | AMOUNT | | | SHARES | | | AMOUNT | |
Shares sold | | | 106,403 | | | $ | 1,308,777 | | | | 42,708 | | | $ | 508,317 | |
Shares reinvested | | | 8,169 | | | | 100,197 | | | | 9,135 | | | | 109,491 | |
Shares redeemed | | | (143,944 | ) | | | (1,741,993 | ) | | | (98,379 | ) | | | (1,173,590 | ) |
Net decrease | | | (29,372 | ) | | $ | (333,019 | ) | | | (46,536 | ) | | $ | (555,782 | ) |
| | | | | | | | | | | | | | | | |
NORTH CAROLINA TAX-FREE INCOME SERIES | | Year Ended June 30, 2020 | | | Year Ended June 30, 2019 | |
| | | SHARES | | | AMOUNT | | | SHARES | | | AMOUNT | |
Shares sold | | | 2,544,879 | | | $ | 30,018,744 | | | | 2,306,009 | | | $ | 26,223,159 | |
Shares reinvested | | | 175,039 | | | | 2,066,064 | | | | 179,406 | | | | 2,052,481 | |
Shares redeemed | | | (1,697,222 | ) | | | (19,982,635 | ) | | | (1,541,976 | ) | | | (17,431,321 | ) |
Net increase | | | 1,022,696 | | | $ | 12,102,173 | | | | 943,439 | | | $ | 10,844,319 | |
| | | | | | | | | | | | | | | | |
NORTH CAROLINA TAX-FREE SHORT-TO-MEDIUM SERIES | | Year Ended June 30, 2020 | | | Year Ended June 30, 2019 | |
| | | SHARES | | | AMOUNT | | | SHARES | | | AMOUNT | |
Shares sold | | | 279,136 | | | $ | 3,113,820 | | | | 371,253 | | | $ | 3,968,085 | |
Shares reinvested | | | 18,316 | | | | 203,660 | | | | 22,220 | | | | 239,095 | |
Shares redeemed | | | (908,354 | ) | | | (10,075,145 | ) | | | (716,299 | ) | | | (7,661,469 | ) |
Net decrease | | | (610,902 | ) | | $ | (6,757,665 | ) | | | (322,826 | ) | | $ | (3,454,289 | ) |
| | | | | | | | | | | | | | | | |
| TENNESSEE TAX-FREE INCOME SERIES | | Year Ended June 30, 2020 | | | Year Ended June 30, 2019 | |
| | | SHARES | | | AMOUNT | | | SHARES | | | AMOUNT | |
Shares sold | | | 481,990 | | | $ | 5,602,354 | | | | 700,809 | | | $ | 7,887,110 | |
Shares reinvested | | | 130,095 | | | | 1,507,977 | | | | 153,456 | | | | 1,734,873 | |
Shares redeemed | | | (1,455,917 | ) | | | (16,861,850 | ) | | | (1,420,050 | ) | | | (15,922,234 | ) |
Net decrease | | | (843,832 | ) | | $ | (9,751,519 | ) | | | (565,785 | ) | | $ | (6,300,251 | ) |
| | | | | | | | | | | | | | | | |
TENNESSEE TAX-FREE SHORT-TO-MEDIUM SERIES | | Year Ended June 30, 2020 | | | Year Ended June 30, 2019 | |
| | | SHARES | | | AMOUNT | | | SHARES | | | AMOUNT | |
Shares sold | | | 28,717 | | | $ | 313,936 | | | | 28,273 | | | $ | 300,410 | |
Shares reinvested | | | 7,600 | | | | 82,906 | | | | 9,019 | | | | 95,560 | |
Shares redeemed | | | (106,624 | ) | | | (1,160,346 | ) | | | (318,609 | ) | | | (3,361,462 | ) |
Net decrease | | | (70,307 | ) | | $ | (763,504 | ) | | | (281,317 | ) | | $ | (2,965,492 | ) |
53
DUPREE MUTUAL FUNDS
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2020
| 4. | | Capital Shares, continued |
| | | | | | | | | | | | | | | | |
| INTERMEDIATE GOVERNMENT BOND SERIES | | Year Ended June 30, 2020 | | | Year Ended June 30, 2019 | |
| | | SHARES | | | AMOUNT | | | SHARES | | | AMOUNT | |
Shares sold | | | 106,461 | | | $ | 1,087,209 | | | | 71,594 | | | $ | 708,045 | |
Shares reinvested | | | 28,982 | | | | 296,444 | | | | 30,032 | | | | 297,623 | |
Shares redeemed | | | (118,712 | ) | | | (1,211,567 | ) | | | (129,280 | ) | | | (1,277,711 | ) |
Net increase/(decrease) | | | 16,731 | | | $ | 172,086 | | | | (27,654 | ) | | $ | (272,043 | ) |
| | | | | | | | | | | | | | | | |
| TAXABLE MUNICIPAL BOND SERIES | | Year Ended June 30, 2020 | | | Year Ended June 30, 2019 | |
| | | SHARES | | | AMOUNT | | | SHARES | | | AMOUNT | |
Shares sold | | | 149,035 | | | $ | 1,543,704 | | | | 204,809 | | | $ | 2,075,065 | |
Shares reinvested | | | 41,121 | | | | 427,824 | | | | 38,811 | | | | 394,767 | |
Shares redeemed | | | (47,990 | ) | | | (500,600 | ) | | | (136,412 | ) | | | (1,382,880 | ) |
Net increase | | | 142,166 | | | $ | 1,470,928 | | | | 107,208 | | | $ | 1,086,952 | |
| | | Concentration of Credit Risk |
