UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number: 811-04033
Sit Mutual Funds II, Inc.
(Exact name of registrant as specified in charter)
3300 IDS Center
80 South Eighth Street
Minneapolis, MN 55402
(Address of principal executive offices)
Paul E. Rasmussen, VP Treasurer
Sit Mutual Funds, Inc.
3300 IDS Center
80 South Eighth Street
Minneapolis, MN 55402
(Name and address of agent for service)
Copy to:
Mike Radmer, Esq.
Dorsey & Whitney
Suite 1500
50 South Sixth Street
Minneapolis, MN 55402-1498
Registrant’s telephone number, including area code: (612) 332-3223
Date of fiscal year end: March 31, 2012
Date of reporting period: September 30, 2011
Item 1: Reports to Stockholders
![LOGO](https://capedge.com/proxy/N-CSRS/0001193125-11-325489/g260481g60u90.jpg)
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Sit Mutual Funds |
BOND FUNDS SEMI-ANNUAL REPORT |
TABLE OF CONTENTS |
This document must be preceded or accompanied by a Prospectus.
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CHAIRMAN’S LETTER | | |
November 7, 2011 | | |
Dear fellow shareholders:
U.S. fixed-income markets posted strong performance during the six-month period, driven by continued concerns regarding the health of the U.S. economic recovery and the flight to quality stemming from the ongoing saga of Greece and Europe’s sovereign debt problem. The debt ceiling debate and ultimate failure to achieve a solution to stabilize the deficit led to the historic downgrade of the U.S. debt rating from AAA to AA+ by Standard & Poor’s in August. The ratings downgrade gave root to a further loss of confidence and deep pessimism by consumers and domestic business leaders, which resulted in a significant uptick in volatility across the financial markets.
U.S.Treasury yields declined sharply to record lows for some maturities. The yield curve flattened significantly during the period as a result of the Federal Reserve’s announcement that it intends to keep short-term interest rates near zero until mid-2013 and that it will execute “Operation Twist,” whereby the Fed will sell shorter-maturity U.S.Treasuries and buy 10 to 30-yearTreasuries in an attempt to reduce longer-maturity Treasury yields and mortgage rates. As of period end, 2-year U.S.Treasury notes yielded less than 0.25%, while 5-year, 10-year, and 30-year maturity bonds ended the period with yields of 0.95%, 1.92%, and 2.91%, respectively. That is a decline of 133 basis points for the 5-year, 155 basis points for the 10-year, and 160 basis points for the 30-year during the six-month period.
Tax-exempt yields also fell during the six-month period, although their decline was only slightly more than half that experienced by comparable maturity Treasury securities. As with Treasuries, the tax-exempt yield curve flattened as shorter maturity yields had little room to decline further. The Bond Buyer 40-Bond Index yield decreased 79 basis points during the period to 4.92%, which compared to a beginning-of-the-period yield of 5.71%. More significantly, tax-exempt yields have now returned to levels not seen since October 2010, after which heavy supply, combined with a massive withdrawal of funds from the municipal sector due to increased credit concerns, contributed to a sharp rise in yields. The September quarter end yield level of 4.92% compares to a 12-month high of 5.95%, reached on January 18, 2011, when tax-exempt fund flows were most negative, and an historical low of 4.51% in December 2006.
Regarding the U.S. economy, real GDP growth continues to be sluggish. After growing by just 1.3% in the second quarter of 2011, the preliminary estimate of third quarter 2011 real GDP growth was 2.5%. Strong growth in consumer spending and business fixed investments were significant positive contributors to GDP during the period. Although the economy added 577,000 jobs during the six-month period, the rate of job creation has been subpar for this stage of an economic recovery as the U.S. unemployment rate stood at 9.1% as of the end of the reporting period.
Inflation, as measured by the headline Consumer Price Index for All Urban Consumers (CPI), increased 0.3% in September, following on the heels of a 0.4% rise in August. Year over year, the CPI has
accelerated from 1.1% in September 2010 to 3.9% in the latest month. The rise in September inflation was largely driven by a 0.4% increase in food, a 2.9% rise in gasoline, and a 1.1% percent decrease in apparel. Core CPI, which excludes the volatile food and energy components, increased 0.1% in September and 0.2% in August. Much of the increase in the headline figure is the result of more transitory items, as Federal Reserve Chairman Ben Bernanke has stated.
Regarding the fiscal outlook, the Congressional Budget Office (CBO) estimates that the federal deficit for fiscal year 2011 was $1.3 trillion, about the same as the deficit for fiscal year 2010. Receipts for fiscal 2011 rose 6.5% compared to fiscal 2010 due to a $194 billion increase in individual income tax receipts. Outlays for fiscal 2011 were 4.2% higher than for fiscal 2010 mainly due to a $57 billion increase in social security benefits and Medicare payments, while the 16.7% increase in interest paid on the Public Debt was essentially offset by a reduction in unemployment benefits paid. Absent the passage by Congress of a meaningful near-term deficit reduction plan, the federal budget deficit is unlikely to fall beneath $1 trillion for fiscal year 2012.
With regard to legislation, Congress, in early August, finally passed legislation to increase the debt ceiling while also creating a deficit “Super Committee” tasked with proposing a budget overhaul that addresses entitlement and tax reform. An automatic $1.2 trillion in cuts over 10 years, primarily to defense and Medicare providers, is triggered if the Super Committee proposal fails to pass Congress. After the August employment report showed no jobs were created in August, President Obama unveiled a $447 billion stimulus package, aimed at encouraging hiring by small businesses, primarily by providing one-time tax breaks for hiring long-term unemployed people and giving employees wage increases through a reduction in payroll taxes. The cost of the package is to be paid for with permanently higher tax rates for higher income earners. However, the President’s proposal is unlikely to pass both chambers of congress without significant modification. Additionally, the President expressed his desire to help “underwater” homeowners refinance their mortgages, but has not put forth a specific plan as of this writing.
The Federal Reserve’s U.S. trade-weighted major currencies dollar index increased 3.0% in September, and is higher by 0.5% for the 6-month period. The dollar rose in September, partly as U.S. financial markets benefited from a flight to quality. While this trend may continue over the near term, given the longer-term fiscal challenges the U.S. faces with regard to its trade and budget deficits, we do not expect the rally in the dollar to be sustained over the longer term.
Strategy Summary
The U.S. economy will continue to face headwinds, both internal and external, including the European sovereign debt crisis and constrained domestic consumer demand. Unfortunately, we believe that
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2 | | SIT MUTUAL FUNDS SEMI-ANNUAL REPORT |
the inability of both Congress and the President to agree on legislation that will meaningfully boost economic activity could well cause the current pessimistic outlook by consumers and business leaders to eventually become economically self- fulfilling. As a result of these issues, we have adjusted downward our estimate for annual real U.S. GDP growth in the second half of the year to 2.0%, resulting in annual real GDP growth of 1.7% for 2011.
Looking forward, the Federal Reserve’s Operation Twist is likely to result in positive price movement on long maturity Treasuries as the Federal Reserve flattens the yield curve. As a result, we expect to opportunistically purchase long maturity Treasuries when appropriate. We continue to emphasize older vintage, high-coupon, agency mortgage pass-through securities that provide high levels of income at stable price levels.
As the tax-exempt yield curve remains historically steep, we continue to believe that a longer-than-benchmark duration will be rewarded in portfolios. In addition, following the implementation of Operation Twist, relative yield comparisons of AAA-rated general obligation bonds to Treasuries, at approximately 120% or higher across the yield curve, appear very attractively valued. Credit spreads remain attractive, as A-rated tax-exempt revenue bonds currently offer more than 100 basis points additional yield over AAA-rated general obligation bonds for maturities 7 years and beyond. Our investment strategy remains focused on income, which we believe is the primary
source of return over longer periods of time. Higher issuance volume could provide attractive buying opportunities during the fourth quarter of 2011.
We believe that proposals to tax individuals on what is currently tax-exempt municipal income will gain little traction, particularly as such proposals could significantly increase borrowing costs to municipalities. We also believe that retroactive taxation on tax-exempt bonds is unlikely. The more likely concern, albeit still one with a low probability, would be limited future access to tax-exempt financing, which would thereby create a shortage of tax-exempt bonds and a resultant increase in their value. As always, diversification remains a key tenet in our strategy to help manage credit risk, particularly as state and local issuers continue to adjust to fiscal challenges.
We appreciate your continued interest in the Sit family of funds.
With best wishes,
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Roger J. Sit
Chairman and President
Sit Mutual Funds
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Sit U.S. Government Securities Fund |
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OBJECTIVE & STRATEGY
The objective of the U.S. Government Securities Fund is to provide high current income and safety of principal, which it seeks to attain by investing solely in debt obligations issued, guaranteed or insured by the U.S. government or its agencies or its instrumentalities. Agency mortgage securities and U.S. Treasury securities are the principal holdings in the Fund. The mortgage securities that the Fund purchases consist of pass-through securities including those issued by Government National Mortgage Association (GNMA), Federal National Mortgage Association (FNMA), and Federal Home Loan Mortgage Corporation (FHLMC).
The Sit U.S. Government Securities Fund provided a return of +1.94% during the six-month period ended September 30, 2011, compared to the return of the Barclays Intermediate Government Bond Index of +5.34%. The Fund’s 30-day SEC yield was 3.33% and its 12-month distribution rate was 2.97%.
During the six-month period, the Fund benefited from the income advantage for its holdings in old, higher coupon mortgage pass through securities and collateralized mortgage obligations. General economic uncertainty produced higher demand for U.S. government obligations, which are typically considered the safest investment option. The Federal Reserve announced during the third quarter of 2011 that they will sell short-term U.S. Treasury notes to buy long-term Treasury bonds (Operation Twist). Prices of longer dated U.S. Treasury bonds rose in response to this government engineered increase in demand. The Fund’s underweight in the U.S. Treasury sector, relative to the benchmark, negatively impacted the Fund’s performance.
Additionally, the Federal Reserve announced it will again purchase agency mortgage securities by reinvesting payments from their existing mortgage holdings. The Fund does not invest in mortgages that are likely to be significantly influenced by either the purchase program or an expansion of government sponsored refinancing programs. Given the seasoned nature of the mortgages in the Fund, we expect refinancing will remain relatively stable and any impact on the Fund to be modest. The Funds mortgages rose in price for the period, however, concerns regarding the expansion of refinancing programs caused them to generally underperform relative to U.S. Treasuries.
The debt ceiling debate and ultimate failure to achieve a solution to stabilize the deficit led to the historic downgrade of the U.S. debt rating from AAA to AA+. The downgrade manifested a deep pessimism and loss of confidence by domestic business leaders and consumers alike. In addition to problems domestically, Europe’s sovereign debt problems continue to weigh on a global recovery. Unfortunately, we believe that the inability of both congress and the President to successfully achieve any of their current policy agendas will likely cause peoples’ current pessimistic outlook to eventually become economically self fulfilling. Given the uncertain economic environment, we continue to focus on old, high coupon agency
HYPOTHETICAL GROWTH OF $10,000
![LOGO](https://capedge.com/proxy/N-CSRS/0001193125-11-325489/g260481g26z05.jpg)
The chart above illustrates the total value of a hypothetical $10,000 investment in the Fund over the past 10 years (or for the life of the Fund if shorter) as compared to the performance of the Barclays Capital Intermediate Government Bond Index. Past performance does not guarantee future results. Returns include the reinvestment of distributions. The chart does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
1 The Barclays Capital Intermediate Government Bond Index is a sub-index of the Barclays Capital Government Bond Index covering issues with remaining maturities of between three and five years. The Barclays Capital Government Bond Index is an index that measures the performance of all public U.S. government obligations with remaining maturities of one year or more. The returns include the reinvestment of income and do not include any transaction costs, management fees or other costs. It is not possible to invest directly in an index.
mortgage pass-through securities, as these continue to provide high levels of income at stable price levels, especially relative to the low absolute levels of shorter term interest rates available from other investment alternatives. This high level of income has been a fundamental focus of the Fund since its inception.
Michael C. Brilley
Bryce A. Doty, CFA
Senior Portfolio Managers
Mark H. Book, CFA
Portfolio Manager
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4 | | SIT MUTUAL FUNDS SEMI-ANNUAL REPORT |
COMPARATIVE RATES OF RETURNS
as of September 30, 2011
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| | Sit U.S. Government Securities Fund | | Barclays Capital Inter. Gov’t Bond Index1 | | Lipper U.S. Gov’t Fund Index2 |
Six Month | | 1.94% | | 5.34% | | n/a |
One Year | | 3.68 | | 3.72 | | 5.52% |
Five Years | | 5.74 | | 5.91 | | 6.20 |
Ten Years | | 4.52 | | 4.80 | | 5.00 |
Since Inception (6/2/87) | | 6.45 | | 6.63 | | 6.36 |
Performance figures are historical and do not guarantee future results. Investment returns and principal value will vary, and you may have a gain or loss when you sell shares. Current performance may be lower or higher than the performance data quoted. Contact the Fund for performance data current to the most recent month-end. Returns include changes in share price as well as reinvestment of all dividends and capital gains and all fee waivers. Without the fee waivers total return and yield figures would have been lower. Returns do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. Management fees and administrative expenses are included in the Fund’s performance. Returns for periods greater than one year are compounded average annual rates of return.
1 The Barclays Capital Intermediate Government Bond Index is a sub-index of the Barclays Capital Government Bond Index covering issues with remaining maturities of between three and five years. The Barclays Capital Government Bond Index is an index that measures the performance of all public U.S. government obligations with remaining maturities of one year or more. The returns include the reinvestment of income and do not include any transaction costs, management fees or other costs. It is not possible to invest directly in an index.
2 The Lipper returns are obtained from Lipper Analytical Services, Inc., a large independent evaluator of mutual funds.
FUND DIVERSIFICATION
![LOGO](https://capedge.com/proxy/N-CSRS/0001193125-11-325489/g260481g45y62.jpg)
Based on total net assets as of September 30, 2011. Subject to change.
PORTFOLIO SUMMARY
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Net Asset Value 9/30/11: | | $11.34 Per Share |
Net Asset Value 3/31/11: | | $11.29 Per Share |
Total Net Assets: | | $1,424.1 Million |
30-day SEC Yield 3: | | 3.33% |
12-month Distribution Rate 3: | | 2.97% |
Effective Duration 4: | | 1.2 Years |
3 The SEC Yield reflects the rate at which the Fund is earning income on its current portfolio of securities, while the distribution rate reflects the Fund’s past dividends paid to shareholders based on the net investment income distributed and the average NAV during the past 12 months. Accordingly, the Fund’s SEC yield and distribution rate may differ.
4 Duration is a measure of estimated price sensitivity relative to changes in interest rates. Portfolios with longer durations are typically more sensitive to changes in interest rates. For example, if interest rates rise by 1%, the market value of a security with an effective duration of 5 years would decrease by 5%, with all other factors being constant. The correlation between duration and price sensitivity is greater for securities rated investment-grade than it is for securities rated below investment-grade. Duration estimates are based on assumptions by the Adviser and are subject to a number of limitations. Effective duration is calculated based on historical price changes of securities held by the Fund, and therefore is a more accurate estimate of price sensitivity provided interest rates remain within their historical range.
ESTIMATED AVERAGE LIFE
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0-1 Year | | | 2.9 | % |
1-5 Years | | | 96.1 | % |
5-10 Years | | | 1.0 | % |
10-20 Years | | | 0.0 | % |
20+ Years | | | 0.0 | % |
The Adviser’s estimates of the dollar weighted average life of the portfolio’s securities, which differ from their stated maturities. The Fund’s average stated maturity was 23.1 years as of September 30, 2011.
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SCHEDULE OF INVESTMENTS (Unaudited) | | |
September 30, 2011 | | |
Sit U.S. Government Securities Fund
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Principal Amount ($) | | Coupon Rate (%) | | | Maturity Date | | | Fair Value ($) | |
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Mortgage Pass-Through Securities - 45.4% | |
Federal Home Loan Mortgage Corporation - 11.6% | |
217,255 | | | 5.50 | | | | 8/1/17-3/1/33 | | | | 236,427 | |
325,437 | | | 6.38 | | | | 12/1/26-12/1/27 | | | | 366,468 | |
16,347,102 | | | 6.50 | | | | 4/1/28-10/1/36 | | | | 18,137,125 | |
976,695 | | | 6.88 | | | | 2/17/31 | | | | 1,133,557 | |
36,536 | | | 7.00 | | | | 2/1/16 | | | | 36,938 | |
70,660,680 | | | 7.00 | | | | 8/1/27-1/1/39 | | | | 81,131,742 | |
137,777 | | | 7.38 | | | | 12/17/24 | | | | 154,245 | |
38,504,821 | | | 7.50 | | | | 9/1/26-10/1/38 | | | | 44,727,239 | |
158,637 | | | 7.95 | | | | 10/1/25-11/1/25 | | | | 186,756 | |
2,301,594 | | | 8.00 | | | | 5/1/17-1/1/37 | | | | 2,689,279 | |
31,673 | | | 8.25 | | | | 12/1/17 | | | | 35,651 | |
149,497 | | | 8.50 | | | | 5/1/16 | | | | 165,006 | |
3,269,867 | | | 8.50 | | | | 1/1/17-8/1/36 | | | | 3,892,699 | |
47,725 | | | 9.00 | | | | 11/1/15 | | | | 54,367 | |
5,888,608 | | | 9.00 | | | | 10/1/16-11/1/36 | | | | 6,941,066 | |
14,370 | | | 9.25 | | | | 6/1/16 | | | | 16,332 | |
97,253 | | | 9.25 | | | | 3/1/17-3/1/19 | | | | 102,050 | |
663,288 | | | 9.50 | | | | 10/1/16-12/17/21 | | | | 770,509 | |
83,832 | | | 9.75 | | | | 12/1/16-12/1/17 | | | | 90,589 | |
2,483,159 | | | 10.00 | | | | 9/1/20-7/1/30 | | | | 2,884,791 | |
15,252 | | | 10.25 | | | | 2/1/17 | | | | 15,320 | |
9,757 | | | 10.50 | | | | 10/1/13 | | | | 10,183 | |
113,240 | | | 10.50 | | | | 6/1/19 | | | | 128,517 | |
522,869 | | | 11.00 | | | | 9/17/16 | | | | 587,550 | |
209,918 | | | 11.00 | | | | 8/25/20 | | | | 235,887 | |
6,093 | | | 13.00 | | | | 5/1/17 | | | | 7,087 | |
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| | | | | | | | | | | 164,737,380 | |
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Federal National Mortgage Association - 26.9% | |
10,266 | | | 5.24 | | | | 3/1/19 | 1 | | | 10,890 | |
70,523 | | | 5.76 | | | | 3/1/33 | | | | 77,708 | |
1,761,990 | | | 6.00 | | | | 9/1/28-9/1/37 | | | | 1,945,914 | |
1,083,374 | | | 6.15 | | | | 6/1/33-8/1/36 | 1 | | | 1,134,147 | |
275,228 | | | 6.20 | | | | 11/1/27 | | | | 310,993 | |
121,539 | | | 6.35 | | | | 10/1/30 | | | | 137,874 | |
77,007 | | | 6.49 | | | | 2/1/32 | | | | 86,630 | |
17,589,612 | | | 6.50 | | | | 1/1/22-8/1/37 | | | | 19,643,976 | |
1,365,701 | | | 6.74 | | | | 12/1/15 | | | | 1,521,246 | |
190,610 | | | 6.91 | | | | 11/1/26-8/1/27 | | | | 218,753 | |
182,990 | | | 6.95 | | | | 8/1/21 | 1 | | | 191,262 | |
205,855,484 | | | 7.00 | | | | 6/1/17-1/1/40 | | | | 236,756,321 | |
205,462 | | | 7.45 | | | | 6/1/16 | | | | 205,233 | |
181,863 | | | 7.50 | | | | 11/1/12 | | | | 190,634 | |
62,412,392 | | | 7.50 | | | | 6/1/22-4/1/38 | | | | 72,200,609 | |
149,513 | | | 7.62 | | | | 12/1/16 | | | | 149,391 | |
370,770 | | | 7.95 | | | | 9/15/20 | | | | 423,798 | |
28,627 | | | 8.00 | | | | 4/1/16 | | | | 31,453 | |
13,874,983 | | | 8.00 | | | | 10/1/23-3/1/38 | | | | 16,131,531 | |
501,160 | | | 8.17 | | | | 11/15/31 | | | | 597,228 | |
11,893 | | | 8.25 | | | | 4/1/22 | | | | 12,712 | |
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Principal Amount ($) | | Coupon Rate (%) | | | Maturity Date | | | Fair Value ($) | |
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231,056 | | | 8.33 | | | | 7/15/20 | | | | 269,550 | |
1,227,958 | | | 8.45 | | | | 3/15/32 | | | | 1,477,746 | |
111,604 | | | 8.46 | | | | 9/15/30 | | | | 130,254 | |
237,417 | | | 8.50 | | | | 9/1/12-2/1/16 | | | | 258,388 | |
12,627,114 | | | 8.50 | | | | 9/1/17-12/1/37 | | | | 14,774,009 | |
152,724 | | | 8.59 | | | | 7/20/28 | | | | 175,372 | |
46,479 | | | 8.87 | | | | 12/15/25 | | | | 54,664 | |
6,409,183 | | | 9.00 | | | | 10/1/19-2/1/38 | | | | 7,491,631 | |
104,603 | | | 9.25 | | | | 10/1/16-2/1/17 | | | | 116,762 | |
118,317 | | | 9.40 | | | | 5/15/28 | | | | 141,343 | |
3,669,855 | | | 9.50 | | | | 11/1/18-8/1/31 | | | | 4,267,628 | |
351,723 | | | 9.73 | | | | 8/20/25 | | | | 407,400 | |
9,037 | | | 9.75 | | | | 1/15/13 | | | | 9,516 | |
133,780 | | | 9.75 | | | | 10/1/21-4/1/25 | | | | 149,983 | |
288,746 | | | 10.00 | | | | 7/1/13-3/1/15 | | | | 316,922 | |
742,799 | | | 10.00 | | | | 11/1/16-6/1/30 | | | | 858,619 | |
123,546 | | | 10.16 | | | | 7/15/20 | | | | 139,474 | |
130,977 | | | 10.18 | | | | 7/1/20 | | | | 146,806 | |
9,354 | | | 10.25 | | | | 8/15/13 | | | | 9,876 | |
77,559 | | | 10.50 | | | | 5/1/15-6/1/15 | | | | 84,433 | |
179,080 | | | 10.50 | | | | 12/1/17-6/1/28 | | | | 212,934 | |
73,179 | | | 10.84 | | | | 8/15/20 | | | | 83,173 | |
30,675 | | | 11.57 | | | | 12/15/26 | | | | 35,496 | |
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| | | | | | | | | | | 383,590,282 | |
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Government National Mortgage Association - 6.9% | |
1,229,475 | | | 5.45 | | | | 7/15/27 | | | | 1,324,510 | |
294,061 | | | 5.50 | | | | 9/15/25 | | | | 324,627 | |
3,763,313 | | | 5.67 | | | | 4/15/42 | | | | 4,056,826 | |
304,906 | | | 5.76 | | | | 3/20/33-5/20/33 | | | | 339,813 | |
7,968,367 | | | 5.85 | | | | 12/15/30 | | | | 8,449,471 | |
1,258,269 | | | 6.00 | | | | 9/15/18-11/20/34 | | | | 1,409,699 | |
75,865 | | | 6.05 | | | | 3/20/33 | | | | 85,004 | |
8,855,017 | | | 6.09 | | | | 3/15/41-7/15/41 | | | | 9,408,286 | |
924,216 | | | 6.20 | | | | 3/15/32 | | | | 1,049,042 | |
37,996 | | | 6.25 | | | | 5/15/13 | | | | 40,130 | |
3,422,296 | | | 6.25 | | | | 12/15/23-4/15/29 | | | | 3,944,753 | |
5,562,199 | | | 6.35 | | | | 4/20/30-11/20/31 | | | | 6,050,414 | |
484,653 | | | 6.38 | | | | 8/15/26-4/15/28 | | | | 556,776 | |
336,500 | | | 6.49 | | | | 11/20/31-6/20/32 | | | | 377,147 | |
25,937,144 | | | 6.50 | | | | 11/15/23-7/20/38 | | | | 29,350,406 | |
111,319 | | | 6.57 | | | | 9/20/32-3/20/33 | | | | 127,718 | |
82,597 | | | 6.58 | | | | 2/20/28 | | | | 94,554 | |
40,783 | | | 6.75 | | | | 9/15/15 | | | | 44,649 | |
827,948 | | | 6.75 | | | | 8/15/28-6/15/29 | | | | 906,510 | |
836,941 | | | 6.91 | | | | 7/20/26-2/20/27 | | | | 967,417 | |
52,626 | | | 6.93 | | | | 2/20/25 | | | | 60,669 | |
8,228,067 | | | 7.00 | | | | 6/15/31-2/20/39 | | | | 9,567,825 | |
158,562 | | | 7.02 | | | | 4/20/26 | | | | 181,652 | |
175,389 | | | 7.05 | | | | 2/15/23-4/20/27 | | | | 201,266 | |
700,093 | | | 7.10 | | | | 5/20/25 | | | | 803,725 | |
305,901 | | | 7.15 | | | | 12/20/26-4/20/27 | | | | 352,360 | |
150,203 | | | 7.25 | | | | 5/15/29-6/15/29 | | | | 174,931 | |
See accompanying notes to financial statements.
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6 | | SIT MUTUAL FUNDS SEMI-ANNUAL REPORT |
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SCHEDULE OF INVESTMENTS (Unaudited) | | |
September 30, 2011 | | |
Sit U.S. Government Securities Fund (Continued)
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Principal Amount ($) | | Coupon Rate (%) | | | Maturity Date | | | Fair Value ($) | |
| | | |
50,014 | | | 7.27 | | | | 7/20/22 | | | | 57,172 | |
55,157 | | | 7.38 | | | | 1/15/29 | | | | 64,437 | |
5,472,956 | | | 7.50 | | | | 12/15/23-3/15/39 | | | | 6,393,371 | |
21,222 | | | 7.55 | | | | 10/20/22 | | | | 24,397 | |
2,644,966 | | | 7.60 | | | | 12/15/33 | | | | 2,790,560 | |
93,945 | | | 7.63 | | | | 12/15/29 | | | | 110,171 | |
61,941 | | | 7.65 | | | | 7/20/22 | | | | 71,408 | |
364,507 | | | 7.75 | | | | 6/15/20-11/15/20 | | | | 417,604 | |
42,318 | | | 7.90 | | | | 1/20/21 | | | | 47,718 | |
739,821 | | | 7.95 | | | | 2/15/20-3/20/27 | | | | 860,544 | |
445,368 | | | 7.99 | | | | 2/20/21-6/20/22 | | | | 514,398 | |
152,074 | | | 8.00 | | | | 10/15/14-9/15/16 | | | | 169,444 | |
4,133,077 | | | 8.00 | | | | 4/15/31-8/20/33 | | | | 4,867,770 | |
325,958 | | | 8.10 | | | | 5/20/19-1/20/20 | | | | 364,476 | |
11,860 | | | 8.25 | | | | 8/15/15 | | | | 13,193 | |
279,283 | | | 8.25 | | | | 4/15/19-2/15/20 | | | | 319,260 | |
158,853 | | | 8.40 | | | | 2/15/19-2/15/20 | | | | 184,277 | |
86,762 | | | 8.50 | | | | 1/15/12-9/15/16 | | | | 98,146 | |
237,088 | | | 8.50 | | | | 1/15/17-12/20/26 | | | | 282,562 | |
32,917 | | | 8.60 | | | | 6/15/18 | | | | 37,894 | |
25,676 | | | 8.63 | | | | 10/15/18 | | | | 29,015 | |
24,772 | | | 9.00 | | | | 1/15/17-7/15/17 | | | | 28,569 | |
16,346 | | | 9.10 | | | | 5/15/18 | | | | 19,006 | |
139,664 | | | 9.50 | | | | 11/20/16-8/20/19 | | | | 163,179 | |
1,275 | | | 9.75 | | | | 11/15/12 | | | | 1,361 | |
206,759 | | | 10.00 | | | | 11/15/17-6/15/21 | | | | 244,998 | |
334,544 | | | 10.50 | | | | 2/15/20-8/15/21 | | | | 380,425 | |
13,153 | | | 11.50 | | | | 8/15/18 | | | | 13,701 | |
| | | | | | | | | | | | |
| | | | | | | | | | | 98,819,236 | |
| | | | | | | | | | | | |
Total Mortgage Pass-Through Securities (cost: $627,378,090) | | | | 647,146,898 | |
| | | | | | | | | | | | |
|
Collateralized Mortgage Obligations - 50.6% | |
Federal Home Loan Mortgage Corporation - 16.0% | |
12,927,845 | | | 3.00 | | | | 12/15/40 | | | | 13,435,879 | |
10,061,901 | | | 3.50 | | | | 7/15/24 | | | | 10,581,972 | |
98,672 | | | 5.24 | | | | 3/25/44 | 1 | | | 101,933 | |
140,529 | | | 5.50 | | | | 2/15/34 | | | | 144,432 | |
187,144 | | | 6.00 | | | | 9/15/21-6/15/28 | | | | 192,961 | |
15,484,851 | | | 6.50 | | | | 9/15/23-10/25/43 | | | | 17,996,446 | |
900,360 | | | 6.50 | | | | 9/25/43 | 1 | | | 1,035,214 | |
149,765 | | | 6.70 | | | | 9/15/23 | | | | 169,080 | |
4,017,166 | | | 6.85 | | | | 10/25/42 | 1 | | | 4,730,424 | |
323,663 | | | 6.95 | | | | 3/15/28 | | | | 376,417 | |
124,721,978 | | | 7.00 | | | | 12/15/20-9/25/43 | | | | 144,078,007 | |
20,744,054 | | | 7.50 | | | | 6/15/17-9/25/43 | | | | 24,885,242 | |
5,412,864 | | | 8.00 | | | | 3/15/21-1/15/30 | | | | 6,311,907 | |
89,460 | | | 8.25 | | | | 6/15/22 | | | | 103,577 | |
415,681 | | | 8.30 | | | | 11/15/20 | | | | 477,602 | |
911,422 | | | 8.50 | | | | 10/15/22-3/15/32 | | | | 1,061,601 | |
11,193 | | | 9.15 | | | | 10/15/20 | | | | 12,467 | |
| | | | | | | | | | | | |
Principal Amount ($) | | Coupon Rate (%) | | | Maturity Date | | | Fair Value ($) | |
| | | |
2,155,064 | | | 9.50 | | | | 2/15/20-2/25/42 | | | | 2,561,544 | |
114,736 | | | 10.00 | | | | 6/15/20 | | | | 133,701 | |
| | | | | | | | | | | | |
| | | | | | | | | | | 228,390,406 | |
| | | | | | | | | | | | |
Federal National Mortgage Association - 27.4% | |
10,423,703 | | | 4.00 | | | | 10/25/22 | | | | 11,231,083 | |
15,764,910 | | | 4.50 | | | | 6/25/21 | | | | 17,505,975 | |
635,136 | | | 5.50 | | | | 1/25/37 | | | | 703,782 | |
297,044 | | | 6.48 | | | | 3/25/29 | 1 | | | 339,441 | |
6,124,250 | | | 6.50 | | | | 12/25/23-12/25/42 | | | | 7,067,940 | |
1,474,776 | | | 6.67 | | | | 6/25/42 | 1 | | | 1,699,978 | |
28,104,948 | | | 6.75 | | | | 6/25/32-4/25/37 | | | | 32,436,748 | |
37,729 | | | 6.85 | | | | 12/18/27 | | | | 43,634 | |
5,431,111 | | | 6.96 | | | | 8/25/37 | 1 | | | 5,943,213 | |
117,913,520 | | | 7.00 | | | | 1/25/21-8/25/44 | | | | 135,824,197 | |
5,624,435 | | | 7.13 | | | | 2/25/42 | 1 | | | 6,603,011 | |
1,967,682 | | | 7.14 | | | | 6/25/42 | 1 | | | 2,369,553 | |
651,600 | | | 7.16 | | | | 12/25/42 | 1 | | | 771,745 | |
4,759,531 | | | 7.28 | | | | 10/25/42 | 1 | | | 5,611,001 | |
2,032,724 | | | 7.43 | | | | 6/17/40 | 1 | | | 2,411,821 | |
81,254,683 | | | 7.50 | | | | 8/20/27-1/25/48 | | | | 93,399,846 | |
1,467,173 | | | 7.50 | | | | 6/19/30 | 1 | | | 1,700,989 | |
10,542,165 | | | 7.69 | | | | 7/25/37 | 1 | | | 12,253,767 | |
46,679 | | | 7.70 | | | | 3/25/23 | | | | 53,570 | |
7,616,216 | | | 8.00 | | | | 7/25/22-7/25/44 | | | | 9,039,965 | |
19,655,966 | | | 8.50 | | | | 1/25/21-10/25/30 | | | | 24,066,213 | |
1,673,854 | | | 8.60 | | | | 11/25/37 | 1 | | | 2,076,702 | |
21,222 | | | 8.70 | | | | 12/25/19 | | | | 23,702 | |
29,609 | | | 8.75 | | | | 9/25/20 | | | | 32,815 | |
1,651,257 | | | 8.75 | | | | 11/25/37 | 1 | | | 1,910,671 | |
96,764 | | | 8.95 | | | | 10/25/20 | | | | 111,608 | |
3,474,404 | | | 9.00 | | | | 7/25/19-6/25/30 | | | | 4,041,855 | |
59,592 | | | 9.05 | | | | 12/25/18 | | | | 66,535 | |
75,315 | | | 9.25 | | | | 1/25/20 | | | | 86,795 | |
505,021 | | | 9.31 | | | | 3/25/39 | 1 | | | 577,714 | |
1,379,262 | | | 9.45 | | | | 6/25/32 | 1 | | | 1,599,392 | |
4,056,329 | | | 9.50 | | | | 12/25/18-12/25/41 | | | | 5,060,133 | |
86,077 | | | 9.59 | | | | 10/25/42 | 1 | | | 100,793 | |
159,112 | | | 9.60 | | | | 3/25/20 | | | | 185,122 | |
2,665,636 | | | 9.62 | | | | 2/25/44 | 1 | | | 3,318,717 | |
| | | | | | | | | | | | |
| | | | | | | | | | | 390,270,026 | |
| | | | | | | | | | | | |
Government National Mortgage Association - 4.0% | |
43,730,590 | | | 7.00 | | | | 9/16/23-6/20/40 | | | | 49,449,185 | |
452,350 | | | 7.50 | | | | 6/20/26-5/16/27 | | | | 533,978 | |
4,193,276 | | | 8.00 | | | | 10/16/29-3/16/30 | | | | 4,898,473 | |
1,846,730 | | | 8.50 | | | | 9/20/30-2/20/32 | | | | 1,862,363 | |
| | | | | | | | | | | | |
| | | | | | | | | | | 56,743,999 | |
| | | | | | | | | | | | |
Vendee Mortgage Trust - 3.2% | |
923,969 | | | 6.00 | | | | 2/15/30 | | | | 987,904 | |
22,559,319 | | | 6.50 | | | | 1/15/29-8/15/31 | | | | 26,544,133 | |
3,374,916 | | | 7.00 | | | | 3/15/28 | | | | 3,995,077 | |
See accompanying notes to financial statements.
| | |
|
SCHEDULE OF INVESTMENTS (Unaudited) | | |
September 30, 2011 | | |
Sit U.S. Government Securities Fund (Continued)
| | | | | | | | | | |
Principal Amount ($)/ Contracts | | Coupon Rate (%) | | Maturity Date | | | Fair Value ($) | |
| | | |
748,728 | | 7.25 | | | 9/15/25 | | | | 890,854 | |
3,536,439 | | 7.75 | | | 5/15/22-9/15/24 | | | | 4,163,103 | |
6,546,996 | | 8.04 | | | 3/15/25 | 1 | | | 8,228,754 | |
237,594 | | 8.29 | | | 12/15/26 | | | | 285,165 | |
| | | | | | | | | | |
| | | | | | | | | 45,094,990 | |
| | | | | | | | | | |
Total Collateralized Mortgage Obligations (cost: $705,145,233) | | | | 720,499,421 | |
| | | | | | | | | | |
Asset-Backed Securities - 1.0% | |
Federal Home Loan Mortgage Corporation - 0.7% | |
77,895 | | 6.09 | | | 9/25/29 | 1 | | | 82,368 | |
250,000 | | 6.28 | | | 10/27/31 | 1 | | | 282,511 | |
482,153 | | 6.85 | | | 11/25/30 | 1 | | | 504,852 | |
4,082,068 | | 7.15 | | | 9/25/28 | 1 | | | 4,513,237 | |
3,296,038 | | 7.16 | | | 7/25/29 | | | | 3,806,038 | |
1,258,140 | | 7.27 | | | 8/25/28 | 1 | | | 1,349,749 | |
| | | | | | | | | | |
| | | | | | | | | 10,538,755 | |
| | | | | | | | | | |
Federal National Mortgage Association - 0.3% | |
94,770 | | 0.57 | | | 11/25/32 | 1 | | | 87,484 | |
520,379 | | 4.69 | | | 10/25/33 | 1 | | | 520,317 | |
422,275 | | 5.41 | | | 9/26/33 | 1 | | | 445,707 | |
156,776 | | 5.75 | | | 2/25/33 | 1 | | | 164,465 | |
402,362 | | 6.47 | | | 10/25/31 | 1 | | | 416,842 | |
807,716 | | 6.51 | | | 5/25/32 | 1 | | | 867,449 | |
797,068 | | 6.59 | | | 10/25/31 | 1 | | | 878,518 | |
205,491 | | 6.83 | | | 7/25/31 | 1 | | | 213,876 | |
86,039 | | 7.80 | | | 6/25/26 | 1 | | | 86,004 | |
| | | | | | | | | | |
| | | | | | | | | 3,680,662 | |
| | | | | | | | | | |
Total Asset-Backed Securities (cost: $13,636,266) | | | | 14,219,417 | |
| | | | | | | | | | |
| |
Put Options Purchased 10 - 0.1% | | | | | |
300 | | U.S. Treasury 5 Year Future
Put Options: $121.5 strike November 2011 expiration |
| | | 28,125 | |
1,000 | | U.S. Treasury 5 Year Future
Put Options: $122.5 strike December 2011 expiration |
| | | 593,750 | |
| | | | | | | | | | |
| |
Total Put Options Purchased (cost: $775,029) | | | | 621,875 | |
| | | | | | | | | | |
Total Investments in Securities - 97.1% (cost: $1,346,934,618) | | | | 1,382,487,611 | |
| | | | | | | | | | |
| | | | | | |
Contracts | | | | Fair Value ($) | |
| |
Call Options Written 10 - 0.0% | | | | |
(1,750) | | U.S. Treasury 2 Year Future Call Options: $110.2 strike December 2011 expiration | | | (164,063 | ) |
(200) | | U.S. Treasury 2 Year Future Call Options: $110.2 strike November 2011 expiration | | | (6,250 | ) |
| | | | | | |
Total Call Options Written (premiums received: $487,295) | | | (170,313 | ) |
| | | | | | |
| |
Other Assets and Liabilities, net - 2.9% | | | 41,820,939 | |
| | | | | | |
| |
Total Net Assets - 100.0% | | $ | 1,424,138,237 | |
| | | | | | |
1 | Variable rate security. Rate disclosed is as of September 30, 2011. |
10 | The amount of $15,000,000 in cash was segregated with the broker to cover put options purchased and call options written as of September 30, 2011. |
Numeric footnotes not disclosed are not applicable to this Schedule of Investments.
See accompanying notes to financial statements.
| | |
8 | | SIT MUTUAL FUNDS SEMI-ANNUAL REPORT |
| | |
|
SCHEDULE OF INVESTMENTS (Unaudited) | | |
September 30, 2011 | | |
Sit U.S. Government Securities Fund (Continued)
For a complete list of security holdings refer to our company website at www.sitfunds.com.
A summary of the inputs used to value the Fund’s net assets as of September 30, 2011 is as follows (see Note 2 - significant accounting policies in the notes to financial statements):
| | | | | | | | | | | | | | |
| | Investment in Securities | |
| | | | |
| | Level 1 Quoted Price ($) | | | Level 2 Other significant observable inputs ($) | | | Level 3 Significant unobservable inputs ($) | | Total ($) | |
Assets | | | | | | | | | | | | | | |
Collateralized Mortgage Obligations | | | — | | | | 720,499,421 | | | — | | | 720,499,421 | |
Mortgage Pass-Through Securities | | | — | | | | 647,146,898 | | | — | | | 647,146,898 | |
Asset-Backed Securities | | | — | | | | 14,219,417 | | | — | | | 14,219,417 | |
Put Options Purchased | | | 621,875 | | | | — | | | — | | | 621,875 | |
| | | 621,875 | | | | 1,381,865,736 | | | — | | | 1,382,487,611 | |
Liabilities | | | | | | | | | | | | | | |
Call Options Written | | | (170,313 | ) | | | — | | | — | | | (170,313 | ) |
See accompanying notes to financial statements.
OBJECTIVE & STRATEGY
The objective of the Tax-Free Income Fund is to provide a high level of current income that is exempt from federal income tax, consistent with preservation of capital, by investing primarily in investment-grade municipal securities.
Such municipal securities generate interest income that is exempt from both federal regular income tax and federal alternative minimum tax. During normal market conditions, the Fund invests 100% of its net assets in such tax-exempt municipal securities.
The Sit Tax-Free Income Fund provided a total return of +8.01% for the six-month period ended September 30, 2011, compared with a total return of +4.76% for the Barclays Capital 5-Year Municipal Bond Index. As of September 30, 2011, the Fund’s 30-day SEC yield was +5.37% and its 12-month distribution rate was +4.72%. Most tax-exempt municipal bond yields declined during the six-month period, resulting in historically strong returns for the asset class. The yield curve flattened as long-term bond yields declined substantially and the shortest bonds actually had a modest increase in yield. Credit spreads between lower investment grade credits and high-grade municipal bonds also decreased during the period.
The Fund’s outperformance during this period was due to several factors including duration, quality, and industry positioning. In terms of duration, the Fund benefited from its longer duration versus the benchmark. From a quality perspective, the Fund benefited from its significant weighting of bonds in the BB to AA credit quality range, where each rating level outperformed the benchmark return. Nearly all of the industry segments of the portfolio outperformed the benchmark return, with the highest returns in the transportation revenue, general obligation, closed-end fund segments, and insured bonds, respectively. In addition, the four industry segments with the largest weightings in the portfolio, which were other revenue, education/ student loan revenue, single-family mortgage revenue, and healthcare, also outperformed the benchmark return. The only two industry segments in the portfolio that underperformed the benchmark for the period were multi-family housing and industrial revenue/pollution control revenue.
The Fund remains positioned longer than its benchmark in terms of duration, with significant weightings in intermediate and longer-term bonds. Although the tax-exempt yield curve did flatten during the period, it remains steep on a historical basis. We also believe that credit spreads for bonds rated A and below remain attractive. Intermediate and long tax-exempt bond yields become increasingly attractive when expressed as a percentage of comparable maturity U.S. Treasury bonds.
HYPOTHETICAL GROWTH OF $10,000
![LOGO](https://capedge.com/proxy/N-CSRS/0001193125-11-325489/g260481g64b08.jpg)
The chart above illustrates the total value of a hypothetical $10,000 investment in the Fund over the past 10 years (or for the life of the Fund if shorter) as compared to the performance of the Barclays Capital 5-Year Municipal Bond Index. Past performance does not guarantee future results. Returns include the reinvestment of distributions. The chart does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
1 The Barclays Capital 5-Year Municipal Bond Index is the 5 year (4-6) component of the Municipal Bond Index, an unmanaged, rules-based, market-value-weighted index for the long-term tax-exempt bond market. The index includes bonds with a minimum credit rating of BBB. The returns include the reinvestment of income and do not include any transaction costs, management fees or other costs. It is not possible to invest directly in an index.
Therefore, even with the strong returns provided by the Fund over the past six months, we believe the Fund’s duration, credit quality and industry weightings make it well-positioned for the current environment. As always, our strategy continues to emphasize income, which we believe is the primary driver of return over the long run. Diversification remains a key factor in managing risk.
|
Michael C. Brilley |
Debra A. Sit, CFA |
Paul J. Jungquist, CFA |
Senior Portfolio Managers |
| | |
10 | | SIT MUTUAL FUNDS SEMI-ANNUAL REPORT |
COMPARATIVE RATES OF RETURNS
as of September 30, 2011
| | | | | | | | | | | | | | | |
| | Sit Tax-Free Income Fund | | Barclays Capital 5-Year Muni Bond Index1 | | Lipper General Muni. Bond Fund Index2 |
Six Month | | | | 8.01 | % | | | | 4.76 | % | | | | n/a | |
One Year | | | | 2.99 | | | | | 3.75 | | | | | 3.00 | |
Five Years | | | | 2.99 | | | | | 5.55 | | | | | 3.98 | |
Ten Years | | | | 3.30 | | | | | 4.68 | | | | | 4.44 | |
Since Inception (9/29/88) | | | | 5.27 | | | | | 5.78 | | | | | 5.91 | |
Performance figures are historical and do not guarantee future results. Investment returns and principal value will vary, and you may have a gain or loss when you sell shares. Current performance may be lower or higher than the performance data quoted. Contact the Fund for performance data current to the most recent month-end. Returns include changes in share price as well as reinvestment of all dividends and capital gains and all fee waivers. Without the fee waivers total return and yield figures would have been lower. Returns do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. Management fees and administrative expenses are included in the Fund’s performance. Returns for periods greater than one year are compounded average annual rates of return.