The Alabama Tax-Free Income Series, Kentucky Tax-Free Income Series, Kentucky Tax-Free Short-to-Medium Series, Mississippi Tax-Free Income Series, North Carolina Tax-Free Income Series, North Carolina Tax-Free Short-to-Medium Series, Tennessee Tax-Free Income Series, and Tennessee Tax-Free Short-to-Medium Series each invest solely in debt obligations issued by the states of Alabama, Kentucky, Mississippi, North Carolina, and Tennessee, respectively, and their respective political subdivisions, agencies and public authorities to obtain funds for various public purposes. Each of these state-specific Funds is more susceptible to economic and political factors adversely affecting issuers of their states’ respective municipal securities than a fund that is not concentrated in these issuers to the same extent.
| | | State-Specific Concentration Risk |
Investment in a state-specific Fund may involve greater risk than an investment in a fund with a portfolio comprised of municipal securities issued by more than one state. This additional risk is due to the possibility of an economic, regulatory or political development unique to a single state or region that may adversely affect the performance of the Fund. Since the state-specific Fund invest in state-specific municipal securities, economic, regulatory and political events in such states are likely to directly affect the state-specific Fund’s investments and its performance.
| | | Municipal Securities Risk |
Many municipal securities are issued to finance similar projects (such as those relating to education, health care, housing, transportation, and utilities). As a result, conditions in those sectors may affect the overall municipal securities market. In addition, changes in the financial condition of an individual municipal issuer can affect the overall municipal market. Municipal securities backed by current or anticipated revenues from a specific project or specific assets can be negatively affected by the discontinuance of the supporting taxation or the inability to collect revenues for the specific project or specific assets. Municipal securities may be less liquid than taxable bonds and there may be less publicly available information on the financial condition of municipal securities issuers than for issuers of other securities, and the investment performance of a Fund investing in municipal securities may therefore be more dependent on the analytical abilities of the Adviser than if a Fund held other types of investments such as stocks or taxable bonds. The secondary market for municipal securities also tends to be less well developed or liquid than many other securities markets, a by-product of lower capital commitments to the asset class by the dealer community, which may adversely affect a Fund’s ability to sell municipal securities it holds at attractive prices or value municipal securities. A Fund may also invest in municipal lease obligations which differ from other municipal securities because the lease payments are subject to annual legislative appropriation. If the money is not appropriated, the lease can be cancelled without penalty and investors who own the lease obligations may not be paid.
54
DUPREE MUTUAL FUNDS
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2020
| 5. | | Principal Risks, continued |
The market values of municipal securities held by a Fund may go up or down, sometimes rapidly or unpredictably, as a result of market activity, interest rate fluctuations or as a result of supply and demand factors. Accordingly, the net asset value (NAV) of our shares will fluctuate. When there are more buyers than sellers, prices tend to rise. Conversely, when there are more sellers than buyers, prices tend to fall. Municipal securities may be issued on a when-issued or delayed basis, where payment and delivery take place at a future date. Since the market price of the security may fluctuate during the time before payment and delivery, the Fund assumes the risk that the value of the security at delivery may be more or less than the purchase price.
The Funds’ investments in municipal securities rely on the opinion of the issuer’s bond counsel that the interest paid on those securities will not be subject to federal income tax. Tax opinions are generally provided at the time the municipal security is initially issued. However, after a Fund buys a security, the Internal Revenue Service may determine that the issuer has not complied with applicable tax requirements and a bond issued as tax-exempt should in fact be taxable. This may result in a significant decline in the value of the security.
Non-Diversification Risk (Kentucky Tax-Free Short-to-Medium Series, Mississippi Tax-Free Income Series, Tennessee Tax-Free Short-to-Medium Series and Taxable Municipal Bond Series, only)
Since these Funds are non-diversified, they may invest a greater percentage of its assets in a particular issuer or group of issuers than a diversified fund would. This increased investment in fewer issuers may result in increased volatility in the Funds’ performance and share price.
| | | Risks Associated with Health Crises |
An outbreak of respiratory disease caused by a novel coronavirus (COVID-19) was first detected in China in December 2019 and subsequently spread internationally. As of the date of issuance of these financial statements, COVID-19 has resulted in closing borders, enhanced health screenings, quarantines, cancellations, disruptions to supply chains and customer activity, as well as general concern and uncertainty. The impact of COVID-19 may be short term or may last for an extended period of time and result in a substantial economic downturn. The impact of this outbreak, and other epidemics and pandemics that may arise in the future, could negatively affect the worldwide economy, as well as the economies of individual countries, individual companies and market in general in significant and unforeseen ways. Any such impact could adversely affect a Fund’s performance, the performance of the securities in which a Fund invests and may lead to losses on an investment in a Fund.
At June 30, 2020, the Funds’ capital loss carry-forwards available to offset future capital gains, as follows:
| | | | | | | | | | | | |
| | | Short-term | | | Long-term | | | Total | |
Alabama Tax Free Income Series | | $ | 35,043 | | | $ | 36,362 | | | $ | 71,405 | |
Kentucky Tax-Free Short-to-Medium Series | | | 114,186 | | | | | | | | 114,186 | |
North Carolina Tax-Free Income Series | | | 1,216,937 | | | | 365,211 | | | | 1,582,148 | |
Tennessee Tax-Free Income Series | | | 288,388 | | | | 17,178 | | | | 305,566 | |
Tennessee Tax-Free Short-to-Medium Series | | | — | | | | 269,581 | | | | 269,581 | |
Intermediate Government Bond Series | | | 120,261 | | | | 20,861 | | | | 141,122 | |
During the year ended June 30, 2020, the following Funds utilized capital loss carry-forwards as follows:
| | | | |
Alabama Tax Free Income Series | | $ | 18,246 | |
Kentucky Tax-Free Income Series | | | 205,343 | |
Kentucky Tax-Free Short-to-Medium Series | | | 146,952 | |
North Carolina Tax-Free Income Series | | | 172,080 | |
North Carolina Tax-Free Short-to-Medium Series | | | 149,538 | |
Tennessee Tax-Free Income Series | | | 122,701 | |
Tennessee Tax-Free Short-to-Medium Series | | | 1,796 | |
Intermediate Government Bond Series | | | 11,595 | |
Taxable Municipal Bond Series | | | 36,663 | |
55
DUPREE MUTUAL FUNDS
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2020
| 6. | | Federal Income Taxes, continued |
The distributions from net realized gains are determined in accordance with federal income tax regulations, which may differ from GAAP. These differences are caused primarily due to the recognition of certain components of realized capital gains for federal income tax purposes. Where such differences are permanent in nature, they are reclassified in the components of net assets based on their ultimate characterization for federal income tax purposes. Any such reclassifications will have no effect on net assets, results of operations or net asset values per share of the Funds. For the fiscal year ended June 30, 2020, the Funds did not have any reclassification of net assets.