1 The Barclays Capital 5-Year Municipal Bond Index is the 5 year (4-6) component of the Municipal Bond Index, an unmanaged, rules-based, market-value-weighted index for the long-term tax-exempt bond market. The index includes bonds with a minimum credit rating of BBB. The returns include the reinvestment of income and do not include any transaction costs, management fees or other costs. It is not possible to invest directly in an index.
2 The Lipper returns are obtained from Lipper Analytical Services, Inc., a large independent evaluator of mutual funds.
| | | | |
FUND DIVERSIFICATION | |
| |
Other Revenue | | | 16.8 | % |
Education/Student Loan | | | 14.4 | % |
Single Family Mortgage | | | 13.7 | % |
Hospital/Health Care | | | 12.4 | % |
Multifamily Mortgage | | | 10.3 | % |
Closed-End Mutual Funds | | | 7.2 | % |
Insured | | | 6.4 | % |
Sectors less than 5% | | | 16.2 | % |
Cash & Other Net Assets | | | 2.6 | % |
Based on total net assets as of September 30, 2011. Subject to change.
PORTFOLIO SUMMARY
| | | | |
| | |
Net Asset Value 9/30/11: | | $8.99 Per Share | | |
Net Asset Value 3/31/11: | | $8.52 Per Share | | |
Total Net Assets: | | $145.6 Million | | |
30-day SEC Yield 3: | | 5.37% | | |
Tax Equivalent Yield 4: | | 8.26% | | |
12-month Distribution Rate 3: | | 4.72% | | |
Average Maturity: | | 16.1 Years | | |
Effective Duration 5: | | 6.3 Years | | |
3 The SEC Yield reflects the rate at which the Fund is earning income on its current portfolio of securities, while the distribution rate reflects the Fund’s past dividends paid to shareholders based on the net investment income distributed and the average NAV during the past 12 months. Accordingly, the Fund’s SEC yield and distribution rate may differ.
4 The tax-equivalent yield is based on an assumed tax rate of 35.0%.
5 Duration is a measure of estimated price sensitivity relative to changes in interest rates. Portfolios with longer durations are typically more sensitive to changes in interest rates. For example, if interest rates rise by 1%, the market value of a security with an effective duration of 5 years would decrease by 5%, with all other factors being constant. The correlation between duration and price sensitivity is greater for securities rated investment-grade than it is for securities rated below investment-grade. Duration estimates are based on assumptions by the Adviser and are subject to a number of limitations. Effective duration is calculated based on historical price changes of securities held by the Fund, and therefore is a more accurate estimate of price sensitivity provided interest rates remain within their historical range.
QUALITY RATINGS (% of Total Net Assets)
![LOGO](https://capedge.com/proxy/N-CSRS/0001193125-11-325489/g260481g77z58.jpg)
Lower of Moody’s, S&P, Fitch or Duff & Phelps ratings used.
| | |
Adviser’s Assessment of Non-Rated Securities: |
AAA | | 0.4% |
AA | | 2.0 |
A | | 0.6 |
BBB | | 5.7 |
BB | | 8.9 |
<BB | | 7.1 |
Total | | 24.7% |
| | |
|
SCHEDULE OF INVESTMENTS (Unaudited) | | |
September 30, 2011 | | |
Sit Tax-Free Income Fund
| | | | | | | | | | | | |
Principal Amount ($) | | Name of Issuer | | Coupon Rate (%) | | Maturity Date | | | Fair Value ($) | |
| | | |
Municipal Bonds - 90.2% | | | | | | | | | | |
Alabama - 0.3% | | | | | | | | | | |
380,000 | | ASMS Public Education Building Rev. (ASMSF LLC Proj.) (AMBAC Insured) 9 | | 4.38 | | | 9/1/26 | | | | 371,796 | |
| | | | | | | | | | | | |
Alaska - 0.8% | | | | | | | | | | |
500,000 | | AK Hsg. Finance Corp. Mtg. Rev. (GO of Corp. Insured) | | 4.50 | | | 12/1/35 | | | | 498,510 | |
250,000 | | AK Industrial Dev. & Export Auth. Rev. (Boys & Girls Home) | | 5.50 | | | 12/1/12 | | | | 162,202 | |
500,000 | | Koyukuk Health Facility Rev. (Tanana Chief’s Conf. Health Care) | | 7.00 | | | 10/1/23 | | | | 505,480 | |
| | | | | | | | | | | | |
| | | | | | | | | | | 1,166,192 | |
| | | | | | | | | | | | |
Arizona - 2.6% | | | | | | | | | | |
1,029,308 | | AZ Health Facs. Auth. Rev. (New Arizona Family Proj.) | | 5.25 | | | 7/1/27 | | | | 933,068 | |
250,000 | | Festival Ranch Community Facs. District G.O. | | 6.25 | | | 7/15/24 | | | | 263,410 | |
225,000 | | Flagstaff Industrial Dev. Auth. Rev. (Sr. Living Community Proj.) | | 5.50 | | | 7/1/22 | | | | 208,582 | |
495,000 | | Pima Co. Industrial Dev. Auth. Education Rev. (AZ Charter Schools Proj.) | | 5.00 | | | 7/1/26 | | | | 407,548 | |
250,000 | | Pima Co. Industrial Dev. Auth. Education Rev. (AZ Charter Schools Proj.) | | 6.75 | | | 7/1/31 | | | | 240,872 | |
420,000 | | Pima Co. Industrial Dev. Auth. Education Rev. (Choice Education & Dev. Corp. Proj.) | | 6.00 | | | 6/1/16 | | | | 414,926 | |
500,000 | | Pima Co. Industrial Dev. Auth. Education Rev. (Coral Academy Science Proj.) | | 6.38 | | | 12/1/18 | | | | 494,160 | |
400,000 | | Pima Co. Industrial Dev. Auth. Education Rev. (Tucson Country Day School Proj.) | | 5.00 | | | 6/1/22 | | | | 361,164 | |
500,000 | | Quail Creek Community Facs. District G.O. | | 5.15 | | | 7/15/16 | | | | 497,990 | |
| | | | | | | | | | | | |
| | | | | | | | | | | 3,821,720 | |
| | | | | | | | | | | | |
California - 13.8% | | | | | | | | | | |
250,000 | | Abag Finance Authority for Nonprofit Corps. Rev. (Jackson Lab) | | 5.75 | | | 7/1/37 | | | | 253,638 | |
350,000 | | Acalanes Union High School District G.O. 6 | | 3.02 | | | 8/1/39 | | | | 177,744 | |
500,000 | | Agua Caliente Band of Cahuilla Indians Rev. 4 | | 6.00 | | | 7/1/18 | | | | 475,635 | |
250,000 | | Alameda Corridor Transportation Auth. Rev. Capital Appreciation (AMBAC Insured) 6 | | 6.71 | | | 10/1/24 | | | | 219,710 | |
250,000 | | Alameda Corridor Transportation Auth. Rev. Sr. Lien (NATL-RE Insured) | | 5.25 | | | 10/1/21 | | | | 250,128 | |
750,000 | | Alvord Unified School District G.O. (AGM Insured) 6 | | 6.40 | | | 8/1/25 | | | | 340,380 | |
315,000 | | CA Co. Tobacco Securitization Agy. Rev. (Golden Gate Tobacco Proj.) | | 4.50 | | | 6/1/21 | | | | 267,838 | |
500,000 | | CA Co. Tobacco Securitization Agy. Rev. (Golden Gate Tobacco Proj.) | | 5.00 | | | 6/1/36 | | | | 330,160 | |
350,000 | | CA Community Hsg. Fin. Agy. Lease Rev. Pass Thru Obligation 2, 5 | | 4.85 | | | 11/1/12 | | | | 175,004 | |
600,000 | | CA Finance Auth. Education Rev. (American Heritage Education Foundation Proj.) | | 5.25 | | | 6/1/26 | | | | 525,582 | |
250,000 | | CA Finance Auth. Rev. (Kern Regional Center Proj.) 9 | | 6.88 | | | 5/1/25 | | | | 271,668 | |
250,000 | | CA Finance Auth. Rev. (Literacy First Proj.) | | 5.50 | | | 9/1/22 | | | | 239,305 | |
495,000 | | CA Govt. Finance Auth. Lease Rev. (Placer Co. Transportation Proj.) | | 6.00 | | | 12/1/28 | | | | 504,306 | |
285,000 | | CA Hsg. Finance Agy. Home Mtg. Rev. | | 5.20 | | | 8/1/28 | | | | 276,185 | |
250,000 | | CA Hsg. Finance Agy. Home Mtg. Rev. | | 5.50 | | | 8/1/38 | | | | 239,180 | |
500,000 | | CA Infrastructure & Economic Dev. Bank Rev. | | 6.00 | | | 2/1/30 | | | | 535,915 | |
500,000 | | CA School Facs. Finance Auth. Rev. (Azusa Unified School District) (AGM Insured) 6 | | 6.00 | | | 8/1/29 | | | | 406,135 | |
250,000 | | CA State Department of Veterans Affairs Single Family Mtg. Rev. | | 5.20 | | | 12/1/28 | | | | 251,000 | |
575,000 | | CA Statewide Communities Dev. Auth. Multifamily Rev. (Orange Tree Proj.) (GNMA Collateral) | | 6.15 | | | 11/20/36 | | | | 601,806 | |
300,000 | | CA Statewide Communities Dev. Auth. Rev. | | 6.75 | | | 7/1/31 | | | | 302,193 | |
250,000 | | CA Statewide Communities Dev. Auth. Rev. (Kaiser Permanente Proj.) | | 5.50 | | | 11/1/32 | | | | 251,925 | |
500,000 | | CA Statewide Communities Dev. Auth. Rev. (Lancer Education Student Hsg. Proj.) | | 5.40 | | | 6/1/17 | | | | 500,925 | |
350,000 | | CA Statewide Communities Dev. Auth. Rev. (Sunedison Huntington Beach Solar Proj.) | | 6.00 | | | 1/1/21 | | | | 358,267 | |
500,000 | | CA Statewide Communities Dev. Auth. Rev. (Sunedison Irvine School District) | | 5.25 | | | 1/1/16 | | | | 503,365 | |
450,000 | | CA Statewide Communities Dev. Auth. Special Tax (Orinda Proj.) | | 6.00 | | | 9/1/29 | | | | 404,420 | |
500,000 | | Calexico Community Redev. Agy. Tax Allocation (Redev. Proj. Area)(AMBAC Insured) | | 4.20 | | | 8/1/28 | | | | 418,510 | |
400,000 | | Carlsbad Unified School District G.O. Capital Appreciation 6 | | 6.13 | | | 8/1/31 | | | | 251,680 | |
1,000,000 | | Colton Joint Unified School District (AGM Insured) 6 | | 5.80 | | | 8/1/35 | | | | 569,850 | |
500,000 | | Duarte Unified School District G.O. Capital Appreciation 6 | | 1.71 | | | 8/1/26 | | | | 424,895 | |
500,000 | | Encinitas Union School District G.O. Capital Appreciation 6 | | 6.75 | | | 8/1/35 | | | | 301,460 | |
1,000,000 | | Glendale Unified School District G.O. Capital Appreciation 6 | | 6.22 | | | 9/1/27 | | | | 385,590 | |
See accompanying notes to financial statements.
| | |
12 | | SIT MUTUAL FUNDS SEMI-ANNUAL REPORT |
| | |
|
SCHEDULE OF INVESTMENTS (Unaudited) | | |
September 30, 2011 | | |
Sit Tax-Free Income Fund (Continued)
| | | | | | | | | | | | |
Principal Amount ($) | | Name of Issuer | | Coupon Rate (%) | | Maturity Date | | | Fair Value ($) | |
| | | | |
500,000 | | Hartnell Community College G.O. 6 | | 7.00 | | | 8/1/34 | | | | 287,560 | |
500,000 | | Hawthorne School District C.O.P. (AGM Insured) 6 | | 6.00 | | | 12/1/29 | | | | 441,220 | |
300,000 | | Hayward Unified School District G.O (AGM-CR Insured) | | 5.00 | | | 8/1/26 | | | | 312,255 | |
250,000 | | Imperial Community College District G.O. Capital Appreciation (AGM Insured) 6 | | 0.97 | | | 8/1/40 | | | | 224,328 | |
215,000 | | Lindsay-Strathmore Irrigation District C.O.P. 9 | | 4.50 | | | 8/1/30 | | | | 215,768 | |
560,000 | | Manteca Unified School District Capital Appreciation C.O.P. (NATL-RE Insured) 6 | | 7.55 | | | 9/15/25 | | | | 231,364 | |
250,000 | | Marina Coast Water District Rev. | | 5.00 | | | 6/1/20 | | | | 269,670 | |
250,000 | | Martinez Unified School District G.O. 6 | | 6.13 | | | 8/1/35 | | | | 232,758 | |
500,000 | | Northern CA Gas Auth. No. 1 Rev. 1 | | 0.89 | | | 7/1/27 | | | | 363,380 | |
250,000 | | Palmdale C.O.P (Park Improvement & Ave. S Construction Proj.) (NATL-RE Insured) | | 5.00 | | | 9/1/32 | | | | 236,945 | |
2,100,000 | | Pittsburg Calif. Unified School District Rev. Capital Appreciation (AGM GO of District Insured) 6 | | 7.12 | | | 9/1/29 | | | | 629,496 | |
500,000 | | Placentia-Yorba Linda Unified School District C.O.P. Capital Appreciation (AGM Insured) 6 | | 6.25 | | | 10/1/28 | | | | 397,935 | |
600,000 | | Redondo Beach School District G.O. 6 | | 6.38 | | | 8/1/34 | | | | 511,182 | |
500,000 | | Richmond Community Redev. Agy. Tax Allocation | | 6.00 | | | 9/1/30 | | | | 523,150 | |
250,000 | | Richmond Joint Powers Fin. Auth. Rev. (Point Potrero) | | 6.25 | | | 7/1/24 | | | | 271,160 | |
500,000 | | Riverside Co. Redev. Agy. Tax Allocation (Interstate 215 Corridor) | | 6.00 | | | 10/1/25 | | | | 519,720 | |
500,000 | | Sacramento Co. Water Financing Auth. Rev. (NATL-RE FGIC Insured) 1 | | 0.79 | | | 6/1/39 | | | | 296,610 | |
1,000,000 | | San Bernardino City Unified School District G.O. Capital Appreciation (NATL-RE Insured) 6 | | 4.72 | | | 8/1/29 | | | | 320,360 | |
250,000 | | San Joaquin Hills Toll Road Rev. Ref. (NATL-RE Insured) | | 5.25 | | | 1/15/30 | | | | 197,490 | |
250,000 | | South Bayside Waste Management Auth. Rev. (Shoreway Environmental) | | 6.25 | | | 9/1/29 | | | | 263,040 | |
350,000 | | Southwest Community Finance Auth. Rev. (Riverside Co. Proj.) 9 | | 6.00 | | | 5/1/24 | | | | 388,241 | |
350,000 | | Sulphur Springs Union School District C.O.P. Capital Appreciation (AGM Insured) 6 | | 1.31 | | | 12/1/37 | | | | 311,451 | |
755,000 | | Sutter Union High School District G.O. Capital Appreciation 6 | | 7.25 | | | 8/1/33 | | | | 188,758 | |
500,000 | | Tustin Unified School District G.O. Capital Appreciation 6 | | 6.05 | | | 8/1/28 | | | | 334,615 | |
400,000 | | Upland C.O.P. (San Antonio Community Hospital Proj.) | | 6.38 | | | 1/1/32 | | | | 433,216 | |
500,000 | | Val Verde Unified School District G.O. Capital Appreciation (AGM Insured) 6 | | 6.13 | | | 8/1/34 | | | | 286,270 | |
250,000 | | Vallejo City Unified School District Special Tax (Community Facilities District No. 2) (XLCA Insured) | | 4.15 | | | 9/1/31 | | | | 187,388 | |
500,000 | | Westminster School District G.O. 6 | | 5.37 | | | 8/1/24 | | | | 249,020 | |
| | | | | | | | | | | | |
| | | | | | | | | | | 20,138,749 | |
| | | | | | | | | | | | |
Colorado - 2.5% | | | | | | | | | | |
250,000 | | CO Education & Cultural Facs. Auth. Rev. (CO Springs Charter Academy Proj.) | | 5.60 | | | 7/1/34 | | | | 245,560 | |
500,000 | | CO Education & Cultural Facs. Auth. Rev. Ref. (Vail Mountain School Proj.) | | 6.00 | | | 5/1/30 | | | | 501,300 | |
425,000 | | CO Hsg. Finance Auth. Single Family Mtg. Rev. | | 5.50 | | | 11/1/29 | | | | 437,346 | |
625,000 | | CO Hsg. Finance Auth. Single Family Mtg. Rev. (FHA Insured) | | 5.00 | | | 11/1/34 | | | | 637,262 | |
965,000 | | Denver Health & Hospital Auth. Healthcare Rev. 1 | | 1.32 | | | 12/1/33 | | | | 652,398 | |
654,593 | | Lyons Rev. (Longmont Humane Society Proj.) | | 4.75 | | | 11/30/16 | | | | 636,723 | |
500,000 | | Regional Transportation District Private Activity Rev. (Denver Trans. Partners) | | 6.00 | | | 1/15/34 | | | | 512,295 | |
| | | | | | | | | | | | |
| | | | | | | | | | | 3,622,884 | |
| | | | | | | | | | | | |
Connecticut - 1.7% | | | | | | | | | | |
300,000 | | CT Hsg. Finance Auth. Rev. | | 5.15 | | | 11/15/34 | | | | 308,559 | |
500,000 | | CT Hsg. Finance Auth. Rev. (GO of Auth.) | | 4.75 | | | 11/15/35 | | | | 507,385 | |
425,000 | | CT Hsg. Finance Auth. Rev. (GO of Auth.) | | 4.90 | | | 11/15/36 | | | | 434,936 | |
500,000 | | Hamden Facs. Rev. (Whitney Center Proj.) | | 6.13 | | | 1/1/14 | | | | 500,370 | |
500,000 | | Harbor Point Infrastructure Improvement District Special Obligation Rev. Tax Allocation | | 7.00 | | | 4/1/22 | | | | 552,895 | |
300,000 | | Mashantucket Western Pequot Tribe Sub. Special Rev. 2, 4, 5 | | 5.75 | | | 9/1/18 | | | | 111,030 | |
| | | | | | | | | | | | |
| | | | | | | | | | | 2,415,175 | |
| | | | | | | | | | | | |
Delaware - 0.2% | | | | | | | | | | |
410,000 | | Millsboro Special Obligation Rev. (Plantation Lakes Dev. District) | | 5.45 | | | 7/1/36 | | | | 298,697 | |
| | | | | | | | | | | | |
Florida - 5.9% | | | | | | | | | | |
500,000 | | Bay Co. Educational Facs. Rev. (Bay Haven Charter) | | 5.25 | | | 9/1/30 | | | | 441,910 | |
See accompanying notes to financial statements.
| | |
|
SCHEDULE OF INVESTMENTS (Unaudited) | | |
September 30, 2011 | | |
Sit Tax-Free Income Fund (Continued) | | |
| | | | | | | | | | | | |
Principal Amount ($) | | Name of Issuer | | Coupon Rate (%) | | Maturity Date | | | Fair Value ($) | |
| | | | |
1,000,000 | | Capital Trust Agy. Rev. (American Opportunity Proj.) 2, 5 | | 5.88 | | | 6/1/38 | | | | 250,000 | |
335,000 | | Capital Trust Agy. Rev. (Golf Villas, Rivermill, and Village Square Apartments Proj.) 2, 5 | | 4.75 | | | 6/1/13 | | | | 83,750 | |
415,000 | | Collier Co. Industrial Dev. Auth. Rev. (NCH Healthcare System Proj.) | | 6.25 | | | 10/1/39 | | | | 433,737 | |
400,000 | | Connerton West Community Dev. District Cap. Improvement Special Assessment Rev. (Pasco Co.) 2, 5 | | 5.13 | | | 5/1/16 | | | | 160,560 | |
100,000 | | Fiddlers Creek Community Dev. District No. 2 Special Assessment Rev. 2, 5 | | 5.75 | | | 5/1/13 | | | | 36,080 | |
235,000 | | FL Hsg. Finance Corp. (FHLMC Collateralized) | | 5.05 | | | 1/1/27 | | | | 247,272 | |
250,000 | | FL Hsg. Finance Corp. (GNMA/FNMA Collateralized) | | 5.00 | | | 7/1/26 | | | | 263,570 | |
250,000 | | FL Mid-Bay Bridge Authority 6 | | 6.95 | | | 10/1/21 | | | | 139,860 | |
35,000 | | Forest Creek Community Dev. District Capital Improvement Special Assessment Rev. 2, 5 | | 7.00 | | | 11/1/13 | | | | 34,012 | |
135,000 | | Gramercy Farms Community Dev. District Special Assessment 2, 5 | | 5.10 | | | 5/1/14 | | | | 1 | |
535,000 | | Gramercy Farms Community Dev. District Special Assessment 6 | | 3.24 | | | 5/1/39 | | | | 66,377 | |
500,000 | | Highlands Co. Health Facs. Auth. Rev. (Adventist Health) 1 | | 5.00 | | | 11/15/31 | | | | 507,035 | |
400,000 | | Jacksonville Economic Dev. Commission Health Care Facs. Rev. Ref. | | 6.00 | | | 9/1/17 | | | | 421,724 | |
500,000 | | Lake Ashton Community Dev. District Cap. Improvement Special Assessment Rev. 2, 5 | | 5.00 | | | 11/1/11 | | | | 170,850 | |
500,000 | | Lakewood Ranch Stewardship District Cap. Improvement Special Assesment Rev. (Lakewood Center) | | 7.40 | | | 5/1/30 | | | | 507,135 | |
1,000,000 | | Lee Co. Industrial Dev. Auth. Health Care Facs. Rev. (Lee Charter Foundation) | | 5.25 | | | 6/15/27 | | | | 856,860 | |
250,000 | | Magnolia Creek Community Dev. District Rev. 2, 5 | | 5.60 | | | 5/1/14 | | | | 112,725 | |
265,000 | | Miami-Dade Co. Special Obligation (NATL-RE Insured) 6 | | 5.44 | | | 10/1/33 | | | | 65,421 | |
230,000 | | New River Community Dev. District Cap. Improvement Special Assessment Rev. 2, 5 | | 5.00 | | | 5/1/13 | | | | 2 | |
135,000 | | New River Community Dev. District Cap. Improvement Special Assessment Rev. 6 | | 1.96 | | | 5/1/15 | | | | 112,151 | |
275,000 | | New River Community Dev. District Cap. Improvement Special Assessment Rev. 6 | | 1.85 | | | 5/1/18 | | | | 116,251 | |
140,000 | | New River Community Dev. District Cap. Improvement Special Assessment Rev. 6 | | 0.40 | | | 5/1/38 | | | | 83,639 | |
350,000 | | New River Community Dev. District Cap. Improvement Special Assessment Rev. 6 | | 0.80 | | | 5/1/38 | | | | 131,782 | |
265,000 | | Pinellas Co. Educational Facilities Auth. Rev. | | 6.13 | | | 9/15/21 | | | | 264,891 | |
750,000 | | Sarasota Co. Health Facs. Auth. Retirement Rev. Ref. (Village on the Isle) | | 5.50 | | | 1/1/27 | | | | 711,353 | |
500,000 | | Seminole Tribe Special Obligation Rev. 4 | | 5.50 | | | 10/1/24 | | | | 463,595 | |
340,000 | | St. Lucie West Services District Rev. (NATL-RE Insured) | | 6.00 | | | 10/1/22 | | | | 344,665 | |
600,000 | | Tallahassee Health Facs. Rev. (Memorial Health Care Proj.) | | 6.38 | | | 12/1/30 | | | | 600,312 | |
650,000 | | Tolomato Community Dev. District Special Assessment 2, 5 | | 6.38 | | | 5/1/17 | | | | 471,348 | |
650,000 | | Waters Edge Community Dev. District Cap. Improvement Special Assessment Rev. 2, 5 | | 5.00 | | | 11/1/12 | | | | 286,650 | |
50,000 | | West Villages Improvement District Special Assessment Rev. (Unit of Dev. No. 3) 2, 5 | | 5.50 | | | 5/1/37 | | | | 22,340 | |
450,000 | | Zephyr Ridge Community Dev. District Special Assessment Rev. 2, 5 | | 5.25 | | | 5/1/13 | | | | 179,100 | |
| | | | | | | | | | | | |
| | | | | | | | | | | 8,586,958 | |
| | | | | | | | | | | | |
Georgia - 2.0% | | | | | | | | | | |
250,000 | | Atlanta Water and Wastewater Rev. (NATL-RE Insured) | | 5.00 | | | 11/1/39 | | | | 250,575 | |
1,355,000 | | East Point Tax Allocation | | 8.00 | | | 2/1/26 | | | | 1,365,501 | |
300,000 | | GA State Environmental Loan Acquisition Corp. Rev. | | 5.13 | | | 2/15/31 | | | | 321,789 | |
750,000 | | GA State Environmental Loan Acquisition Corp. Rev. | | 5.13 | | | 3/15/31 | | | | 805,290 | |
250,000 | | Medical Center Hospital Auth. Rev. Ref. (Spring Harbor Green Island Proj.) | | 5.25 | | | 7/1/27 | | | | 222,388 | |
| | | | | | | | | | | | |
| | | | | | | | | | | 2,965,543 | |
| | | | | | | | | | | | |
Guam - 0.3% | | | | | | | | | | |
450,000 | | Northern Mariana Islands Commonwealth G.O. | | 5.00 | | | 10/1/22 | | | | 375,822 | |
| | | | | | | | | | | | |
Hawaii - 0.2% | | | | | | | | | | |
350,000 | | HI State Dept. of Budget & Fin. Rev. (Kahala Nui Proj.) | | 8.00 | | | 11/15/33 | | | | 365,127 | |
| | | | | | | | | | | | |
Idaho - 0.3% | | | | | | | | | | |
570,000 | | ID Hsg. & Fin. Assoc. Nonprofit Facs. Rev. (Compass Public Charter School Proj.) | | 5.50 | | | 7/1/30 | | | | 496,960 | |
| | | | | | | | | | | | |
Illinois - 8.3% | | | | | | | | | | |
5,000 | | Chicago Metro Hsg. Dev. Corp. Mtg. Rev. Ref. (Section 8) (FHA Insured) | | 6.85 | | | 7/1/22 | | | | 5,011 | |
1,000,000 | | Dekalb, Kane & Lasalle Counties Comm. College Dist. No. 523 G.O. Capital Appreciation 6 | | 6.58 | | | 2/1/30 | | | | 315,770 | |
500,000 | | Harvey Ref. & Improvement G.O. | | 5.50 | | | 12/1/27 | | | | 429,325 | |
See accompanying notes to financial statements.
| | |
14 | | SIT MUTUAL FUNDS SEMI-ANNUAL REPORT |
| | |
|
SCHEDULE OF INVESTMENTS (Unaudited) | | |
September 30, 2011 | | |
Sit Tax-Free Income Fund (Continued)
| | | | | | | | | | | | |
Principal Amount ($) | | Name of Issuer | | Coupon Rate (%) | | Maturity Date | | | Fair Value ($) | |
| | | | |
265,000 | | IL C.O.P. (NATL-RE Insured) | | 5.80 | | | 7/1/17 | | | | 265,130 | |
250,000 | | IL Fin. Auth. Rev. | | 6.00 | | | 10/1/24 | | | | 258,740 | |
500,000 | | IL Fin. Auth. Rev. (Chicago Charter School Foundation Proj.) | | 5.00 | | | 12/1/36 | | | | 458,470 | |
100,000 | | IL Fin. Auth. Rev. (Local Government PG-Metro. Proj.) | | 5.00 | | | 12/1/24 | | | | 100,626 | |
250,000 | | IL Fin. Auth. Rev. (Noble Network Charter Schools) (ACA Insured) | | 5.00 | | | 9/1/27 | | | | 202,032 | |
395,000 | | IL Fin. Auth. Rev. (TEMPS-50-The Admiral at the Lake Proj.) | | 6.00 | | | 5/15/17 | | | | 393,479 | |
250,000 | | IL Fin. Auth. Rev. (UNO Charter School Network) | | 6.88 | | | 10/1/31 | | | | 248,978 | |
1,000,000 | | IL Fin. Auth. Sports Facs. Rev. (North Shore Ice Arena Proj.) | | 6.25 | | | 12/1/38 | | | | 568,730 | |
500,000 | | IL Fin. Auth. Sports Facs. Rev. (United Sports Organizations of Barrington Proj.) 2, 4, 5 | | 6.13 | | | 10/1/27 | | | | 99,715 | |
500,000 | | IL Fin. Auth. Sports Facs. Rev. (United Sports Organizations of Barrington Proj.) 2, 4, 5 | | 6.25 | | | 10/1/37 | | | | 99,020 | |
160,000 | | IL Health Facs. Auth. Rev. (Ingalls Health System Proj.) (NATL-RE Insured) | | 6.25 | | | 5/15/14 | | | | 159,128 | |
250,000 | | Lake Co. Community Consolidated School District No. 50 Woodland G.O. | | 5.63 | | | 1/1/26 | | | | 275,150 | |
115,000 | | Lombard Public Facs. Corp. Rev. First Tier (Conference Center & Hotel Proj.) | | 6.38 | | | 1/1/15 | | | | 81,122 | |
1,925,000 | | Lombard Public Facs. Corp. Rev. First Tier (Conference Center & Hotel Proj.) | | 5.25 | | | 1/1/36 | | | | 1,355,643 | |
550,000 | | Lombard Public Facs. Corp. Rev. First Tier (Conference Center & Hotel Proj.) (ACA Insured) | | 5.50 | | | 1/1/25 | | | | 375,870 | |
250,000 | | Macon County School District No. 61 Decatur G.O. (AGM Insured) | | 5.25 | | | 1/1/37 | | | | 258,872 | |
2,000,000 | | Malta Tax Allocation Rev. | | 5.75 | | | 12/30/25 | | | | 1,312,980 | |
818,000 | | Manhattan Special Service Area Special Tax No. 07-6 (Groebe Farm-Stonegate) 2, 5 | | 5.75 | | | 3/1/22 | | | | 245,727 | |
310,000 | | Northern Illinios University Rev. (Auxiliary Facs.) (AGM Insured) | | 5.50 | | | 4/1/26 | | | | 333,517 | |
500,000 | | Railsplitter Tobacco Settlement Auth. Rev. | | 6.25 | | | 6/1/24 | | | | 526,765 | |
2,475,000 | | Southwestern IL Dev. Auth. Rev. (Anderson Hospital Proj.) | | 5.63 | | | 8/15/29 | | | | 2,474,752 | |
440,000 | | Southwestern IL Dev. Auth. Rev. (Village of Sauget Proj.) | | 5.63 | | | 11/1/26 | | | | 330,880 | |
635,000 | | Southwestern IL Dev. Auth. Tax Allocation Ref. (Local Govt. Program) | | 7.00 | | | 10/1/22 | | | | 623,100 | |
280,000 | | St. Clair Co. Township High School District No. 203 O’Fallon G.O. (AMBAC Insured) | | 5.75 | | | 12/1/26 | | | | 302,408 | |
| | | | | | | | | | | | |
| | | | | | | | | | | 12,100,940 | |
| | | | | | | | | | | | |
Indiana - 2.3% | | | | | | | | | | |
300,000 | | Damon Run Conservancy Dist. G.O. (St Intercept Insured) | | 6.10 | | | 7/1/25 | | | | 318,393 | |
370,000 | | East Chicago Redev. Commission Tax Allocation (Harborside Redev. Proj.) | | 5.50 | | | 1/15/16 | | | | 364,561 | |
100,000 | | Elkhart Co. Hospital Auth. Rev. (Elkhart General Hospital Proj.) (AMBAC-TCRS Insured) | | 5.25 | | | 8/15/28 | | | | 100,006 | |
400,000 | | Hammond Local Public Improvement Bond Bank | | 6.50 | | | 8/15/25 | | | | 412,212 | |
250,000 | | Hammond Local Public Improvement Bond Bank | | 6.50 | | | 8/15/30 | | | | 254,330 | |
3,000,000 | | IN Finance Auth. Rev. (BHI Senior Living) | | 5.50 | | | 11/15/26 | | | | 306,990 | |
250,000 | | IN Finance Auth. Rev. (Drexel Foundation Educational Facs. Proj.) | | 6.00 | | | 10/1/21 | | | | 252,688 | |
295,000 | | IN Finance Auth. Rev. (Parkview Health System) | | 5.75 | | | 5/1/31 | | | | 312,054 | |
350,000 | | IN Health & Educational Fac. Fin. Auth. Rev. (Schneck Memorial Hospital Proj.) | | 5.25 | | | 2/15/30 | | | | 352,832 | |
360,000 | | IN Health Facs. Fin. Auth. Hospital Rev. (Community Foundation Northwest IN) | | 6.38 | | | 8/1/21 | | | | 364,208 | |
305,000 | | IN Health Facs. Fin. Auth. Hospital Rev. (Community Hospital of Anderson Proj.) | | 6.00 | | | 1/1/23 | | | | 305,430 | |
368,354 | | St. Joseph Co. Hospital Auth. Health Facs. Rev. (Madison Center) 2, 5 | | 5.25 | | | 2/15/28 | | | | 63,250 | |
| | | | | | | | | | | | |
| | | | | | | | | | | 3,406,954 | |
| | | | | | | | | | | | |
Iowa - 1.7% | | | | | | | | | | |
500,000 | | Cedar Falls Community School District Rev. | | 5.13 | | | 6/1/25 | | | | 533,405 | |
410,000 | | IA Finance Auth. Sr. Hsg. Rev. Ref. (Walnut Ridge Proj.) | | 5.00 | | | 12/1/14 | | | | 355,068 | |
500,000 | | IA Finance Auth. Sr. Living Facs. Rev. (Deerfield Retirement Community, Inc.) | | 5.00 | | | 11/15/21 | | | | 389,860 | |
500,000 | | IA Student Loan Liquidity Corp. Rev. | | 5.25 | | | 12/1/24 | | | | 499,835 | |
250,000 | | IA Student Loan Liquidity Corp. Rev. | | 5.80 | | | 12/1/31 | | | | 257,848 | |
225,000 | | Mason City Community School District Rev. | | 5.00 | | | 7/1/29 | | | | 229,473 | |
250,000 | | Waterloo Community School District Rev. | | 5.00 | | | 7/1/29 | | | | 255,950 | |
| | | | | | | | | | | | |
| | | | | | | | | | | 2,521,439 | |
| | | | | | | | | | | | |
Kentucky - 0.2% | | | | | | | | | | |
350,000 | | Kentucky Economic Development Fin. Auth. Rev. | | 6.63 | | | 10/1/28 | | | | 350,060 | |
| | | | | | | | | | | | |
See accompanying notes to financial statements.
| | |
|
SCHEDULE OF INVESTMENTS (Unaudited) | | |
September 30, 2011 | | |
Sit Tax-Free Income Fund (Continued) | | |
| | | | | | | | | | | | |
Principal Amount ($) | | Name of Issuer | | Coupon Rate (%) | | Maturity Date | | | Fair Value ($) | |
| | | |
Louisiana - 3.1% | | | | | | | | | | |
248,473 | | Denham Springs/Livingston Hsg. & Mtg. Finance Auth. Rev. | | 5.00 | | | 11/1/40 | | | | 258,057 | |
1,010,000 | | Jefferson Parish Finance Auth. Single Family Mtg. Rev. | | 5.00 | | | 6/1/38 | | | | 1,046,774 | |
185,000 | | LA Hsg. Fin. Agy. Single Family Mtg. Rev. (Home Ownership Program) | | 6.00 | | | 12/1/28 | | | | 199,817 | |
1,545,000 | | LA Hsg. Fin. Agy. Single Family Mtg. Rev. (Home Ownership Program) | | 5.70 | | | 12/1/38 | | | | 1,631,118 | |
400,000 | | LA Hsg. Fin. Agy. Single Family Mtg. Rev. (Mtg. Backed Securities Program) | | 4.60 | | | 6/1/29 | | | | 409,232 | |
250,000 | | LA Public Facs. Auth. Rev. (Belle-Chase Educational Foundation Proj.) (NATL-RE Insured) | | 6.50 | | | 5/1/31 | | | | 263,465 | |
750,000 | | LA Public Facs. Auth. Rev. (Tulane Univ. Proj.) (NATL-RE Insured) 1 | | 0.89 | | | 2/15/36 | | | | 542,962 | |
111,000 | | Lafayette Public Finance Auth. Single Family Mortgage-Backed Rev. | | 5.35 | | | 1/1/41 | | | | 114,289 | |
| | | | | | | | | | | | |
| | | | | | | | | | | 4,465,714 | |
| | | | | | | | | | | | |
Maine - 0.6% | | | | | | | | | | |
355,000 | | ME Education Auth. Student Loan Rev. (Assured Guaranty) | | 5.63 | | | 12/1/27 | | | | 382,786 | |
500,000 | | ME Health & Higher Educational Facs. Auth. Rev. (ME General Medical Center) | | 7.50 | | | 7/1/32 | | | | 543,155 | |
| | | | | | | | | | | | |
| | | | | | | | | | | 925,941 | |
| | | | | | | | | | | | |
Maryland - 1.1% | | | | | | | | | | |
235,000 | | MD Community Dev. Administration Rev. | | 5.13 | | | 9/1/30 | | | | 245,801 | |
575,000 | | MD Health & Higher Educational Facs. Auth. Rev. (Adventist Healthcare) | | 6.25 | | | 1/1/31 | | | | 595,625 | |
515,000 | | MD Health & Higher Educational Facs. Auth. Rev. (Patterson Park School) | | 5.75 | | | 7/1/30 | | | | 500,003 | |
500,000 | | Montgomery County Housing Opportunites Commission Single Family Mtg. Rev. 6 | | 5.62 | | | 7/1/28 | | | | 196,725 | |
| | | | | | | | | | | | |
| | | | | | | | | | | 1,538,154 | |
| | | | | | | | | | | | |
Massachusetts - 1.7% | | | | | | | | | | |
350,000 | | MA Dev. Fin. Agy. Rev. (Foxborough Regional Charter School) | | 6.38 | | | 7/1/30 | | | | 366,926 | |
80,000 | | MA Development Finance Agency Facs. Rev. | | 6.25 | | | 6/1/14 | | | | 79,943 | |
460,000 | | MA Education Finance Auth. Education Rev. | | 5.15 | | | 1/1/26 | | | | 493,166 | |
240,000 | | MA Education Finance Auth. Education Rev. | | 5.25 | | | 1/1/28 | | | | 252,955 | |
250,000 | | MA Health & Educational Facilities Auth. Rev. | | 6.00 | | | 7/1/22 | | | | 253,445 | |
250,000 | | MA Housing Finance Agy. Rev. | | 4.75 | | | 6/1/35 | | | | 250,755 | |
500,000 | | MA Housing Finance Agy. Rev. | | 5.40 | | | 12/1/37 | | | | 519,515 | |
250,000 | | MA Housing Finance Agy. Rev. (FHA Insured) | | 5.30 | | | 12/1/38 | | | | 260,202 | |
| | | | | | | | | | | | |
| | | | | | | | | | | 2,476,907 | |
| | | | | | | | | | | | |
Michigan - 2.1% | | | | | | | | | | |
345,000 | | Advanced Technology Academy Rev. | | 6.00 | | | 11/1/28 | | | | 310,900 | |
500,000 | | Detroit City School Dist. G.O. (School Building & Site Improvement) (FGIC-Q SBLF Insured) | | 5.00 | | | 5/1/28 | | | | 503,615 | |
250,000 | | MI Finance Auth. Ltd. Obligation Rev. (Public School Academy-University Learning Proj.) | | 6.25 | | | 11/1/20 | | | | 249,298 | |
250,000 | | MI Hospital Finance Auth. Rev. (Mid-Michigan Obligation Group Proj.) | | 6.13 | | | 6/1/34 | | | | 265,100 | |
500,000 | | MI Public Education Facs. Auth. Ltd. Rev. Ref. (Nataki Talibah Proj.) (Q-SBLF Insured) | | 6.25 | | | 10/1/23 | | | | 445,655 | |
500,000 | | MI Public Education Facs. Auth. Ltd. Rev. Ref. (Richfield Public School Proj.) | | 5.00 | | | 9/1/22 | | | | 444,130 | |
560,000 | | MI Public Education Facs. Auth. Rev. Ref. (Bradford Proj.) 4 | | 6.00 | | | 9/1/16 | | | | 569,968 | |
345,000 | | MI Tobacco Settlement Finance Auth. Sr. Rev. | | 5.13 | | | 6/1/22 | | | | 282,866 | |
| | | | | | | | | | | | |
| | | | | | | | | | | 3,071,532 | |
| | | | | | | | | | | | |
Minnesota - 2.2% | | | | | | | | | | |
2,027,853 | | Intermediate School District 287 Lease Rev. | | 5.30 | | | 11/1/32 | | | | 2,056,142 | |
500,000 | | Minneapolis Mulitfamily Hsg. Rev. (Riverside Plaza) | | 6.00 | | | 11/1/13 | | | | 494,800 | |
575,000 | | MN Hsg. Fin. Agy. Residential Hsg. Rev. | | 5.10 | | | 1/1/40 | | | | 590,358 | |
| | | | | | | | | | | | |
| | | | | | | | | | | 3,141,300 | |
| | | | | | | | | | | | |
Mississippi - 0.5% | | | | | | | | | | |
300,000 | | MS Development Bank Rev. (Magnolia Reg. Health Center Proj.) | | 6.50 | | | 10/1/31 | | | | 313,455 | |
See accompanying notes to financial statements.