The tax character of distributions paid for the years ended June 30, 2020 and 2019 were as follows:
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | 2020 | | | 2019 | |
| | | Tax
Exempt
Income | | | Ordinary
Income | | | Long-Term
Capital
Gain | | | Tax
Exempt
Income | | | Ordinary
Income | | | Long-Term
Capital
Gain | |
Alabama Tax-Free Income Series | | $ | 680,102 | | | $ | — | | | $ | — | | | $ | 707,873 | | | $ | — | | | $ | — | |
Kentucky Tax-Free Income Series | | | 25,818,863 | | | | — | | | | — | | | | 27,074,827 | | | | — | | | | 1,608,795 | |
Kentucky Tax-Free
Short-to-Medium Series | | | 865,554 | | | | — | | | | — | | | | 1,071,104 | | | | — | | | | — | |
Mississippi Tax-Free Income Series | | | 275,568 | | | | — | | | | 14,209 | | | | 306,967 | | | | — | | | | 271 | |
North Carolina Tax-Free Income Series | | | 3,527,438 | | | | — | | | | — | | | | 3,413,609 | | | | — | | | | — | |
North Carolina Tax-Free
Short-to-Medium Series | | | 274,467 | | | | — | | | | — | | | | 322,451 | | | | — | | | | — | |
Tennessee Tax-Free Income Series | | | 2,425,813 | | | | — | | | | — | | | | 2,711,761 | | | | — | | | | — | |
Tennessee Tax-Free
Short-to-Medium Series | | | 111,556 | | | | — | | | | — | | | | 129,383 | | | | — | | | | — | |
Intermediate Government Bond Series | | | — | | | | 360,002 | | | | — | | | | — | | | | 372,107 | | | | — | |
Taxable Municipal Bond Series | | | — | | | | 629,639 | | | | — | | | | — | | | | 571,063 | | | | — | |
At June 30, 2020, the Funds’ 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 on
Investments | |
Alabama Tax-Free Income | | $ | — | | | $ | 99,242 | | | $ | — | | | $ | 1,899,070 | |
Kentucky Tax-Free Income | | | — | | | | 2,724,275 | | | | 155,511 | | | | 49,215,510 | |
Kentucky Tax-Free Short-to-Medium | | | — | | | | 29,896 | | | | — | | | | 1,942,250 | |
Mississippi Tax-Free Income | | | — | | | | 41,175 | | | | 21,206 | | | | 702,078 | |
North Carolina Tax-Free Income | | | — | | | | 353,793 | | | | — | | | | 9,485,809 | |
North Carolina Tax-Free Short-to-Medium | | | 1,510 | | | | 4,351 | | | | — | | | | 735,649 | |
Tennessee Tax-Free Income | | | — | | | | 210,181 | | | | — | | | | 5,786,226 | |
Tennessee Tax-Free Short-to-Medium | | | — | | | | 2,129 | | | | — | | | | 358,145 | |
Intermediate Government Bond | | | 4,407 | | | | — | | | | — | | | | 994,013 | |
Taxable Municipal Bond Series | | | 13,498 | | | | — | | | | 82,346 | | | | 961,096 | |
56
DUPREE MUTUAL FUNDS
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2020
| 6. | | Federal Income Taxes, continued |
| | | | | | | | | | | | |
| | | Accumulated
Capital and
Other Losses | | | Other
Temporary
Differences | | | Total
Accumulated Earnings/(Losses) | |
Alabama Tax-Free Income | | $ | (71,404 | ) | | $ | (99,242 | ) | | $ | 1,827,666 | |
Kentucky Tax-Free Income | | | -0- | | | | (2,724,275 | ) | | | 49,371,021 | |
Kentucky Tax-Free Short-to-Medium | | | (114,186 | ) | | | (29,896 | ) | | | 1,828,064 | |
Mississippi Tax-Free Income | | | -0- | | | | (41,110 | ) | | | 723,349 | |
North Carolina Tax-Free Income | | | (1,582,148 | ) | | | (353,793 | ) | | | 7,903,661 | |
North Carolina Tax-Free Short-to-Medium | | | -0- | | | | (4,351 | ) | | | 737,159 | |
Tennessee Tax-Free Income | | | (305,565 | ) | | | (210,181 | ) | | | 5,480,661 | |
Tennessee Tax-Free Short-to-Medium | | | (269,581 | ) | | | (2,129 | ) | | | 88,564 | |
Intermediate Government Bond | | | (141,122 | ) | | | (4,407 | ) | | | 852,891 | |
Taxable Municipal Bond Series | | | -0- | | | | (13,498 | ) | | | 1,043,442 | |
| 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 a committed line of credit. The principal amounts borrowed are due on demand. The agreement expires on August 31, 2020, 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 June 30, 2020, the Funds had an aggregate unused line of credit amount of $25,000,000. During the year ended June 30, 2020, the average interest rate on borrowings was 4.06% and the daily weighted average borrowings for each Fund with borrowings were as follows:
| | | | |
| | | Weighted
Average
Borrowings | |
Alabama Tax-Free Income Series | | $ | 4,921 | |
Kentucky Tax Free Income Series | | | 31,899 | |