| | |
16 | | SIT MUTUAL FUNDS SEMI-ANNUAL REPORT |
| | |
|
SCHEDULE OF INVESTMENTS (Unaudited) | | |
September 30, 2011 | | |
Sit Tax-Free Income Fund (Continued) | | |
| | | | | | | | | | | | |
Principal Amount ($) | | Name of Issuer | | Coupon Rate (%) | | Maturity Date | | | Fair Value ($) | |
| | | | |
170,000 | | MS Home Corp. Single Family Mtg. Rev. (GNMA/FNMA/FHLMC Collateralized) | | 5.60 | | | 6/1/38 | | | | 182,352 | |
255,000 | | MS Home Corp. Single Family Mtg. Rev. (GNMA/FNMA/FHLMC Collateralized) | | 6.75 | | | 6/1/39 | | | | 276,833 | |
| | | | | | | | | | | | |
| | | | | | | | | | | 772,640 | |
| | | | | | | | | | | | |
Missouri - 2.5% | | | | | | | | | | |
500,000 | | Chillicothe Tax Increment Rev. (South U.S. 65 Proj.) | | 5.63 | | | 4/1/27 | | | | 436,440 | |
480,000 | | Community Memorial Hospital District Rev. | | 6.68 | | | 12/1/34 | | | | 512,270 | |
250,000 | | Independence 39th St. Transportation District Rev. Ref. & Improvement | | 6.88 | | | 9/1/32 | | | | 241,002 | |
500,000 | | Kansas City Industrial Dev. Auth. Rev. (Kansas City Pkg. LLC) | | 5.45 | | | 9/1/23 | | | | 509,165 | |
500,000 | | Kirkwood Industrial Dev. Auth. Retirement Community Rev. (Aberdeen Heights) | | 7.00 | | | 11/15/15 | | | | 501,730 | |
750,000 | | Lakeside 370 Levee District Improvement Special Tax | | 7.00 | | | 4/1/28 | | | | 716,190 | |
250,000 | | MO Health & Educational Facs. Auth. (Senior Living Facs.-Lutheran Senior) | | 5.38 | | | 2/1/35 | | | | 235,570 | |
500,000 | | Moberly Industrial Dev. Auth. (Annual Appropriation Proj.) | | 6.00 | | | 9/1/24 | | | | 459,215 | |
| | | | | | | | | | | | |
| | | | | | | | | | | 3,611,582 | |
| | | | | | | | | | | | |
Montana - 0.8% | | | | | | | | | | |
175,000 | | MT Board of Housing Single Family Rev. (GO of BRD Insured) | | 4.70 | | | 12/1/26 | | | | 181,701 | |
250,000 | | MT Board of Housing Single Family Rev. (GO of BRD Insured) | | 4.85 | | | 6/1/28 | | | | 260,160 | |
745,970 | | MT Facs. Finance Auth. Rev. (Great Falls Pre-Release Services Proj.) | | 5.08 | | | 4/1/21 | | | | 778,248 | |
| | | | | | | | | | | | |
| | | | | | | | | | | 1,220,109 | |
| | | | | | | | | | | | |
Nebraska - 0.6% | | | | | | | | | | |
410,000 | | Mead Village Tax Allocation Rev. (E3 Biofuels - Mead LLC Proj.) 2, 5 | | 5.13 | | | 7/1/12 | | | | 331,678 | |
500,000 | | NE Investment Fin. Auth. Single Family Hsg. Rev. (GNMA/FNMA/FHLMC Collateralized) | | 5.90 | | | 9/1/36 | | | | 547,860 | |
| | | | | | | | | | | | |
| | | | | | | | | | | 879,538 | |
| | | | | | | | | | | | |
Nevada - 2.5% | | | | | | | | | | |
250,000 | | Clark Co. Economic Dev. Rev. (Alexander Dawson School Proj.) | | 5.38 | | | 5/15/33 | | | | 252,440 | |
415,000 | | Clark Co. Improvement Special Assessment (Summerlin Proj.) | | 4.85 | | | 2/1/17 | | | | 397,387 | |
600,000 | | Las Vegas Paiute Tribe Rev. (ACA Insured) | | 6.63 | | | 11/1/17 | | | | 477,780 | |
750,000 | | Las Vegas Redev. Agy. Tax Allocation Rev. | | 7.50 | | | 6/15/23 | | | | 870,720 | |
450,000 | | NV Hsg. Dev. Single Family Mtg. Program Mezzanine (GNMA/FNMA/FHLMC Collateralized) | | 5.10 | | | 10/1/40 | | | | 461,444 | |
500,000 | | Sparks Redev. Agy. Tax Increment Rev. (Redev. Area No. 1 Proj.) | | 5.00 | | | 1/15/22 | | | | 498,290 | |
460,000 | | Sparks Redev. Agy. Tax Increment Rev. (Redev. Area No. 2 Proj.) | | 6.40 | | | 6/1/20 | | | | 467,167 | |
250,000 | | Sparks Tourism Improvement District No. 1 Sr. Sales Tax Rev. 4 | | 6.50 | | | 6/15/20 | | | | 229,430 | |
| | | | | | | | | | | | |
| | | | | | | | | | | 3,654,658 | |
| | | | | | | | | | | | |
New Hampshire - 0.9% | | | | | | | | | | |
890,000 | | Manchester Hsg. & Redev. Auth. Rev. (ACA Insured) | | 6.75 | | | 1/1/15 | | | | 853,163 | |
400,000 | | NH Health & Educ. Facs. Auth. Rev. (Wentworth Douglas Hosipital) | | 6.00 | | | 1/1/34 | | | | 420,532 | |
| | | | | | | | | | | | |
| | | | | | | | | | | 1,273,695 | |
| | | | | | | | | | | | |
New Jersey - 1.6% | | | | | | | | | | |
750,000 | | NJ Higher Education Assistance Auth. Student Loan Rev. | | 5.00 | | | 6/1/27 | | | | 773,183 | |
250,000 | | NJ Higher Education Assistance Auth. Student Loan Rev. | | 5.00 | | | 12/1/28 | | | | 258,910 | |
250,000 | | NJ Higher Education Assistance Auth. Student Loan Rev. | | 4.75 | | | 12/1/29 | | | | 253,052 | |
965,000 | | NJ Hsg. & Mtg. Finance Agy. Rev. | | 5.05 | | | 10/1/39 | | | | 985,294 | |
| | | | | | | | | | | | |
| | | | | | | | | | | 2,270,439 | |
| | | | | | | | | | | | |
New Mexico - 1.3% | | | | | | | | | | |
460,000 | | NM Mtg. Fin. Auth. Single Family Mtg. Rev. (GNMA/FNMA/FHLMC Collateralized) | | 4.80 | | | 9/1/29 | | | | 470,414 | |
450,000 | | NM Mtg. Fin. Auth. Single Family Mtg. Rev. (GNMA/FNMA/FHLMC Collateralized) | | 5.35 | | | 9/1/30 | | | | 471,514 | |
930,000 | | NM Mtg. Fin. Auth. Single Family Mtg. Rev. (GNMA/FNMA/FHLMC Collateralized) | | 5.25 | | | 9/1/34 | | | | 968,781 | |
| | | | | | | | | | | | |
| | | | | | | | | | | 1,910,709 | |
| | | | | | | | | | | | |
See accompanying notes to financial statements.
| | |
|
SCHEDULE OF INVESTMENTS (Unaudited) | | |
September 30, 2011 | | |
Sit Tax-Free Income Fund (Continued)
| | | | | | | | | | | | |
Principal Amount ($) | | Name of Issuer | | Coupon Rate (%) | | Maturity Date | | | Fair Value ($) | |
| | | |
New York - 0.8% | | | | | | | | | | |
250,000 | | Albany Capital Resource Corp. Rev. (The College of Saint Rose) | | 5.63 | | | 7/1/31 | | | | 257,062 | |
250,000 | | Chautauqua County Capital Resource Corp. Rev. (Women’s Christian Assn. Proj.) | | 6.75 | | | 11/15/16 | | | | 260,265 | |
650,000 | | Ulster Co. Industrial Dev. Agy. Civic Facs. Rev. | | 5.25 | | | 9/15/16 | | | | 588,562 | |
| | | | | | | | | | | | |
| | | | | | | | | | | 1,105,889 | |
| | | | | | | | | | | | |
North Dakota - 0.3% | | | | | | | | | | |
430,000 | | North Dakota Hsg. Fin. Agy. Rev. (GO of Agency Insured) | | 4.75 | | | 7/1/30 | | | | 443,962 | |
| | | | | | | | | | | | |
Ohio -1.9% | | | | | | | | | | |
425,000 | | Buckeye Tobacco Settlement Finance Auth. Asset-Backed Sr. Rev. | | 5.13 | | | 6/1/24 | | | | 324,538 | |
250,000 | | Butler Co. Hospital Facs. Rev. (Kettering Health Network) | | 6.38 | | | 4/1/36 | | | | 268,702 | |
730,000 | | Cleveland-Cuyahoga Co. Port Auth. Dev. Rev. (St. Clarence Proj.) | | 6.00 | | | 5/1/21 | | | | 658,336 | |
719,900 | | Cuyahoga Co. Hsg. Mtg. Sr. Rev. (R H Myers Apts. Proj.) (GNMA Collateralized) | | 5.70 | | | 3/20/42 | | | | 763,879 | |
550,000 | | Lucas Co. Hospital Rev. (Promedica Health Care Proj.) | | 6.50 | | | 11/15/37 | | | | 626,620 | |
145,000 | | OH Hsg. Finance Agy. Residential Mtg. Rev. (GNMA/FNMA/FHLMC Collateralized) | | 5.45 | | | 9/1/33 | | | | 152,601 | |
| | | | | | | | | | | | |
| | | | | | | | | | | 2,794,676 | |
| | | | | | | | | | | | |
Oklahoma - 0.6% | | | | | | | | | | |
500,000 | | Citizen Potawatomi Nation Sr. Obligation Tax Rev. | | 6.50 | | | 9/1/16 | | | | 475,630 | |
400,000 | | Fort Sill Apache Tribe Economic Dev. Auth. | | 8.50 | | | 8/25/26 | | | | 399,944 | |
| | | | | | | | | | | | |
| | | | | | | | | | | 875,574 | |
| | | | | | | | | | | | |
Oregon - 0.7% | | | | | | | | | | |
165,000 | | OR G.O. (Veterans Welfare Proj.) | | 5.25 | | | 10/1/42 | | | | 165,155 | |
595,000 | | Western Generation Agy. Rev. (Wauna Cogeneration Proj.) | | 5.00 | | | 1/1/21 | | | | 541,325 | |
300,000 | | Western Generation Agy. Rev. (Wauna Cogeneration) | | 5.00 | | | 1/1/21 | | | | 273,528 | |
| | | | | | | | | | | | |
| | | | | | | | | | | 980,008 | |
| | | | | | | | | | | | |
Pennsylvania - 3.9% | | | | | | | | | | |
245,000 | | Allegheny Co. Industrial Dev. Auth. Charter School Rev. (Propel Charter-McKeesport) | | 5.90 | | | 8/15/26 | | | | 234,242 | |
490,000 | | Butler Co. General Authority Rev. (School District Proj.) (AGM GO of District) 1 | | 0.87 | | | 10/1/34 | | | | 295,999 | |
250,000 | | Central Bradford Progress Auth. Rev. (Guthrie Healthcare System) | | 5.50 | | | 12/1/31 | | | | 266,212 | |
250,000 | | Erie Co. Hospital Auth. Rev. (St. Vincent Health Center Proj.) | | 7.00 | | | 7/1/27 | | | | 255,150 | |
600,000 | | Geisinger Auth. Health System Rev. (Geisinger Health System Proj.) 1 | | 0.94 | | | 5/1/37 | | | | 397,524 | |
250,000 | | Lehigh Co. General Purpose Auth. Rev. (Saint Luke’s Bethlehem) 1 | | 1.21 | | | 8/15/42 | | | | 148,747 | |
500,000 | | Luzerne Co. G.O. (FSA Insured) | | 7.00 | | | 11/1/26 | | | | 578,415 | |
500,000 | | PA Housing Finance Agy. Single Family Mtg. Rev. | | 4.85 | | | 10/1/37 | | | | 500,755 | |
300,000 | | PA Hsg. Finance Agy. Rev. | | 5.00 | | | 10/1/25 | | | | 315,312 | |
500,000 | | PA Hsg. Finance Agy. Rev. (GO of Agency Insured) | | 4.63 | | | 10/1/29 | | | | 505,465 | |
500,000 | | PA Hsg. Finance Agy. Single Family Mtg. Rev. | | 4.75 | | | 10/1/28 | | | | 511,020 | |
240,000 | | PA Hsg. Finance Agy. Single Family Mtg. Rev. | | 4.75 | | | 10/1/39 | | | | 241,908 | |
500,000 | | PA Turnpike Commission Rev. Capital Appreciation 6 | | 5.13 | | | 12/1/35 | | | | 399,920 | |
500,000 | | PA Turnpike Commission Rev. Capital Appreciation 6 | | 5.73 | | | 12/1/38 | | | | 383,140 | |
500,000 | | PA Turnpike Commission Rev. Capital Appreciation (AGM Insured) 6 | | 6.25 | | | 6/1/33 | | | | 419,730 | |
160,000 | | Philadelphia Hospital & Higher Education Facs. Auth. Hospital Rev. (Temple Univ. Hospital) | | 6.63 | | | 11/15/23 | | | | 160,002 | |
| | | | | | | | | | | | |
| | | | | | | | | | | 5,613,541 | |
| | | | | | | | | | | | |
Puerto Rico - 1.1% | | | | | | | | | | |
500,000 | | Puerto Rico Electric Power Auth. Rev. Ref. 1 | | 0.85 | | | 7/1/25 | | | | 380,690 | |
500,000 | | Puerto Rico Highways & Transportation Auth. Rev. Ref. (AMBAC Insured) 1 | | 0.70 | | | 7/1/45 | | | | 378,125 | |
250,000 | | Puerto Rico Public Improvement G.O. (AGM Insured) | | 5.50 | | | 7/1/27 | | | | 265,282 | |
300,000 | | Puerto Rico Sales Tax Financing Corp. Rev. | | 6.00 | | | 8/1/39 | | | | 326,556 | |
500,000 | | Puerto Rico Sales Tax Financing Corp. Rev. 1 | | 1.10 | | | 8/1/57 | | | | 267,225 | |
| | | | | | | | | | | | |
| | | | | | | | | | | 1,617,878 | |
| | | | | | | | | | | | |
See accompanying notes to financial statements.
| | |
18 | | SIT MUTUAL FUNDS SEMI-ANNUAL REPORT |
| | |
|
SCHEDULE OF INVESTMENTS (Unaudited) | | |
September 30, 2011 Sit Tax-Free Income Fund (Continued) | | |
| | | | | | | | | | | | |
Principal Amount ($) | | Name of Issuer | | Coupon Rate (%) | | Maturity Date | | | Fair Value ($) | |
| | | |
Rhode Island - 0.5% | | | | | | | | | | |
145,000 | | RI Hsg. & Mtg. Finance Corp. Rev. (Home Ownership Opportunity Proj.) | | 5.63 | | | 10/1/38 | | | | 145,022 | |
500,000 | | RI Student Loan Auth. Sr. Rev. | | 5.75 | | | 12/1/27 | | | | 529,325 | |
| | | | | | | | | | | | |
| | | | | | | | | | | 674,347 | |
| | | | | | | | | | | | |
South Carolina - 0.4% | | | | | | | | | | |
425,000 | | SC Education Assistance Auth. Student Loan Rev. | | 5.10 | | | 10/1/29 | | | | 447,818 | |
250,000 | | SC Jobs Economic Dev. Auth. Health Care Facs. Rev. (Woodlands at Furman Proj.) 1, 2, 5 | | 5.15 | | | 11/15/42 | | | | 99,602 | |
| | | | | | | | | | | | |
| | | | | | | | | | | 547,420 | |
| | | | | | | | | | | | |
Tennessee - 1.1% | | | | | | | | | | |
495,000 | | Metro Govt. Nashville & Davidson Co. Health & Education Facs. Rev. (Prestige Proj.) 2, 5 | | 7.50 | | | 12/20/40 | | | | 287,620 | |
240,000 | | Metro Govt. Nashville & Davidson Co. Industrial Dev. Board Rev. (GNMA Collateralized) | | 6.63 | | | 3/20/36 | | | | 247,582 | |
1,850,000 | | Shelby Co. Health, Education & Hsg. Facs. Rev. (CME Memphis Apts. Proj.) 2, 5 | | 5.35 | | | 1/1/19 | | | | 212,269 | |
7,875,000 | | Shelby Co. Health, Education & Hsg. Facs. Rev. (CME Memphis Apts. Proj.) 2, 5 | | 5.55 | | | 1/1/29 | | | | 783,720 | |
1,630,000 | | Shelby Co. Health, Education & Hsg. Facs. Rev. (CME Memphis Apts. Proj.) 2, 5 | | 6.00 | | | 1/1/29 | | | | 16 | |
1,000,000 | | Shelby Co. Health, Education & Hsg. Facs. Rev. (Eastwood Park Apts. Proj.) 2, 5 | | 6.40 | | | 9/1/25 | | | | 48,440 | |
405,000 | | Shelby Co. Health, Education & Hsg. Facs. Rev. (Eastwood Park Apts. Proj.) 2, 5 | | 7.50 | | | 9/1/25 | | | | 4 | |
| | | | | | | | | | | | |
| | | | | | | | | | | 1,579,651 | |
| | | | | | | | | | | | |
Texas - 7.5% | | | | | | | | | | |
1,000,000 | | Arlington Higher Education Finance Corp., Education Rev. (Arlington Classics Academy) | | 7.00 | | | 8/15/28 | | | | 997,930 | |
85,000 | | Bexar Co. Hsg. Fin. Corp. Rev. (Dublin Kingswood & Waterford Apts.) | | 7.50 | | | 12/1/14 | | | | 79,200 | |
250,000 | | Bexar Co. Hsg. Fin. Corp. Rev. (Dymaxion & Marbach Park Apts. Proj.) (NATL-RE Insured) | | 6.10 | | | 8/1/30 | | | | 215,188 | |
540,000 | | Bexar Co. Hsg. Fin. Corp. Rev. (Honey Creek Apartments Proj.) 2, 5 | | 8.00 | | | 4/1/30 | | | | 237,649 | |
440,000 | | Bexar Co. Hsg. Fin. Corp. Rev. (Waterford Proj.) | | 6.50 | | | 12/1/21 | | | | 395,441 | |
1,883,000 | | Dallas Hsg. Finance Corp. Multifamily Mtg. Rev. (Towne Center Apts.) (GNMA Collateralized) | | 6.75 | | | 10/20/32 | | | | 1,923,315 | |
179,090 | | El Paso Hsg. Finance Corp. Single Family Mtg. Rev. (GNMA Collateralized) | | 6.18 | | | 4/1/33 | | | | 187,670 | |
1,327,160 | | Galveston Co. Municipal Utility District No. 52 | | 6.16 | | | 3/1/12 | | | | 1,062,392 | |
500,000 | | Harris Co. Cultural Education Facs. Finance Corp. Rev. (Space Center Houston Proj.) 4 | | 6.75 | | | 8/15/21 | | | | 525,455 | |
240,000 | | Houston Hotel Occupancy Rev. Ref. | | 5.25 | | | 9/1/29 | | | | 247,289 | |
410,000 | | La Vernia Higher Education Finance Corp. Rev. (Friends Life Proj.) | | 6.00 | | | 2/15/18 | | | | 408,253 | |
260,000 | | Rio Grande Valley Health Facs. Dev. Corp. Hospital Rev. (Valley Baptist) (NATL-RE Insured) | | 6.40 | | | 8/1/12 | | | | 260,406 | |
500,000 | | Tarrant Co. Cultural Education Facs. Fin. Rev. (C.C. Young Memorial Home Proj.) | | 6.50 | | | 2/15/14 | | | | 497,250 | |
250,000 | | Tarrant Co. Cultural Education Facs. Fin. Rev. (Mirador Proj.) | | 7.75 | | | 11/15/19 | | | | 254,782 | |
500,000 | | Tarrant Co. Cultural Education Facs. Fin. Rev. (Sr. Living Center Proj.) | | 6.50 | | | 11/15/14 | | | | 499,965 | |
250,000 | | Travis Co. Health Facs. Dev. Corp. Rev. (Westminster Manor) | | 6.25 | | | 11/1/16 | | | | 255,360 | |
500,000 | | TX Municipal Gas Acquisition & Supply Corp. I Sr. Lien Rev. 1 | | 1.68 | | | 12/15/26 | | | | 349,860 | |
300,000 | | TX Municipal Gas Acquisition & Supply Corp. II Rev. 1 | | 1.10 | | | 9/15/27 | | | | 226,923 | |
750,000 | | TX Private Activity Surface Transportation Corp. Rev. (LBJ Infrastructure) | | 7.50 | | | 6/30/33 | | | | 840,810 | |
250,000 | | TX Public Finance Auth. Charter School Finance Corp. Rev. (Cosmos Foundation, Inc.) | | 6.00 | | | 2/15/30 | | | | 256,258 | |
500,000 | | TX Public Finance Auth. Charter School Finance Corp. Rev. (Idea Public School) (ACA Insured) | | 5.00 | | | 8/15/30 | | | | 449,145 | |
800,000 | | TX Public Finance Auth. Charter School Finance Corp. Rev. (Kipp, Inc. Proj.) (ACA Insured) | | 5.00 | | | 2/15/28 | | | | 760,448 | |
| | | | | | | | | | | | |
| | | | | | | | | | | 10,930,989 | |
| | | | | | | | | | | | |
Utah - 1.5% | | | | | | | | | | |
250,000 | | Provo Charter School Rev. (Freedom Academy Foundation) | | 5.50 | | | 6/15/37 | | | | 193,345 | |
857,000 | | UT Assoc. Municipal Power System Rev. | | 5.00 | | | 5/1/27 | | | | 793,873 | |
300,000 | | UT Hsg. Corp. Single Family Mtg. Rev. | | 5.75 | | | 1/1/33 | | | | 316,935 | |
500,000 | | UT Hsg. Corp. Single Family Mtg. Rev. | | 4.60 | | | 7/1/34 | | | | 506,080 | |
300,000 | | UT Infrastructure Agy. Rev. (AGM Insured) | | 5.50 | | | 10/15/30 | | | | 323,514 | |
| | | | | | | | | | | | |
| | | | | | | | | | | 2,133,747 | |
| | | | | | | | | | | | |
See accompanying notes to financial statements.
| | |
|
SCHEDULE OF INVESTMENTS (Unaudited) | | |
September 30, 2011 Sit Tax-Free Income Fund (Continued) | | |
| | | | | | | | | | | | |
Principal Amount ($)/ Quantity | | Name of Issuer | | Coupon Rate (%) | | Maturity Date | | | Fair Value ($) | |
| | | |
Virginia - 1.8% | | | | | | | | | | |
500,000 | | Farms New Kent Community Dev. Auth. Special Assessment | | 5.13 | | | 3/1/36 | | | | 300,010 | |
1,500,000 | | VA Hsg. Dev. Auth. Commonwealth Mtg. Rev. (NATL-RE GO of Authority Insured) | | 5.38 | | | 7/1/36 | | | | 1,500,210 | |
250,000 | | VA Hsg. Dev. Auth. Rev. (GO of Authority Insured) | | 6.25 | | | 7/1/31 | | | | 265,788 | |
500,000 | | VA Hsg. Dev. Auth. Rev. (Rental Hsg. Proj.) | | 5.00 | | | 12/1/39 | | | | 512,155 | |
| | | | | | | | | | | | |
| | | | | | | | | | | 2,578,163 | |
| | | | | | | | | | | | |
Washington - 1.1% | | | | | | | | | | |
665,000 | | Kalispel Tribe Indians Priority District Rev. | | 6.20 | | | 1/1/16 | | | | 630,467 | |
500,000 | | WA Health Care Facs. Auth. Rev. (Swedish Health Services Proj.) | | 6.50 | | | 11/15/27 | | | | 530,090 | |
230,000 | | WA Hsg. Finance Commission Nonprofit Rev. (Skyline at First Hill Proj.) | | 5.10 | | | 1/1/13 | | | | 216,179 | |
300,000 | | WA Hsg. Finance Commission Single Family Mtg. Rev. | | 4.60 | | | 10/1/33 | | | | 301,101 | |
| | | | | | | | | | | | |
| | | | | | | | | | | 1,677,837 | |
| | | | | | | | | | | | |
Wisconsin - 2.4% | | | | | | | | | | |
250,000 | | WI General Fund Rev. Appropriation Rev. | | 6.00 | | | 5/1/27 | | | | 293,318 | |
960,000 | | WI Health & Education Facs. Auth. Rev. (Aurora Health Care Proj.) | | 5.60 | | | 2/15/29 | | | | 960,307 | |
250,000 | | WI Health & Education Facs. Auth. Rev. (Aurora Health Care Proj.) | | 6.40 | | | 4/15/33 | | | | 255,795 | |
495,000 | | WI Health & Education Facs. Auth. Rev. (Aurora Health Care Proj.) (ACA-CBI Insured) | | 5.63 | | | 2/15/29 | | | | 495,223 | |
300,000 | | WI Health & Education Facs. Auth. Rev. (Aurora Medical Group Proj.) (AGM Insured) | | 5.75 | | | 11/15/25 | | | | 300,438 | |
500,000 | | WI Health & Education Facs. Auth. Rev. (Beaver Dam Community Hospital, Inc.) | | 6.75 | | | 8/15/34 | | | | 503,505 | |
50,000 | | WI Health & Education Facs. Auth. Rev. (Sinai Samaritan Medical Center) (NATL-RE Insured) | | 5.88 | | | 8/15/26 | | | | 50,014 | |
200,000 | | WI Health & Education Facs. Auth. Rev. (Synergy Health, Inc. Proj.) | | 6.00 | | | 11/15/23 | | | | 207,972 | |
250,000 | | WI Health & Education Facs. Auth. Rev. (Synergy Health, Inc. Proj.) | | 6.00 | | | 11/15/32 | | | | 255,548 | |
200,000 | | WI Public Finance Auth. Rev. (Glenridge Palmer Ranch Proj.) | | 7.00 | | | 6/1/20 | | | | 200,746 | |
| | | | | | | | | | | | |
| | | | | | | | | | | 3,522,866 | |
| | | | | | | | | | | | |
Total Municipal Bonds (cost: $153,124,144) | | | | | | | | | 131,294,482 | |
| | | | | | | | | | | | |
Closed-End Mutual Funds - 7.2% | | | | | | | | | | |
20,800 | | AllianceBernstein National Municipal Income Fund, Inc. (AFB) | | | | | | | | | 295,360 | |
45,400 | | BlackRock Long-Term Municipal Advantage Trust (BTA) | | | | | | | | | 504,848 | |
33,800 | | BlackRock MuniHoldings Florida Insured Fund (MFL) | | | | | | | | | 472,186 | |
54,500 | | BlackRock MuniYield Florida Fund (MYF) | | | | | | | | | 768,995 | |
66,500 | | BlackRock MuniYield Insured Fund (MYI) | | | | | | | | | 879,130 | |
23,700 | | BlackRock MuniYield Michigan Insured Fund (MIY) | | | | | | | | | 340,095 | |
23,000 | | BlackRock MuniYield Michigan Insured Fund II (MYM) | | | | | | | | | 303,600 | |
208,600 | | DWS Municipal Income Trust (KTF) | | | | | | | | | 2,659,650 | |
12,390 | | Eaton Vance National Municipal Income Trust (FEV) | | | | | | | | | 150,910 | |
31,200 | | Invesco PA Value Muni Income Trust (VPV) | | | | | | | | | 424,632 | |
7,900 | | Invesco Quality Muni (IQT) | | | | | | | | | 104,122 | |
36,800 | | Invesco Van Kampen Advantage Muni Income Trust (VKI) | | | | | | | | | 447,120 | |
25,889 | | Invesco Van Kampen Trust for Investment Grade Municipals (VGM) | | | | | | | | | 372,542 | |
25,923 | | Managed Duration Investment Grade (MZF) | | | | | | | | | 368,366 | |
5,000 | | Nuveen Michigan Premium Income Municipal Fund (NMP) | | | | | | | | | 68,950 | |
21,500 | | Nuveen Premier Municipal Income Fund (NPF) | | | | | | | | | 301,000 | |
81,332 | | Nuveen Premium Income Fund (NPM) | | | | | | | | | 1,173,621 | |
77,011 | | Putnam Municipal Opportunities Trust (PMO) | | | | | | | | | 901,799 | |
| | | | | | | | | | | | |
Total Closed-End Mutual Funds (cost: $9,824,669) | | | | | | | | | 10,536,926 | |
| | | | | | | | | | | | |
See accompanying notes to financial statements.
| | |
20 | | SIT MUTUAL FUNDS SEMI-ANNUAL REPORT |
| | |
|
SCHEDULE OF INVESTMENTS (Unaudited) | | |
September 30, 2011 Sit Tax-Free Income Fund (Continued) | | |
| | | | | | | | | | |
Quantity | | Name of Issuer | | | | | | Fair Value ($) | |
| | | |
Short-Term Securities - 2.4% | | | | | | | | |
3,406,102 | | Dreyfus Tax-Exempt Cash Management Fund, 0.004% | | | | | | | | |
Total Short-Term Securities (cost: $3,406,102) | | | | | | | 3,406,102 | |
| | | | | | | | | | |
Total Investments in Securities - 99.8% (cost: $166,354,915) | | | | | | | 145,237,510 | |
Other Assets and Liabilities, net - 0.2% | | | | | | | 362,161 | |
| | | | | | | | | | |
Total Net Assets - 100.0% | | | | | | $ | 145,599,671 | |
| | | | | | | | | | |
1 | Variable rate security. Rate disclosed is as of September 30, 2011. |
2 | Securities considered illiquid by the Investment Adviser. The total value of such securities as of September 30, 2011 was $4,602,162 and represented 3.2% of net assets. |
4 | 144A Restricted Security. The total value of such securities as of September 30, 2011 was $2,573,848 and represented 1.8% of net assets. These securities been determined to be liquid by the Adviser in accordance with guidelines established by the Board of Directors. |
5 | The issuer is in default of certain debt covenants. Income is not being accrued. The total value of such securities as of September 30, 2011 was $4,602,162 and represented 3.2% of net assets. |
6 | Zero coupon security. Rate disclosed is the effective yield on purchase date. |
9 | Municipal Lease Security. The total value of such securities as of September 30, 2011 was $1,247,473 and represented 0.9% of net assets. These securities have been determined to be liquid by the Adviser in accordance with guidelines established by the Board of Directors. |
Numeric footnotes not disclosed are not applicable to this Schedule of Investments.
A summary of the inputs used to value the Fund’s net assets as of September 30, 2011 is as follows (see Note 2 - significant accounting policies in the notes to financial statements):
| | | | | | | | | | | | | | |
| | Investment in Securities | |
| | | | |
| | Level 1 Quoted Price ($) | | | Level 2 Other significant observable inputs ($) | | | Level 3 Significant unobservable inputs ($) | | Total ($) | |
| | | | |
Short-Term Securities | | | 3,406,102 | | | | — | | | — | | | 3,406,102 | |
Closed-End Mutual Funds | | | 10,536,926 | | | | — | | | — | | | 10,536,926 | |
Municipal Bonds | | | — | | | | 131,294,482 | | | — | | | 131,294,482 | |
| | | | |
Total: | | | 13,943,028 | | | | 131,294,482 | | | — | | | 145,237,510 | |
| | | | |
See accompanying notes to financial statements.
| | |
|
Sit Minnesota Tax-Free Income Fund |
| | |
| | |
OBJECTIVE & STRATEGY
The investment objective of the Minnesota Tax-Free Income Fund is to provide a high level of current income exempt from federal regular income tax and Minnesota regular personal income tax as is consistent with the preservation of capital.
During normal market conditions, the Fund invests 100% of its net assets in municipal securities that generate interest income that is exempt from federal regular income tax and Minnesota regular personal income tax. The Fund anticipates that substantially all of its distributions to its shareholders will be exempt as such. For investors subject to the alternative minimum tax (“AMT”), up to 20% of the Fund’s income may be alternative minimum taxable income.
The Sit Minnesota Tax-Free Income Fund provided a total return of +7.96% for the six-month period ended September 30, 2011, compared with a total return of +4.76% for the Barclays Capital 5-Year Municipal Bond Index. As of September 30, 2011, the Fund’s 30-day SEC yield was 4.35% and its 12-month distribution rate was 4.46%.
Tax-exempt municipal bond yields declined during the six-month period, resulting in solid returns for all sectors in which the fund invests, with all of these sectors earning higher returns than the Index. Among the sectors representing more than 5% of total Fund investments, the highest returns were earned by the Other Revenue and Education sectors. The most important factor helping returns was the Fund’s longer duration investments. Almost 80% of the Fund’s investments have durations of over five years, and the returns on those investments exceeded the returns of the shorter duration holdings by more than 4%. Yield differentials between lower-rated and higher-rated bonds also narrowed during the six month period, and bonds rated AA through BB earned returns that were more than 2% higher than the Fund’s AAA rated holdings.
The Fund remains positioned longer than the Barclays 5-Year Municipal Bond Index in terms of duration, with significant weightings in intermediate and longer-term bonds. Although the municipal yield curve did flatten during the period, it remains steep on a historical basis. We also believe that credit spreads for A rated bonds and below remain attractive when expressed as a percentage of comparable maturity U.S. Treasury bonds, especially for intermediate and longer duration bonds. Despite the difficult budget negotiations at the state level in 2011, state and local credits in Minnesota are generally financially sound. Our strategy continues to emphasize income, which we believe is the primary driver of return over the long run. Diversification remains a key factor in managing risk.
HYPOTHETICAL GROWTH OF $10,000
![LOGO](https://capedge.com/proxy/N-CSRS/0001193125-11-325489/g260481g63l89.jpg)
The chart above illustrates the total value of a hypothetical $10,000 investment in the Fund over the past 10 years (or for the life of the Fund if shorter) as compared to the performance of the Barclays Capital 5-Year Municipal Bond Index. Past performance does not guarantee future results. Returns include the reinvestment of distributions. The chart does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
1 The Barclays Capital 5-Year Municipal Bond Index is the 5 year (4-6) component of the Municipal Bond Index, an unmanaged, rules-based, market-value-weighted index for the long-term tax-exempt bond market. The index includes bonds with a minimum credit rating of BBB. The returns include the reinvestment of income and do not include any transaction costs, management fees or other costs. It is not possible to invest directly in an index.
We believe the Federal Reserve will keep short-term interest rates low at least though 2012, as unemployment is expected to remain at historically high levels. In this environment, we expect the municipal bond market to provide attractive returns with continued narrowing of yield spreads and the strongest relative performance from longer duration bonds. Longer-maturity and lower-rated bonds with stable credit outlooks continue to offer attractive yields.
Michael C. Brilley
Debra A. Sit, CFA
Paul J. Jungquist, CFA
Senior Portfolio Managers
| | |
22 | | SIT MUTUAL FUNDS SEMI-ANNUAL REPORT |
| | | | | | |
COMPARATIVE RATES OF RETURNS |
as of September 30, 2011 |
| | Sit Minnesota Tax-Free Income Fund | | Barclays Capital 5-Year Muni. Bond Index1 | | Lipper MN Muni. Bond Fund Index2 |
Six Month | | 7.96% | | 4.76% | | n/a |
One Year | | 4.76 | | 3.75 | | 3.68% |
Five Years | | 4.50 | | 5.55 | | 4.39 |
Ten Years | | 4.59 | | 4.68 | | 4.55 |
Since Inception (12/1/93) | | 5.02 | | 5.03 | | 4.78 |
Performance figures are historical and do not guarantee future results. Investment returns and principal value will vary, and you may have a gain or loss when you sell shares. Current performance may be lower or higher than the performance data quoted. Contact the Fund for performance data current to the most recent month-end. Returns include changes in share price as well as reinvestment of all dividends and capital gains. Returns do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. Management fees and administrative expenses are included in the Fund’s performance. Returns for periods greater than one year are compounded average annual rates of return.
1 The Barclays Capital 5-Year Municipal Bond Index is the 5 year (4-6) component of the Municipal Bond Index, an unmanaged, rules-based, market-value-weighted index made for the long-term tax-exempt bond market. The index includes bonds with a minimum credit rating of BBB. The returns include the reinvestment of income and do not include any transaction costs, management fees or other costs. It is not possible to invest directly in an index.
2 The Lipper returns are obtained from Lipper Analytical Services, Inc., a large independent evaluator of mutual funds.
| | | | |
FUND DIVERSIFICATION | |
| |
Hospital/Health Care | | | 20.5% | |
Multifamily Mortgage | | | 17.3% | |
Single Family Mortgage | | | 15.4% | |
Education/Student Loan | | | 12.1% | |
Other Revenue | | | 10.4% | |
Utility | | | 5.8% | |
Sectors less than 5.0% | | | 15.7% | |
Cash & Other Net Assets | | | 2.8% | |
Based on total net assets as of September 30, 2011. Subject to change.
PORTFOLIO SUMMARY
| | | | |
| | |
Net Asset Value 9/30/11: | | $10.21 Per Share | | |
Net Asset Value 3/31/11: | | $9.67 Per Share | | |
Total Net Assets: | | $305.5 Million | | |
30-day SEC Yield 3: | | 4.35% | | |
Tax Equivalent Yield 4: | | 7.26% | | |
12-month Distribution Rate 3: | | 4.46% | | |
Average Maturity: | | 16.1 Years | | |
Effective Duration 5: | | 5.3 Years | | |
3 The SEC Yield reflects the rate at which the Fund is earning income on its current portfolio of securities, while the distribution rate reflects the Fund’s past dividends paid to shareholders based on the net investment income distributed and the average NAV during the past 12 months. Accordingly, the Fund’s SEC yield and distribution rate may differ.
4 The tax-equivalent yield is based on an assumed federal tax rate of 35.0% and a Minnesota tax rate of 7.85%, for an effective combined tax rate of 40.1%.
5 Duration is a measure of estimated price sensitivity relative to changes in interest rates. Portfolios with longer durations are typically more sensitive to changes in interest rates. For example, if interest rates rise by 1%, the market value of a security with an effective duration of 5 years would decrease by 5%, with all other factors being constant. The correlation between duration and price sensitivity is greater for securities rated investment-grade than it is for securities rated below investment-grade. Duration estimates are based on assumptions by the Adviser and are subject to a number of limitations. Effective duration is calculated based on historical price changes of securities held by the Fund, and therefore is a more accurate estimate of price sensitivity provided interest rates remain within their historical range.
QUALITY RATINGS (% of Total Net Assets)
![LOGO](https://capedge.com/proxy/N-CSRS/0001193125-11-325489/g260481g54s45.jpg)
Lower of Moody’s, S&P, Fitch or Duff & Phelps ratings used.
| | |
Adviser’s Assessment of Non-Rated Securities: |
AAA | | 0.0% |
AA | | 2.7 |
A | | 3.3 |
BBB | | 13.8 |
BB | | 13.1 |
<BB | | 0.5 |
Total | | 33.4% |
| | |
|
SCHEDULE OF INVESTMENTS (Unaudited) September 30, 2011 | | |
Sit Minnesota Tax-Free Income Fund | | |
| | | | | | | | | | | | |
Principal Amount ($) | | Name of Issuer | | Coupon Rate (%) | | Maturity Date | | | Fair Value ($) | |
| | | |
Municipal Bonds - 96.4% | | | | | | | | | | |
Education/Student Loan - 12.1% | | | | | | | | | | |
1,070,000 | | Brooklyn Park Lease Rev. (Prairie Seeds Academy Proj.) | | 8.00 | | | 3/1/20 | | | | 1,168,151 | |
2,500,000 | | Duluth Hsg. & Redev. Auth. Lease Rev. (Public Schools Academy) | | 5.00 | | | 11/1/21 | | | | 2,387,325 | |
6,793,308 | | Intermediate School District 287 Lease Rev. | | 5.30 | | | 11/1/32 | | | | 6,888,075 | |
665,000 | | Minneapolis Educational Fac. Lease Rev. (Seed/Harvest Preparatory Proj.) (LOC-U.S. Bank) | | 5.13 | | | 1/1/16 | | | | 490,298 | |
875,000 | | Minneapolis Educational Fac. Lease Rev. (Seed/Harvest Preparatory Proj.) (LOC-U.S. Bank) | | 6.25 | | | 1/1/21 | | | | 626,902 | |
910,000 | | MN Higher Education Fac. Auth. Rev. (Bethel Univ.) | | 5.50 | | | 5/1/14 | | | | 938,219 | |
600,000 | | MN Higher Education Fac. Auth. Rev. (Bethel Univ.) | | 5.50 | | | 5/1/22 | | | | 611,220 | |
160,000 | | MN Higher Education Fac. Auth. Rev. (Bethel Univ.) | | 5.50 | | | 5/1/23 | | | | 162,216 | |
1,000,000 | | MN Higher Education Fac. Auth. Rev. (Bethel Univ.) | | 5.50 | | | 5/1/37 | | | | 978,450 | |
1,973,337 | | MN Higher Education Fac. Auth. Rev. (College of St. Benedict) | | 4.49 | | | 10/1/16 | | | | 2,008,462 | |
1,789,936 | | MN Higher Education Fac. Auth. Rev. (College of St. Catherine) | | 4.75 | | | 4/26/27 | | | | 1,766,756 | |
500,000 | | MN Higher Education Fac. Auth. Rev. (Hamline Univ.) | | 5.00 | | | 10/1/29 | | | | 510,905 | |
750,000 | | MN Higher Education Fac. Auth. Rev. (Hamline Univ.) | | 6.00 | | | 10/1/32 | | | | 818,340 | |
1,000,000 | | MN Higher Education Fac. Auth. Rev. (Hamline Univ.) | | 6.00 | | | 10/1/40 | | | | 1,066,600 | |
750,000 | | MN Higher Education Fac. Auth. Rev. (Macalester College-Seven-I) | | 5.00 | | | 6/1/35 | | | | 815,910 | |
1,400,000 | | MN Higher Education Fac. Auth. Rev. (St. Scholastica College) | | 5.00 | | | 12/1/27 | | | | 1,417,696 | |
1,800,000 | | MN Higher Education Fac. Auth. Rev. (St. Scholastica College) | | 6.30 | | | 12/1/40 | | | | 1,938,204 | |
250,000 | | MN Higher Education Fac. Auth. Rev. (St. Scholastica College-H) | | 5.13 | | | 12/1/40 | | | | 253,732 | |
500,000 | | MN Higher Education Fac. Auth. Rev. (St. Scholastica College-H) | | 5.25 | | | 12/1/35 | | | | 514,345 | |
1,250,000 | | MN Higher Education Fac. Auth. Rev. (Univ. of St. Thomas) | | 6.00 | | | 10/1/25 | | | | 1,362,925 | |
194,083 | | MN Higher Education Fac. Auth. Rev. Lease Rev. (Concordia Univ.) | | 5.25 | | | 4/25/14 | | | | 196,636 | |
2,500,000 | | MN Office of Higher Education Rev. (Suppl. Student Loan Prog.) | | 5.00 | | | 11/1/29 | | | | 2,630,375 | |
728,401 | | Olmsted Co. Hsg. & Redev. Auth. (Schaeffer Academy Proj.) | | 4.98 | | | 4/25/27 | | | | 574,883 | |
340,000 | | Pine City Lease Rev. (Lakes International Language Academy Proj.) | | 5.75 | | | 5/1/16 | | | | 344,070 | |
300,000 | | Pine City Lease Rev. (Lakes International Language Academy Proj.) | | 6.00 | | | 5/1/26 | | | | 276,171 | |
320,000 | | Ramsey Lease Rev. (Pact Charter School Proj.) | | 5.65 | | | 12/1/13 | | | | 325,597 | |
1,650,000 | | Ramsey Lease Rev. (Pact Charter School Proj.) | | 6.50 | | | 12/1/22 | | | | 1,647,212 | |
685,000 | | St. Paul Hsg. & Redev. Auth. Lease Rev. (Community of Peace Academy Proj.) | | 4.35 | | | 12/1/12 | | | | 692,843 | |
600,000 | | St. Paul Hsg. & Redev. Auth. Lease Rev. (Community of Peace Academy Proj.) | | 4.35 | | | 12/1/14 | | | | 605,274 | |
1,500,000 | | St. Paul Hsg. & Redev. Auth. Lease Rev. (Community of Peace Academy Proj.) | | 5.00 | | | 12/1/18 | | | | 1,491,870 | |
605,000 | | St. Paul Hsg. & Redev. Auth. Lease Rev. (Hmong Academy Proj.) | | 5.50 | | | 9/1/18 | | | | 595,078 | |
255,000 | | St. Paul Hsg. & Redev. Auth. Lease Rev. (New Spirit Charter School Proj.) | | 6.50 | | | 12/1/12 | | | | 260,903 | |
500,000 | | St. Paul Hsg. & Redev. Auth. Rev. Ref. (St. Paul Academy & Summit School) | | 5.00 | | | 10/1/24 | | | | 538,605 | |
| | | | | | | | | | | | |
| | | | | | | | | | | 36,904,248 | |
| | | | | | | | | | | | |
General Obligation - 2.5% | | | | | | | | | | |
1,000,000 | | Bemidji Sales Tax G.O. | | 5.00 | | | 2/1/34 | | | | 1,103,450 | |
1,350,000 | | Bemidji Sales Tax G.O. | | 6.00 | | | 2/1/41 | | | | 1,622,714 | |
650,000 | | Dakota Co. Community Dev. Agy. Sr. Hsg. Facs. G.O. | | 5.00 | | | 1/1/26 | | | | 703,190 | |
500,000 | | Northern Mariana Islands Commonwealth G.O. 11 | | 5.00 | | | 10/1/22 | | | | 417,580 | |
1,000,000 | | Puerto Rico Public Improvement G.O. 11 | | 5.75 | | | 7/1/36 | | | | 1,030,760 | |
1,000,000 | | Puerto Rico Public Improvement G.O. 11 | | 6.00 | | | 7/1/28 | | | | 1,072,360 | |
1,500,000 | | Puerto Rico Public Improvement G.O. 11 | | 6.50 | | | 7/1/40 | | | | 1,639,140 | |
100,000 | | St. Paul Street Improvement Special Assessment G.O. | | 5.30 | | | 3/1/12 | | | | 100,409 | |
| | | | | | | | | | | | |
| | | | | | | | | | | 7,689,603 | |
| | | | | | | | | | | | |
Hospital/Health Care - 20.5% | | | | | | | | | | |
1,500,000 | | Bemidji Health Care Facs. Rev. (North Country Health Services Proj.) (Radian Insured) | | 5.00 | | | 9/1/24 | | | | 1,505,595 | |
290,000 | | Bemidji Health Care Facs. Rev. (North Country Health Services Proj.) (Radian Insured) | | 5.00 | | | 9/1/31 | | | | 275,599 | |
4,025,000 | | Breckenridge Rev. (Catholic Health Initiatives Proj.) | | 5.00 | | | 5/1/30 | | | | 4,106,949 | |
See accompanying notes to financial statements.