Kentucky Tax-Free Short-to-Medium Series | | | 8,033 | |
Mississippi Tax-Free Income Series | | | 1,331 | |
North Carolina Tax-Free Income Series | | | 34,358 | |
North Carolina Tax-Free Short-to-Medium Series | | | 4,721 | |
Tennessee Tax-Free Income Series | | | 32,762 | |
Tennessee Short-to-Medium Tax-Free Series | | | 1,710 | |
Intermediate Government Bond Series | | | 4,005 | |
Taxable Municipal Bond Series | | | 257 | |
The Funds have a contractual agreement with the custodian whereby the Funds compensate the custodian for custodial services incurred exceeding the credits realized as a result of uninvested cash balances. Credits realized as a result of uninvested cash balances are used to reduce each Fund’s expenses. During the year, these credits reduced each Fund’s expenses by the amount shown on the Statement of Operations as “Custodian expense reduction.”
57
Report of Independent Registered Public Accounting Firm
To the Shareholders and the Board of Trustees of
Dupree Mutual Funds
Opinion on the Financial Statements
We have audited the accompanying statements of assets and liabilities of Dupree Mutual Funds (the “Trust”) (comprising 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, Tennessee Tax-Free Short-to-Medium Series, Intermediate Government Bond Series, and Taxable Municipal Bond Series) (collectively referred to as the “Funds”)), including the schedules of portfolio investments, as of June 30, 2020, and the related statements of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, the financial highlights for each of the five years in the period then ended and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of each of the Funds comprising Dupree Mutual Funds at June 30, 2020, the results of their operations for the year then ended, the changes in their net assets for each of the two years in the period then ended and their financial highlights for each of the five years in the period then ended, in conformity with U.S. generally accepted accounting principles.
Basis for Opinion
These financial statements are the responsibility of the Trust’s management. Our responsibility is to express an opinion on each of the Funds’ financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Trust in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Trust is not required to have, nor were we engaged to perform, an audit of the Trust’s internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Trust’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of June 30, 2020, by correspondence with the custodian and brokers. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
We have served as the auditor of one or more Dupree Mutual Funds investment companies since 1997.
Cincinnati, Ohio
August 26, 2020
58
DUPREE MUTUAL FUNDS
OTHER UNAUDITED INFORMATION
June 30, 2020
Trustee and officer information
The following table sets forth information as to the Trustees and officers:
| | | | | | | | | | |
| Name, Address and Age | | Position(s) held
with Funds | | Term of Office and
Length of Time Served | | Principal Occupation(s)
During Past 5 Years | | Number of
Portfolios in
Fund Complex
Overseen by
Trustee | | Other
Directorships
Held in Publicly
Traded Companies |
| Interested Trustee and Officers: | | | | | | | | | | |
Allen E. Grimes, III(1) 125 South Mill Street Lexington, KY 40507 Age: 57 | | Trustee, President | | Annual Term; 14 years of service as Executive Vice President, 2 years as President | | President, Dupree & Company, Inc. | | 10 | | N/A |
Michelle M. Dragoo 125 South Mill Street Lexington, KY 40507 Age: 59 | | Vice President, Secretary, Treasurer | | Annual Term; 22 years of service as Vice President, 20 years of service as Secretary, Treasurer | | Vice President, Secretary, Treasurer of Dupree & Company, Inc. | | N/A | | N/A |
Huston B. Combs 125 South Mill Street Lexington, KY 40507 Age: 43 | | Vice President | | Annual Term; 2 years of service | | Dupree & Company, Inc. (2017 to present); Gess Mattingly & Atchison, P.S.C. (law firm) (2003-2017) | | N/A | | N/A |
Vincent H. Harrison 125 South Mill Street Lexington, KY 40507 Age: 49 | | Assistant Secretary, Assistant Treasurer | | Annual Term; 5 years of service | | Vice President Dupree & Company, Inc. | | N/A | | N/A |
Martin Dean Ultimus Fund Solutions 225 Pictoria Drive Suite 450 Cincinnati, OH 45246 Age: 56 | | Compliance Officer | | Annual Term; 3 years of service | | Vice President, Director of Fund Compliance Ultimus Fund Solutions, LLC (January 2016-present); Senior Vice President, Huntington Asset Services (July 2013-December 2015) | | N/A | | N/A |
| Independent Trustees: | | | | | | | | | | |
James C. Baughman, Jr. 1999 Richmond Road Suite 2A Lexington, KY 40502 Age: 57 | | Trustee Chair, Nominating Committee | | Indefinite Term/ Since October 2007 | | President, CJN Advisors, LLC (2013 – present; business consulting); President, Blue Horse Entries, LLC (2014 to present; online business support services for equestrian events); President, H&S Parent, Inc. (2017 to present; health and wellness) | | 10 | | Advisory Board, Community Trust Bank |
Ann Rosenstein Giles 343 Waller Avenue Suite 100 Lexington, KY 40504 Age: 68 | | Trustee Chair, Valuation Committee | | Indefinite Term/ Since October 2011 | | AJ Marketing Partners (self-employed marketing consultant) | | 10 | | N/A |
Marc A. Mathews 500 S. Mill Street Lexington, KY 40508 Age: 62 | | Trustee Chairman Chair, Audit Committee | | Indefinite Term/ Since October 2011 | | Vice President for Finance and Business, Transylvania University | | 10 | | Director, Bank of the Bluegrass |
Knox van Nagell Pfister 125 South Mill Street Lexington, KY 40507 Age: 42 | | Trustee | | Indefinite Term Since August 2019 | | General Counsel Mt. Brilliant Farm and Boone Creek LLC (2017 – present); Sr. Director of Philanthropy UK Health Care (2016-2017); Executive Director, Fayette Alliance (2006-2016) | | 10 | | N/A |
| (1) | | Allen E. Grimes, III is considered to be an “interested person” as defined in section 2(a)(19) of the Investment Company Act of 1940 by virtue of his affiliation with the Adviser. |
59
DUPREE MUTUAL FUNDS
OTHER UNAUDITED INFORMATION
June 30, 2020
Trustee and officer information, continued
Effective June 8, 2020, William A. Combs, Jr. was no longer a Trustee.
As of June 30, 2020, none of the Independent Trustees or 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 and information regarding how the Funds voted those proxies during the most recent twelve months ended June 30, 2020, 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 ended June 30, 2020, 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 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-PORT. The information will be publicly available 60 days after the end of the period. The complete listing of each Fund’s portfolio holdings is available on the Commission’s website at http://www.sec.gov and will be made available to shareholders upon request by calling (800) 866-0614.
Liquidity Risk Management Program
The Trust has adopted and implemented a liquidity risk management program (the “Program”) as required by Rule 22e-4 under the Investment Company Act of 1940, as amended. The Trust’s Board of Trustees (the “Board”) designated certain officers of the Trust as the administrator of the Program (“Liquidity Administrator”). The Program is reasonably designed to assess and manage the liquidity risk of each Fund. Liquidity risk is the risk that each Fund could not meet requests to redeem shares issued by each Fund without significant dilution of remaining investors’ interests.
Liquidity Risk Management Program, continued:
The Liquidity Administrator provided a written report to the Board for consideration at its May 2020 meeting that addressed the operation of the Program and provided an assessment of the adequacy and effectiveness of the Program during the period from the adoption of the Program on December 1, 2018 through March 31, 2020 (the “Covered Period”). The report concluded that during the Covered Period the Program operated effectively and was adequately and effectively implemented to assess and manage each Fund’s liquidity risk. The Liquidity Administrator also reported that there were no liquidity events that impacted each Fund or its ability to timely meet redemptions without dilution to existing shareholders during the Covered Period.