| | |
24 | | SIT MUTUAL FUNDS SEMI-ANNUAL REPORT |
| | |
|
SCHEDULE OF INVESTMENTS (Unaudited) | | |
September 30, 2011 Sit Minnesota Tax-Free Income Fund (Continued) | | |
| | | | | | | | | | | | |
Principal Amount ($) | | Name of Issuer | | Coupon Rate (%) | | Maturity Date | | | Fair Value ($) | |
| | | | |
400,000 | | Carlton Health Care & Hsg. Fac. Rev. Ref. (Faith Care Center Proj.) | | 5.20 | | | 4/1/16 | | | | 395,584 | |
365,000 | | Cold Spring Health Care Facs. Rev. (Assumption Home, Inc. Proj.) | | 7.25 | | | 3/1/23 | | | | 379,162 | |
1,000,000 | | Cuyuna Range Hosp. Dist. Health Facs. Rev. | | 5.20 | | | 6/1/25 | | | | 983,610 | |
400,000 | | Detroit Lakes Hsg. & Health Facs. Rev. Ref. (CDL Homes Proj.) | | 2.14 | | | 8/1/34 | | | | 400,308 | |
1,500,000 | | Detroit Lakes Hsg. Rev. Ref. (Mankato Lutheran Proj.) | | 2.39 | | | 8/1/34 | | | | 1,437,390 | |
1,500,000 | | Douglas Co. Gross Health Care Facs. Rev. (Douglas Co. Hospital Proj.) | | 6.00 | | | 7/1/28 | | | | 1,561,395 | |
70,000 | | Duluth Economic Dev. Auth. Health Care Fac. Rev. (St. Luke’s Hospital Proj.) | | 6.00 | | | 6/15/12 | | | | 70,233 | |
904,629 | | Duluth Hsg. & Redev. Auth. Sr. Hsg. (Lakeshore Proj.) | | 4.00 | | | 8/20/34 | | | | 889,386 | |
741,909 | | Duluth Sr. Hsg. Loan Participation (Lakeshore Proj.) 1 | | 4.50 | | | 12/20/35 | | | | 729,883 | |
310,000 | | Elk River Rev. (Care Choice Member Proj.) | | 5.60 | | | 8/1/13 | | | | 309,919 | |
1,925,000 | | Glencoe Health Care Fac. Rev. (Glencoe Regional Health Services Proj.) | | 5.00 | | | 4/1/25 | | | | 1,929,774 | |
125,000 | | Hastings Health Care Fac. Rev. (Augustana Home of Hastings Proj.) | | 5.30 | | | 11/1/11 | | | | 124,796 | |
135,000 | | Hastings Health Care Fac. Rev. (Augustana Home of Hastings Proj.) | | 5.40 | | | 11/1/12 | | | | 134,361 | |
970,000 | | Hastings Health Care Fac. Rev. (Regina Medical Center) (ACA Insured) | | 5.25 | | | 9/15/18 | | | | 970,572 | |
705,000 | | Hastings Health Care Fac. Rev. (Regina Medical Center) (ACA Insured) | | 5.30 | | | 9/15/28 | | | | 660,028 | |
140,000 | | Inver Grove Heights Nursing Home Rev. Ref. (Presbyterian Homes Care) | | 5.00 | | | 10/1/11 | | | | 140,004 | |
780,000 | | Maple Grove Health Care Fac. Rev. (North Memorial Health Care Proj.) | | 5.00 | | | 9/1/29 | | | | 756,616 | |
1,200,000 | | Maple Grove Health Care System Rev. (Maple Grove Hospital Corp.) | | 5.25 | | | 5/1/25 | | | | 1,212,312 | |
1,500,000 | | Maple Grove Health Care System Rev. (Maple Grove Hospital Corp.) | | 5.25 | | | 5/1/28 | | | | 1,518,735 | |
600,000 | | Minneapolis & St. Paul Hsg. & Redev. Auth. Rev. (Health Partners) | | 5.88 | | | 12/1/29 | | | | 613,716 | |
255,000 | | Minneapolis Health Care Fac. Rev. (Augustana Chapel View Homes Proj.) | | 5.00 | | | 6/1/15 | | | | 253,549 | |
270,000 | | Minneapolis Health Care Fac. Rev. (Augustana Chapel View Homes Proj.) | | 5.10 | | | 6/1/16 | | | | 267,991 | |
1,470,000 | | Minneapolis Health Care Fac. Rev. (Jones-Harrison Residence Proj.) | | 5.40 | | | 10/1/25 | | | | 1,377,184 | |
300,000 | | Minneapolis Health Care Sys. Rev. (Fairview Health Svcs.) (AMBAC Insured) | | 5.00 | | | 11/15/30 | | | | 303,324 | |
1,000,000 | | Minneapolis Hsg. & Health Care Facs. Rev. Ref. (Providence Proj.) | | 5.50 | | | 10/1/14 | | | | 1,013,780 | |
200,000 | | Minneapolis Hsg. Fac. Rev. (Augustana Chapel View Homes Proj.) | | 5.50 | | | 6/1/27 | | | | 179,960 | |
500,000 | | Minneapolis Hsg. Fac. Rev. (Augustana Chapel View Homes Proj.) | | 5.75 | | | 1/1/19 | | | | 499,510 | |
530,000 | | Minneapolis Hsg. Fac. Rev. (Augustana Chapel View Homes Proj.) | | 5.80 | | | 1/1/24 | | | | 513,342 | |
180,000 | | Minneapolis Pooled Rev. (Care Choice Member Proj.) | | 5.75 | | | 4/1/19 | | | | 168,883 | |
1,330,000 | | MN Agricultural & Economic Dev. Board Rev. (Evangelical Lutheran Good Samaritan Society Proj.) | | 6.63 | | | 8/1/25 | | | | 1,345,228 | |
10,000 | | MN Agricultural & Economic Dev. Board Rev. (Fairview Health Care System Proj.) | | 6.38 | | | 11/15/22 | | | | 10,026 | |
130,000 | | MN Agricultural & Economic Dev. Board Rev. (Fairview Health Care System Proj.) | | 6.38 | | | 11/15/29 | | | | 130,186 | |
150,000 | | New Hope Health Care Facs. Rev. (MN Masonic Home North Ridge Proj.) | | 5.60 | | | 3/1/12 | | | | 149,824 | |
920,000 | | New Hope Health Care Facs. Rev. (MN Masonic Home North Ridge Proj.) | | 5.88 | | | 3/1/29 | | | | 837,936 | |
1,175,000 | | New Hope Health Care Facs. Rev. (MN Masonic Home North Ridge Proj.) | | 5.90 | | | 3/1/19 | | | | 1,129,010 | |
500,000 | | Rochester Health Care Facs. Rev. (Olmsted Medical Center Proj.) | | 5.13 | | | 7/1/20 | | | | 530,730 | |
1,500,000 | | Rochester Health Care Facs. Rev. (Olmsted Medical Center Proj.) | | 5.88 | | | 7/1/30 | | | | 1,539,570 | |
1,020,000 | | Sartell Health Care & Hsg. Facs. Rev. (Foundation for Healthcare Proj.) | | 6.63 | | | 9/1/29 | | | | 1,019,888 | |
1,000,000 | | Sauk Rapids Health Care & Hsg. Facs. Rev. (Good Shepherd Lutheran Home Proj.) | | 6.75 | | | 1/1/24 | | | | 1,019,040 | |
1,000,000 | | Sauk Rapids Health Care & Hsg. Facs. Rev. (Good Shepherd Lutheran Home Proj.) | | 7.25 | | | 1/1/29 | | | | 1,026,220 | |
125,000 | | Shakopee Health Care Facs. Rev. (St. Francis Regional Medical Center Proj.) | | 5.10 | | | 9/1/25 | | | | 126,334 | |
3,475,000 | | Shakopee Health Care Facs. Rev. (St. Francis Regional Medical Center Proj.) | | 5.25 | | | 9/1/34 | | | | 3,482,298 | |
4,000,000 | | St. Cloud Health Care Rev. (CentraCare Health System) | | 5.00 | | | 5/1/25 | | | | 4,105,880 | |
2,000,000 | | St. Louis Park Health Care Facs. Rev. (Park Nicollet Health Proj.) | | 5.50 | | | 7/1/29 | | | | 2,050,540 | |
160,000 | | St. Paul Hsg. & Redev. Auth. Health Care Rev. (Gillette Childrens Hospital Proj.) | | 5.00 | | | 2/1/15 | | | | 167,133 | |
350,000 | | St. Paul Hsg. & Redev. Auth. Health Care Rev. (Gillette Childrens Specialty Proj.) | | 5.00 | | | 2/1/20 | | | | 361,200 | |
500,000 | | St. Paul Hsg. & Redev. Auth. Health Care Rev. (Gillette Childrens Specialty Proj.) | | 5.00 | | | 2/1/21 | | | | 514,000 | |
1,000,000 | | St. Paul Hsg. & Redev. Auth. Health Care Rev. (HealthPartners Oblig. Group Proj.) | | 5.25 | | | 5/15/26 | | | | 1,010,670 | |
4,200,000 | | St. Paul Hsg. & Redev. Auth. Health Care Rev. (HealthPartners Oblig. Group Proj.) | | 5.25 | | | 5/15/36 | | | | 4,097,730 | |
70,000 | | St. Paul Hsg. & Redev. Auth. Health Care Rev. (Model Cities Health Center) | | 6.50 | | | 11/1/11 | | | | 69,990 | |
1,365,000 | | St. Paul Hsg. & Redev. Auth. Health Care Rev. (Regions Hospital Proj.) | | 5.20 | | | 5/15/13 | | | | 1,368,140 | |
2,120,000 | | St. Paul Hsg. & Redev. Auth. Health Care Rev. (Regions Hospital Proj.) | | 5.25 | | | 5/15/18 | | | | 2,122,904 | |
See accompanying notes to financial statements.
| | |
|
SCHEDULE OF INVESTMENTS (Unaudited) | | |
September 30, 2011 Sit Minnesota Tax-Free Income Fund (Continued) | | |
| | | | | | | | | | | | |
Principal Amount ($) | | Name of Issuer | | Coupon Rate (%) | | Maturity Date | | | Fair Value ($) | |
| | | | |
2,448,783 | | St. Paul Hsg. & Redev. Auth. Rev. (Nursing Home NTS-Episcopal) | | 5.63 | | | 10/1/33 | | | | 2,282,389 | |
50,000 | | St. Paul Hsg. & Redev. Auth. Rev. (Regions Hospital Proj.) | | 5.30 | | | 5/15/28 | | | | 50,002 | |
1,210,000 | | St. Paul Hsg. & Redev. Auth. Rev. Ref. (Franciscan Health Community) | | 7.00 | | | 7/1/21 | | | | 1,210,448 | |
2,500,000 | | Stillwater Health Care Rev. (Health System Obligation Proj.) | | 5.00 | | | 6/1/25 | | | | 2,528,125 | |
920,000 | | Stillwater Health Care Rev. (Health System Obligation Proj.) | | 5.00 | | | 6/1/35 | | | | 893,826 | |
525,000 | | West St. Paul Health Care (Walker Thompson Hill) | | 6.75 | | | 9/1/31 | | | | 529,279 | |
1,300,000 | | Winsted Health Care Rev. (St. Mary’s Care Center Proj.) | | 6.00 | | | 9/1/25 | | | | 1,286,038 | |
| | | | | | | | | | | | |
| | | | | | | | | | | 62,678,034 | |
| | | | | | | | | | | | |
Industrial/Pollution Control - 1.9% | | | | | | | | | | |
2,250,000 | | Moorhead Rev. (Amer. Crystal Sugar Co. Recovery Zone Fac.) | | 5.65 | | | 6/1/27 | | | | 2,342,070 | |
505,000 | | Owatonna Industrial Dev. Rev. (Slidell, Inc. Proj.) 2, 5, 8 | | 8.48 | | | 5/1/17 | | | | 101,000 | |
2,195,000 | | St. Paul Port Auth. Solid Waste Disposal Rev. (Ecullet Proj.) | | 6.25 | | | 11/1/15 | | | | 2,273,032 | |
980,000 | | White Earth Band of Chippewa Indians Rev. (ACA Insured) | | 7.00 | | | 12/1/11 | | | | 984,851 | |
| | | | | | | | | | | | |
| | | | | | | | | | | 5,700,953 | |
| | | | | | | | | | | | |
Insured - 4.1% | | | | | | | | | | |
500,000 | | Minneapolis & St. Paul Hsg. & Redev. Rev. (Children’s Hospital) (AGM Insured) | | 5.00 | | | 8/15/34 | | | | 517,360 | |
2,010,000 | | Minneapolis & St. Paul Metro Airport Commission Rev. Ref. (NATL-RE FGIC Insured) | | 5.00 | | | 1/1/22 | | | | 2,098,058 | |
1,750,000 | | Minneapolis & St. Paul Metro Airport Commission Rev. Ref. (NATL-RE FGIC Insured) | | 5.00 | | | 1/1/25 | | | | 1,832,058 | |
1,000,000 | | Minneapolis Health Care Facs. Rev. (Fairview Health Svcs.) (Assured Guaranty) | | 6.50 | | | 11/15/38 | | | | 1,132,410 | |
350,000 | | Plymouth Health Facs. Rev. (West Health Proj.) (AGM Insured) | | 6.13 | | | 6/1/24 | | | | 350,609 | |
1,000,000 | | Puerto Rico Public Improvement G.O. (AGM Insured) 11 | | 5.13 | | | 7/1/30 | | | | 1,000,020 | |
1,000,000 | | Puerto Rico Public Improvement G.O. (AGM Insured) 11 | | 5.25 | | | 7/1/20 | | | | 1,087,630 | |
1,000,000 | | Puerto Rico Public Improvement G.O. (Assured Guaranty) 1, 11 | | 2.19 | | | 7/1/20 | | | | 907,560 | |
1,000,000 | | St. Cloud Health Care Rev. (CentraCare Health System Proj.) (Assured Guaranty) | | 5.50 | | | 5/1/39 | | | | 1,056,850 | |
2,010,000 | | St. Paul Hsg. & Redev. Sales Tax Rev. Ref. (Civic Center) (AGM Insured) | | 7.10 | | | 11/1/23 | | | | 2,430,251 | |
| | | | | | | | | | | | |
| | | | | | | | | | | 12,412,806 | |
| | | | | | | | | | | | |
Multifamily Mortgage - 17.3% | | | | | | | | | | |
785,000 | | Anoka Co. Hsg. & Redev. Rev. (Recovery Zone Fac.-Park River Estates) | | 6.50 | | | 11/1/25 | | | | 799,114 | |
250,000 | | Bloomington Hsg. Rev. Sr. (Gideon Pond Commons LLC) | | 5.25 | | | 6/1/21 | | | | 256,855 | |
300,000 | | Bloomington Hsg. Rev. Sr. (Gideon Pond Commons LLC) | | 5.25 | | | 12/1/21 | | | | 307,824 | |
375,000 | | Bloomington Hsg. Rev. Sr. (Gideon Pond Commons LLC) | | 5.38 | | | 6/1/22 | | | | 387,079 | |
385,000 | | Bloomington Hsg. Rev. Sr. (Gideon Pond Commons LLC) | | 5.38 | | | 12/1/22 | | | | 396,777 | |
1,000,000 | | Bloomington Hsg. Rev. Sr. (Gideon Pond Commons LLC) | | 6.00 | | | 12/1/30 | | | | 1,026,300 | |
1,000,000 | | Champlin Multifamily Hsg. Rev. (Champlin Drive Apts.) | | 6.00 | | | 1/1/27 | | | | 1,017,450 | |
305,000 | | Chaska Multifamily Hsg. Rev. (West Suburban Hsg. Partners Proj.) 8 | | 5.38 | | | 9/1/14 | | | | 301,547 | |
500,000 | | Cloquet Hsg. Fac. Rev. Ref. (HADC Cloquet LLC Proj.) | | 5.50 | | | 8/1/25 | | | | 445,965 | |
250,000 | | Columbia Heights Multifamily & Health Care Fac. Rev. (Crest View Corp Proj.) | | 5.30 | | | 7/1/17 | | | | 230,905 | |
700,000 | | Coon Rapids Multifamily Hsg. Rev. Ref. (Margaret Place Apartments) | | 6.50 | | | 5/1/25 | | | | 700,196 | |
545,000 | | Coon Rapids Senior Hsg. Rev. Ref. (Epiphany Sr. Citizens Hsg. Corp. Proj.) | | 5.80 | | | 11/1/15 | | | | 536,242 | |
2,565,000 | | Cottage Grove Sr. Hsg. Rev. (PHS, Inc. Proj.) | | 5.00 | | | 12/1/31 | | | | 2,250,711 | |
470,000 | | Eden Prairie Multifamily Hsg. Rev. Ref. (Rolling Hills Proj.) (GNMA Collateralized) | | 6.00 | | | 8/20/21 | | | | 494,228 | |
675,000 | | Eden Prairie Multifamily Hsg. Rev. Ref. (Rolling Hills Proj.) (GNMA Collateralized) | | 6.15 | | | 8/20/31 | | | | 709,391 | |
1,635,000 | | Eden Prairie Multifamily Hsg. Rev. Ref. (Rolling Hills Proj.) (GNMA Collateralized) | | 6.20 | | | 2/20/43 | | | | 1,718,222 | |
50,000 | | Eveleth Multifamily Hsg. Rev. Sr. (Manor House Woodland Proj.) | | 5.00 | | | 10/1/11 | | | | 49,998 | |
155,000 | | Eveleth Multifamily Hsg. Rev. Sr. (Manor House Woodland Proj.) | | 5.10 | | | 10/1/12 | | | | 153,514 | |
165,000 | | Eveleth Multifamily Hsg. Rev. Sr. (Manor House Woodland Proj.) | | 5.15 | | | 10/1/13 | | | | 161,481 | |
300,000 | | Fairmont Hsg. Fac. Rev. (Goldfinch Estates-GEAC Proj.) | | 5.75 | | | 10/1/17 | | | | 291,783 | |
290,000 | | Fairmont Hsg. Fac. Rev. (Goldfinch Estates-GEAC Proj.) | | 6.00 | | | 10/1/21 | | | | 276,184 | |
140,000 | | Fairmont Hsg. Fac. Rev. (Homestead-GEAC Proj.) | | 6.63 | | | 10/1/11 | | | | 140,001 | |
295,000 | | Fairmont Hsg. Fac. Rev. (Homestead-GEAC Proj.) | | 6.88 | | | 10/1/14 | | | | 295,472 | |
See accompanying notes to financial statements.
| | |
26 | | SIT MUTUAL FUNDS SEMI-ANNUAL REPORT |
| | |
|
SCHEDULE OF INVESTMENTS (Unaudited) |
September 30, 2011 Sit Minnesota Tax-Free Income Fund (Continued) |
| | | | | | | | | | | | |
Principal Amount ($) | | Name of Issuer | | Coupon Rate (%) | | Maturity Date | | | Fair Value ($) | |
| | | | |
695,000 | | Golden Valley Rev. (Covenant Retirement Communities Proj.) | | 5.50 | | | 12/1/25 | | | | 689,141 | |
2,000,000 | | Golden Valley Rev. (Covenant Retirement Communities Proj.) | | 5.50 | | | 12/1/29 | | | | 1,922,140 | |
1,660,000 | | Grand Rapids Hsg. & Redev. Auth. (Lakeshore Place & Forest Park West Apartments Proj.) | | 5.30 | | | 10/1/29 | | | | 1,576,900 | |
245,000 | | Inver Grove Heights Nursing Home Rev. Ref. (Presbyterian Homes) | | 5.50 | | | 10/1/33 | | | | 230,143 | |
1,295,000 | | Lake Crystal Hsg. Rev. (Ecumen-Second Century Proj.) | | 5.63 | | | 9/1/28 | | | | 1,312,314 | |
1,400,000 | | Maplewood Multifamily Hsg. Rev. (Park Edge Apartments Proj.) 8 | | 6.50 | | | 5/1/29 | | | | 1,309,616 | |
2,765,000 | | Minneapolis & St. Paul Hsg. & Redev. Auth. Multifamily Hsg. Rev. (GNMA Collateralized) 8 | | 4.75 | | | 1/20/42 | | | | 2,670,050 | |
4,000,000 | | Minneapolis Mulitfamily Hsg. Rev. (Riverside Plaza) | | 6.00 | | | 11/1/13 | | | | 3,958,400 | |
695,000 | | Minneapolis Multifamily Hsg. Rev. (Blaisdell Apartments Proj.) 8 | | 5.10 | | | 4/1/17 | | | | 665,859 | |
295,000 | | Minneapolis Multifamily Hsg. Rev. (Garr Scott Loft Proj.) (LOC U.S. Bank) 8 | | 5.95 | | | 5/1/30 | | | | 295,484 | |
280,000 | | Minnetonka Multifamily Hsg. Rev. Ref. (Archer Heights Apartments Proj.) (GNMA Collateralized) 8 | | 5.10 | | | 7/20/13 | | | | 280,563 | |
975,000 | | Minnetonka Multifamily Hsg. Rev. Ref. (Archer Heights Apartments Proj.) (GNMA Collateralized) 8 | | 5.20 | | | 1/20/18 | | | | 975,956 | |
1,750,000 | | MN Hsg. Fin. Agy. Rental Hsg. 8 | | 5.10 | | | 8/1/47 | | | | 1,729,700 | |
85,000 | | MN Hsg. Fin. Agy. Rental Hsg. (GO of AGY. Insured) 8 | | 4.88 | | | 8/1/24 | | | | 85,357 | |
250,000 | | MN Hsg. Fin. Agy. Rental Hsg. (GO of AGY. Insured) | | 5.05 | | | 8/1/31 | | | | 261,140 | |
2,560,000 | | MN Hsg. Fin. Agy. Rental Hsg. (GO of AGY. Insured) | | 5.25 | | | 8/1/40 | | | | 2,640,128 | |
1,660,000 | | MN Hsg. Fin. Agy. Rental Hsg. (GO of AGY. Insured) | | 5.45 | | | 8/1/41 | | | | 1,750,885 | |
1,260,000 | | MN Hsg. Fin. Agy. Residential Hsg. Rev. (GO of AGY. Insured) 8 | | 5.00 | | | 7/1/21 | | | | 1,297,813 | |
500,000 | | North Oaks Sr. Hsg. Rev. (Presbyterian Homes North Oaks Proj.) | | 5.25 | | | 10/1/13 | | | | 501,880 | |
1,565,000 | | North Oaks Sr. Hsg. Rev. (Presbyterian Homes North Oaks Proj.) | | 5.63 | | | 10/1/17 | | | | 1,582,841 | |
650,000 | | North Oaks Sr. Hsg. Rev. (Presbyterian Homes North Oaks Proj.) | | 5.75 | | | 10/1/22 | | | | 656,890 | |
1,000,000 | | North Oaks Sr. Hsg. Rev. (Presbyterian Homes North Oaks Proj.) | | 6.00 | | | 10/1/33 | | | | 1,000,000 | |
90,000 | | Norwood Young America Economic Dev. Auth. Govt. Rev. (Harbor at Peace Village) | | 5.35 | | | 8/1/15 | | | | 90,836 | |
200,000 | | Norwood Young America Economic Dev. Auth. Govt. Rev. (Harbor at Peace Village) | | 5.63 | | | 8/1/20 | | | | 198,270 | |
550,000 | | Norwood Young America Economic Dev. Auth. Govt. Rev. (Harbor at Peace Village) | | 5.75 | | | 8/1/25 | | | | 528,165 | |
250,000 | | Norwood Young America Economic Dev. Auth. Govt. Rev. (Harbor at Peace Village) | | 6.00 | | | 8/1/31 | | | | 239,640 | |
1,000,000 | | Oak Park Heights Hsg. Rev. (Oakgreen Commons Proj.) | | 6.00 | | | 8/1/25 | | | | 951,220 | |
160,000 | | Oakdale Multifamily Sr. Hsg. Rev. Ref. (Oak Meadows Proj.) | | 5.00 | | | 4/1/12 | | | | 160,275 | |
500,000 | | Richfield Sr. Hsg. Rev. Ref. (Richfield Sr. Hsg., Inc. Proj.) | | 5.00 | | | 12/1/15 | | | | 486,770 | |
430,000 | | Rochester Health Care & Hsg. Rev. (Samaritan Bethany, Inc. Proj.) | | 5.25 | | | 12/1/17 | | | | 430,194 | |
455,000 | | Rochester Health Care & Hsg. Rev. (Samaritan Bethany, Inc. Proj.) | | 5.50 | | | 12/1/18 | | | | 455,496 | |
475,000 | | Rochester Health Care & Hsg. Rev. (Samaritan Bethany, Inc. Proj.) | | 5.75 | | | 12/1/19 | | | | 475,570 | |
250,000 | | Rochester Health Care & Hsg. Rev. (Samaritan Bethany, Inc. Proj.) (Gty. Agmt. Samaritan Bethany) | | 7.38 | | | 12/1/41 | | | | 256,818 | |
240,000 | | St. Paul Hsg. & Redev. Auth. Health Care Rev. (Carondelet Village Proj.) | | 5.13 | | | 2/1/22 | | | | 243,365 | |
275,000 | | St. Paul Hsg. & Redev. Auth. Health Care Rev. (Carondelet Village Proj.) | | 5.13 | | | 8/1/22 | | | | 278,438 | |
175,000 | | St. Paul Hsg. & Redev. Auth. Health Care Rev. (Carondelet Village Proj.) | | 5.38 | | | 2/1/24 | | | | 177,539 | |
150,000 | | St. Paul Hsg. & Redev. Auth. Health Care Rev. (Carondelet Village Proj.) | | 5.38 | | | 8/1/24 | | | | 152,064 | |
150,000 | | St. Paul Hsg. & Redev. Auth. Health Care Rev. (Carondelet Village Proj.) | | 5.50 | | | 2/1/25 | | | | 152,078 | |
3,000,000 | | St. Paul Hsg. & Redev. Auth. Health Care Rev. (Carondelet Village Proj.) | | 6.25 | | | 8/1/30 | | | | 3,112,260 | |
130,000 | | St. Paul Hsg. & Redev. Auth. Multifamily Ref. Rev. (Sun Cliffe Apts. Proj.) (GNMA Collat. FHA Insd.) | | 5.88 | | | 7/1/15 | | | | 130,410 | |
1,000,000 | | St. Paul Hsg. & Redev. Auth. Multifamily Ref. Rev. Ref. (Series Center Proj.) | | 5.20 | | | 11/1/22 | | | | 920,170 | |
400,000 | | St. Paul Hsg. & Redev. Auth. Rev. (Rossy & Richard Schaller Proj.) | | 5.15 | | | 10/1/42 | | | | 327,904 | |
525,000 | | Stillwater Multifamily Hsg. Rev. (Orleans Homes LP Proj.) 8 | | 5.00 | | | 2/1/17 | | | | 513,912 | |
120,000 | | Victoria Sr. Hsg. Rev. (Chanhassen, Inc. Proj.) | | 5.50 | | | 8/1/18 | | | | 115,172 | |
490,000 | | Washington Co. Hsg. & Redev. Auth. Govt. Hsg. Rev. Ref. (Briar Pond Apartments Proj.) (GNMA Collat.) | | 5.50 | | | 2/20/14 | | | | 490,480 | |
695,000 | | Washington Co. Hsg. & Redev. Auth. Govt. Hsg. Rev. Ref. (Woodland Park Apartments Proj.) (CNTY Gty.) | | 4.70 | | | 10/1/26 | | | | 698,767 | |
560,000 | | Willmar Hsg. & Redev. Auth. Multifamily Rev. (Copperleaf) | | 8.00 | | | 3/15/41 | | | | 550,026 | |
250,000 | | Woodbury Economic Dev. Auth. Sr. Hsg. Rev. (Summerhouse) | | 5.75 | | | 6/1/41 | | | | 228,810 | |
| | | | | | | | | | | | |
| | | | | | | | | | | 52,705,088 | |
| | | | | | | | | | | | |
Municipal Lease 9 - 2.8% | | | | | | | | | | |
500,000 | | Anoka Co. Hsg. & Redev. Rev. | | 5.63 | | | 5/1/22 | | | | 505,910 | |
See accompanying notes to financial statements.