There can be no assurance that the Program will achieve its objectives in the future. Further information on liquidity risk, and other principal risks to which an investment in each Fund may be subject, can be found in each fund’s prospectus.
60
DUPREE MUTUAL FUNDS
OTHER UNAUDITED INFORMATION
June 30, 2020
Schedule of Shareholder Expenses
As a shareholder of the Funds, you incur ongoing costs including investment advisory fees and other Fund expenses. The following examples are intended to help you understand your ongoing costs (in dollars) of investing in the Funds and to compare these costs with the ongoing costs of investing in other mutual funds.
Actual Expenses
The first line of the table below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled “Expenses Paid During the Six Months Ended June 30, 2020” to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The second line of the table below provides information about hypothetical account values and hypothetical expenses based on each Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses which is not the Funds’ actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Funds and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds.
| | | | | | | | | | | | | | | | |
| | | Net Expense
Ratio
Annualized
June 30, 2020 | | | Beginning
Account Value
January 1, 2020* | | | Ending
Account Value
June 30, 2020** | | | Expenses Paid During
the Six Months
Ended June 30, 2020 | |
Alabama Tax-Free Income Series | | | | | | | | | | | | | | | | |
| Actual | | | .70 | % | | $ | 1,000.00 | | | $ | 1,027.30 | | | $ | 3.52 | |
| Hypothetical | | | .70 | | | | 1,000.00 | | | | 1,024.86 | | | | 3.52 | |
Kentucky Tax-Free Income Series | | | | | | | | | | | | | | | | |
| Actual | | | .56 | | | | 1,000.00 | | | | 1,015.32 | | | | 2.81 | |
| Hypothetical | | | .56 | | | | 1,000.00 | | | | 1,024.86 | | | | 2.82 | |
Kentucky Tax-Free Short-to-Medium Series | | | | | | | | | | | | | | | | |
| Actual | | | .70 | | | | 1,000.00 | | | | 1,013.23 | | | | 3.48 | |
| Hypothetical | | | .70 | | | | 1,000.00 | | | | 1,024.86 | | | | 3.50 | |
Mississippi Tax-Free Income Series | | | | | | | | | | | | | | | | |
| Actual | | | .70 | | | | 1,000.00 | | | | 1,019.94 | | | | 3.51 | |
| Hypothetical | | | .70 | | | | 1,000.00 | | | | 1,024.86 | | | | 3.52 | |
North Carolina Tax-Free Income Series | | | | | | | | | | | | | | | | |
| Actual | | | .69 | | | | 1,000.00 | | | | 1,022.28 | | | | 3.45 | |
| Hypothetical | | | .69 | | | | 1,000.00 | | | | 1,024.86 | | | | 3.46 | |
North Carolina Tax-Free Short-to-Medium Series | | | | | | | | | | | | | | | | |
| Actual | | | .70 | | | | 1,000.00 | | | | 1,016.11 | | | | 3.50 | |
| Hypothetical | | | .70 | | | | 1,000.00 | | | | 1,024.86 | | | | 3.51 | |
Tennessee Tax-Free Income Series | | | | | | | | | | | | | | | | |
| Actual | | | .70 | | | | 1,000.00 | | | | 1,018.75 | | | | 3.50 | |
| Hypothetical | | | .70 | | | | 1,000.00 | | | | 1,024.86 | | | | 3.51 | |
Tennessee Tax-Free Short-to-Medium Series | | | | | | | | | | | | | | | | |
| Actual | | | .70 | | | | 1,000.00 | | | | 1,017.35 | | | | 3.50 | |
| Hypothetical | | | .70 | | | | 1,000.00 | | | | 1,024.86 | | | | 3.52 | |
61
DUPREE MUTUAL FUNDS
OTHER UNAUDITED INFORMATION
June 30, 2020
Schedule of Shareholder Expenses, continued
| | | | | | | | | | | | | | | | |
| | | Net Expense
Ratio
Annualized
June 30, 2020 | | | Beginning
Account Value
January 1, 2020* | | | Ending
Account Value
June 30, 2020** | | | Expenses Paid During
the Six Months
Ended June 30, 2020 | |
Intermediate Government Bond Series | | | | | | | | | | | | | | | | |
| Actual | | | .68 | | | $ | 1,000.00 | | | $ | 1,024.27 | | | $ | 3.40 | |
| Hypothetical | | | .68 | | | | 1,000.00 | | | | 1,024.86 | | | | 3.40 | |
Taxable Municipal Bond Series | | | | | | | | | | | | | | | | |
| Actual | | | .70 | | | | 1,000.00 | | | | 1,025.86 | | | | 3.51 | |
| Hypothetical | | | .70 | | | | 1,000.00 | | | | 1,024.86 | | | | 3.51 | |
| * | | The example is based on an investment of $1,000 invested at the beginning of the period. |
| ** | | Expenses are equal to the Funds’ annualized expense ratio, multiplied by the average account value over the period multiplied by [182/366] (to reflect one-half year period). |
62
Item 2. Code of Ethics: The registrant has not adopted a code of ethics that applies to the principal executive officer, principal financial officer, principal accounting officer and persons performing similar functions, regardless of whether these individuals are employed by the registrant or a third party. The registrant believes that the registrant’s code of ethics established pursuant to Rule 17j-1 under the Investment Company Act of 1940 covers such officers and persons.
Item 3. Audit Committee Financial Expert: The board does not have a financial expert serving on the audit committee. The registrant’s audit committee is comprised of all Trustees all of who are non-interested and independent. The audit committee believes that the collective experience and expertise of the members in assessing the performance of companies and the evaluation of financial statements is sufficient to assess the issues which can reasonably be expected to be raised by the Trust’s financial statements.
Item 4. Principal Accountant Fees and Services:
| | | Year ended June 30, 2019: $156,600 |
| | | Year ended June 30, 2020 $161,300 |
| | | Year ended June 30, 2019: None |
| | | Year ended June 30, 2020 None |
| | (c) | Tax Fees (consisting of income and excise tax compliance services) |
| | | Year ended June 30, 2019: $43,600 |
| | | Year ended June 30, 2020 $44,900 |
| | (d) | All Other Fees (Fees for all other services) |
| | | Year ended June 30, 2019 $30,000 |
| | | (consisted of examination of transfer agent ($11,400); Anti-Money Laundering advisory services ($8,900) and Review of Semi-Annual report ($9,700)) |
| | | Year ended June 30, 2020 $30,900 |
| | | (consisted of examination of transfer agent ($11,700); Anti-Money Laundering advisory services ($9,200) and Review of Semi-Annual report ($10,000)) |
| | (e) | (1) (2) The Registrant’s Audit Committee must pre-approve all audit services and non-audit services that the principal accountant provides to the Registrant. The Audit committee must also pre-approve any engagement of the principal accountant to provide non-audit services to the Registrant’s investment adviser, or any affiliate of the adviser that provides ongoing services to the Registrant, if such non-audit services directly impact the Registrant’s operations and financial reporting. All services (b) through (d) were pre-approved by the Audit Committee. |
| | (f) | The Registrant has been advised by the Principal Accountant that no persons other than full time permanent employees have been engaged to audit the Registrant’s Financial Statements for the fiscal year ended June 30, 2020. |
| | (g) | The aggregate non audit fees billed by the Registrant’s Accountant to the Registrant were: |
| | | Year ended June 30, 2019: $73,600 |
| | | Year ended June 30, 2020: $75,800 |
| | (h) | Services were pre-approved by the Registrant’s Audit Committee. |
Item 5. Not applicable.
Item 6.
| | (a) | 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:
(a) The registrant’s principal executive officer and principal financial officer have concluded, based on their evaluation of the registrant’s disclosure controls and procedures as conducted within 90 days of the filing date of this report, that these disclosure controls and procedures are adequately designed and are operating effectively to ensure that information required to be disclosed by the registrant 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.
(b) There were no changes in the registrant’s internal control over financial reporting that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect, the registrant’s internal control over financial reporting.
Item 12. Not applicable.
Item 13. Exhibits
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| | |
| Dupree Mutual Funds |
| |
| By: | | /s/ Michelle M. Dragoo |
| | Michelle M. Dragoo, |
| | Vice President, Secretary, Treasurer |
|
| Date: August 26, 2020 |
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.
| | |
| Dupree Mutual Funds |
| |
| By: | | /s/ Allen E. Grimes, III |
| | Allen E. Grimes, III, |
| | President |
|
| Date: August 26, 2020 |