| | |
|
SCHEDULE OF INVESTMENTS (Unaudited) |
September 30, 2011 Sit Minnesota Tax-Free Income Fund (Continued) |
| | | | | | | | | | | | |
Principal Amount ($) | | Name of Issuer | | Coupon Rate (%) | | Maturity Date | | | Fair Value ($) | |
| | | | |
500,000 | | Anoka Co. Hsg. & Redev. Rev. | | 6.63 | | | 5/1/30 | | | | 506,650 | |
500,000 | | Anoka Co. Hsg. & Redev. Rev. | | 6.88 | | | 5/1/40 | | | | 507,885 | |
1,573,542 | | Carver Scott Co. Lease Purchase Agreement | | 5.00 | | | 8/4/20 | | | | 1,570,520 | |
37,000 | | Hennepin Co. Hsg. & Redev. Auth. Rev. | | 5.70 | | | 8/1/13 | | | | 37,131 | |
219,537 | | Intermediate School District 287 Lease Rev. | | 4.78 | | | 3/15/13 | | | | 221,061 | |
2,000,000 | | MN Hsg. Fin. Agy. Non-Profit Hsg. Rev. (St. Appropriation) | | 5.00 | | | 8/1/31 | | | | 2,098,120 | |
1,250,000 | | Virginia Hsg. & Redev. Auth. Health Care Fac. Lease Rev. | | 5.13 | | | 10/1/20 | | | | 1,303,888 | |
400,000 | | Virginia Hsg. & Redev. Auth. Health Care Fac. Lease Rev. | | 5.25 | | | 10/1/25 | | | | 404,772 | |
245,000 | | Virginia Hsg. & Redev. Auth. Health Care Fac. Lease Rev. | | 5.38 | | | 10/1/30 | | | | 246,619 | |
1,278,119 | | Winona School District 861 Lease Purchase | | 6.04 | | | 8/1/24 | | | | 1,278,988 | |
| | | | | | | | | | | | |
| | | | | | | | | | | 8,681,544 | |
| | | | | | | | | | | | |
Other Revenue Bonds - 10.4% | | | | | | | | | | |
1,030,000 | | Bloomington Port Auth. Recovery Zone Fac. Rev. (Radisson Blu MOA LLC) | | 6.25 | | | 12/1/16 | | | | 1,049,652 | |
510,000 | | Columbia Heights Economic Dev. Auth. Tax Increment Rev. (Huset Park Area Redev.) | | 5.20 | | | 2/15/22 | | | | 441,956 | |
682,487 | | Crystal Governmental Fac. Rev. | | 5.10 | | | 12/15/26 | | | | 699,761 | |
1,000,000 | | Guam Govt. Hotel Occupancy Tax Rev. 11 | | 6.00 | | | 11/1/26 | | | | 1,075,370 | |
230,000 | | McLeod Co. Commercial Dev. Rev. (Southwest MN Foundation) | | 5.13 | | | 12/1/31 | | | | 233,473 | |
475,000 | | Minneapolis Community Dev. Agy. Limited Tax Common Bond Fund (Discount Steel) 8 | | 5.25 | | | 6/1/19 | | | | 476,121 | |
1,500,000 | | Minneapolis National Marrow Donor Program Rev. | | 4.88 | | | 8/1/25 | | | | 1,439,505 | |
400,000 | | Minneapolis Tax Increment Rev. (Grant Park Proj.) | | 5.00 | | | 2/1/16 | | | | 404,364 | |
245,000 | | Minneapolis Tax Increment Rev. Ref. (East River/Unocal Site Proj.) | | 5.10 | | | 2/1/17 | | | | 245,906 | |
240,000 | | Minneapolis Tax Increment Rev. Ref. (East River/Unocal Site Proj.) | | 5.20 | | | 2/1/21 | | | | 228,682 | |
315,000 | | Minneapolis Tax Increment Rev. Ref. (St. Anthony Falls Proj.) | | 4.50 | | | 2/1/13 | | | | 315,794 | |
125,000 | | Minneapolis Tax Increment Rev. Ref. (St. Anthony Falls Proj.) | | 4.80 | | | 2/1/13 | | | | 125,874 | |
1,000,000 | | MN Development Rev. Limited Tax Supported Comm. Board | | 6.00 | | | 12/1/40 | | | | 1,074,270 | |
2,000,000 | | MN Development Rev. Limited Tax Supported Comm. Board | | 6.25 | | | 12/1/30 | | | | 2,223,900 | |
1,185,000 | | Mound Hsg. & Redev. Auth. Tax Increment Rev. Ref. (Metroplain Proj.) | | 5.00 | | | 2/15/27 | | | | 1,161,276 | |
280,000 | | Puerto Rico Infrastucture Financing Auth. Special Tax Rev. Ref. (AMBAC Insured) 6, 11 | | 8.40 | | | 7/1/28 | | | | 100,674 | |
500,000 | | St. Anthony Hsg. & Redev. Auth. Tax Increment Rev. (Silver Lake Village Hsg.) | | 4.75 | | | 2/1/17 | | | | 498,340 | |
500,000 | | St. Anthony Hsg. & Redev. Auth. Tax Increment Rev. (Silver Lake Village Hsg.) | | 4.90 | | | 2/1/22 | | | | 462,555 | |
1,000,000 | | St. Louis Park Economic Dev. Auth. Tax Increment Rev. (Hoigaard Vlg.) | | 5.00 | | | 2/1/23 | | | | 1,006,240 | |
500,000 | | St. Paul Hsg. & Redev. Auth. Rev. (Jimmy Lee Recreation Center Proj.) | | 4.75 | | | 12/1/26 | | | | 527,005 | |
500,000 | | St. Paul Hsg. & Redev. Auth. Rev. (Jimmy Lee Recreation Center Proj.) | | 5.00 | | | 12/1/32 | | | | 519,035 | |
1,195,000 | | St. Paul Hsg. & Redev. Auth. Tax Increment Rev. (9th St. Lofts Proj.) | | 6.38 | | | 2/15/28 | | | | 1,050,919 | |
1,047,000 | | St. Paul Hsg. & Redev. Auth. Tax Increment Rev. (Drake Marble Proj.) | | 6.75 | | | 3/1/28 | | | | 1,018,626 | |
480,000 | | St. Paul Hsg. & Redev. Auth. Tax Increment Rev. (Emerald Gardens Proj.) | | 5.00 | | | 3/1/15 | | | | 489,782 | |
785,000 | | St. Paul Hsg. & Redev. Auth. Tax Increment Rev. (Emerald Gardens Proj.) | | 6.50 | | | 3/1/29 | | | | 792,536 | |
1,064,000 | | St. Paul Hsg. & Redev. Auth. Tax Increment Rev. (North Quadrant Owner Occupied Proj.) | | 7.00 | | | 2/15/28 | | | | 997,085 | |
930,000 | | St. Paul Hsg. & Redev. Auth. Tax Increment Rev. (North Quadrant Owner Occupied Proj.) | | 7.50 | | | 2/15/28 | | | | 911,884 | |
2,967,000 | | St. Paul Hsg. & Redev. Auth. Tax Increment Rev. (Upper Landing Proj.) | | 6.80 | | | 3/1/29 | | | | 2,931,040 | |
1,832,000 | | St. Paul Hsg. & Redev. Auth. Tax Increment Rev. (Upper Landing Proj.) | | 6.90 | | | 3/1/29 | | | | 1,828,171 | |
805,000 | | St. Paul Port Auth. Lease Rev. (Regions Hospital Parking Ramp Proj.) | | 5.00 | | | 8/1/21 | | | | 827,661 | |
2,525,000 | | St. Paul Port Auth. Lease Rev. (Regions Hospital Parking Ramp Proj.) | | 5.00 | | | 8/1/36 | | | | 2,310,274 | |
2,000,000 | | St. Paul Port Auth. Rev. (Amherst H. Wilder Fndtn.-3) | | 5.00 | | | 12/1/36 | | | | 2,071,280 | |
715,000 | | St. Paul Recreational Facs. Gross Rev. (Highland National Proj.) | | 5.00 | | | 10/1/25 | | | | 759,816 | |
300,000 | | Steele Co. Health Care Fac. Gross Rev. Ref. Crossover | | 5.00 | | | 6/1/30 | | | | 301,317 | |
1,000,000 | | Virgin Islands Public Finance Auth. Rev. (Diago Proj.) 11 | | 6.63 | | | 10/1/29 | | | | 1,069,170 | |
| | | | | | | | | | | | |
| | | | | | | | | | | 31,669,314 | |
| | | | | | | | | | | | |
Public Facilities - 0.5% | | | | | | | | | | |
50,000 | | MN Agricultural Society State Fair Rev. | | 5.00 | | | 9/15/20 | | | | 51,426 | |
See accompanying notes to financial statements.
| | |
28 | | SIT MUTUAL FUNDS SEMI-ANNUAL REPORT |
| | |
|
SCHEDULE OF INVESTMENTS (Unaudited) | | |
September 30, 2011 Sit Minnesota Tax-Free Income Fund (Continued) | | |
| | | | | | | | | | | | |
Principal Amount ($) | | Name of Issuer | | Coupon Rate (%) | | Maturity Date | | | Fair Value ($) | |
| | | | |
255,000 | | Spring Grove Economic Dev. Auth. Public Proj. Rev. | | 5.00 | | | 2/1/16 | | | | 255,362 | |
125,000 | | Spring Grove Economic Dev. Auth. Public Proj. Rev. | | 5.10 | | | 2/1/18 | | | | 125,132 | |
1,075,000 | | St. Paul Hsg. & Redev. Auth. Parking Rev. (Smith Ave. Proj.) | | 5.00 | | | 8/1/35 | | | | 1,102,810 | |
| | | | | | | | | | | | |
| | | | | | | | | | | 1,534,730 | |
| | | | | | | | | | | | |
Sales Tax Revenue - 0.8% | | | | | | | | | | |
500,000 | | Puerto Rico Sales Tax Financing Corp. Rev. 11 | | 6.00 | | | 8/1/39 | | | | 544,260 | |
1,500,000 | | Puerto Rico Sales Tax Financing Corp. Rev. 6, 11 | | 6.25 | | | 8/1/33 | | | | 1,095,705 | |
1,000,000 | | Puerto Rico Sales Tax Financing Corp. Rev. 6, 11 | | 6.75 | | | 8/1/32 | | | | 888,480 | |
| | | | | | | | | | | | |
| | | | | | | | | | | 2,528,445 | |
| | | | | | | | | | | | |
Single Family Mortgage - 15.4% | | | | | | | | | | |
1,000,000 | | Dakota Co. Community Dev. Agy. Single Family Mtg. Rev. (GNMA-FNMA-FHLMC) | | 4.63 | | | 12/1/30 | | | | 1,006,690 | |
1,500,000 | | Dakota Co. Community Dev. Agy. Single Family Mtg. Rev. (GNMA-FNMA-FHLMC) | | 4.88 | | | 12/1/33 | | | | 1,533,870 | |
1,231,513 | | Dakota Co. Community Dev. Agy. Single Family Mtg. Rev. (GNMA-FNMA-FHLMC) 8 | | 5.13 | | | 12/1/40 | | | | 1,310,527 | |
247,841 | | Dakota Co. Community Dev. Agy. Single Family Mtg. Rev. (GNMA-FNMA-FHLMC) 8 | | 5.15 | | | 12/1/38 | | | | 262,946 | |
1,650,348 | | Dakota Co. Community Dev. Agy. Single Family Mtg. Rev. (GNMA-FNMA-FHLMC) 8 | | 5.30 | | | 12/1/39 | | | | 1,767,423 | |
1,000,000 | | Minneapolis St. Paul Hsg. Fin. Board Single Family Mtg. Rev. (GNMA-FNMA) | | 4.45 | | | 12/1/27 | | | | 1,027,400 | |
235,176 | | Minneapolis St. Paul Hsg. Fin. Board Single Family Mtg. Rev. (GNMA-FNMA) 8 | | 5.00 | | | 12/1/38 | | | | 235,727 | |
230,230 | | Minneapolis St. Paul Hsg. Fin. Board Single Family Mtg. Rev. (GNMA-FNMA) | | 5.70 | | | 4/1/27 | | | | 238,247 | |
617,145 | | Minneapolis St. Paul Hsg. Fin. Board Single Family Mtg. Rev. (GNMA-FNMA-FHLMC) | | 5.10 | | | 4/1/27 | | | | 660,685 | |
2,514,431 | | Minneapolis St. Paul Hsg. Fin. Board Single Family Mtg. Rev. (GNMA-FNMA-FHLMC) 8 | | 5.25 | | | 12/1/40 | | | | 2,687,927 | |
1,112,393 | | Minneapolis St. Paul Hsg. Fin. Board Single Family Mtg. Rev. (GNMA-FNMA-FHLMC) | | 5.45 | | | 4/1/27 | | | | 1,163,018 | |
550,000 | | Minneapolis St. Paul Hsg. Fin. Board Single Family Mtg. Rev. (GNMA-FNMA-FHLMC) 8 | | 5.52 | | | 3/1/41 | | | | 567,545 | |
5,800,000 | | MN Hsg. Fin. Agy. Homeownership Fin. (GNMA-FNMA-FHLMC) | | 4.45 | | | 7/1/31 | | | | 5,815,138 | |
3,125,000 | | MN Hsg. Fin. Agy. Homeownership Fin. (GNMA-FNMA-FHLMC) | | 4.70 | | | 1/1/31 | | | | 3,208,469 | |
200,000 | | MN Hsg. Fin. Agy. Residential Hsg. Rev. 8 | | 5.10 | | | 7/1/38 | | | | 200,532 | |
5,885,000 | | MN Hsg. Fin. Agy. Residential Hsg. Rev. | | 5.10 | | | 1/1/40 | | | | 6,042,188 | |
750,000 | | MN Hsg. Fin. Agy. Rev. (GNMA-FNMA Collateralized) | | 5.00 | | | 1/1/31 | | | | 786,540 | |
1,420,000 | | MN Hsg. Fin. Agy. Single Family Mtg. Rev. | | 5.00 | | | 7/1/38 | | | | 1,491,128 | |
1,915,000 | | MN Hsg. Fin. Agy. Single Family Mtg. Rev. | | 5.05 | | | 7/1/34 | | | | 1,969,769 | |
350,000 | | MN Hsg. Fin. Agy. Single Family Mtg. Rev. 8 | | 5.10 | | | 7/1/20 | | | | 352,366 | |
310,000 | | MN Hsg. Fin. Agy. Single Family Mtg. Rev. | | 5.20 | | | 1/1/23 | | | | 323,714 | |
75,000 | | MN Hsg. Fin. Agy. Single Family Mtg. Rev. | | 5.45 | | | 1/1/17 | | | | 75,725 | |
30,000 | | MN Hsg. Fin. Agy. Single Family Mtg. Rev. | | 5.70 | | | 1/1/17 | | | | 30,299 | |
285,000 | | MN Hsg. Fin. Agy. Single Family Mtg. Rev. 8 | | 5.85 | | | 7/1/19 | | | | 285,388 | |
1,185,000 | | MN Hsg. Fin. Agy. Single Family Mtg. Rev. | | 5.90 | | | 7/1/28 | | | | 1,243,681 | |
1,525,000 | | MN Hsg. Fin. Agy. Single Family Mtg. Rev. 8 | | 6.00 | | | 7/1/22 | | | | 1,547,052 | |
975,000 | | MN Hsg. Fin. Agy. Single Family Mtg. Rev. (GO of AGY. Insured) 8 | | 4.75 | | | 7/1/27 | | | | 973,859 | |
1,950,000 | | MN Hsg. Fin. Agy. Single Family Mtg. Rev. (GO of AGY. Insured) 8 | | 4.80 | | | 7/1/26 | | | | 1,966,282 | |
605,000 | | MN Hsg. Fin. Agy. Single Family Mtg. Rev. (GO of AGY. Insured) | | 5.00 | | | 1/1/20 | | | | 605,768 | |
815,000 | | MN Hsg. Fin. Agy. Single Family Mtg. Rev. (GO of AGY. Insured) 8 | | 5.00 | | | 1/1/37 | | | | 849,271 | |
1,825,000 | | MN Hsg. Fin. Agy. Single Family Mtg. Rev. (GO of AGY. Insured) 8 | | 5.15 | | | 7/1/28 | | | | 1,854,346 | |
1,830,000 | | MN Hsg. Fin. Agy. Single Family Mtg. Rev. (GO of AGY. Insured) 8 | | 5.25 | | | 7/1/33 | | | | 1,857,962 | |
1,210,000 | | MN Hsg. Fin. Agy. Single Family Mtg. Rev. (GO of AGY. Insured) 8 | | 5.50 | | | 7/1/28 | | | | 1,250,571 | |
140,000 | | MN Hsg. Fin. Agy. Single Family Mtg. Rev. (GO of AGY. Insured) | | 5.60 | | | 7/1/13 | | | | 140,491 | |
1,280,000 | | MN Hsg. Fin. Agy. Single Family Mtg. Rev. (GO of AGY. Insured) 8 | | 5.65 | | | 7/1/33 | | | | 1,329,728 | |
170,000 | | MN Hsg. Fin. Agy. Single Family Mtg. Rev. (GO of AGY. Insured) | | 5.90 | | | 7/1/25 | | | | 170,201 | |
15,000 | | MN Hsg. Fin. Agy. Single Family Mtg. Rev. (GO of AGY. Insured) 8 | | 5.90 | | | 7/1/29 | | | | 15,064 | |
See accompanying notes to financial statements.
| | |
|
SCHEDULE OF INVESTMENTS (Unaudited) | | |
September 30, 2011 Sit Minnesota Tax-Free Income Fund (Continued) | | |
| | | | | | | | | | | | |
Principal Amount ($) | | Name of Issuer | | Coupon Rate (%) | | Maturity Date | | | Fair Value ($) | |
| | | | |
15,000 | | MN Hsg. Fin. Agy. Single Family Mtg. Rev. (GO of AGY. Insured) | | 6.00 | | | 1/1/16 | | | | 15,043 | |
300,000 | | MN Hsg. Fin. Agy. Single Family Mtg. Rev. (NATL-RE Insured) | | 5.35 | | | 7/1/17 | | | | 312,573 | |
| | | | | | | | | | | | |
| | | | | | | | | | | 47,175,153 | |
| | | | | | | | | | | | |
Transportation - 2.3% | | | | | | | | | | |
2,500,000 | | Minneapolis & St. Paul Metro Airport Commission Rev. Ref. 8 | | 5.00 | | | 1/1/22 | | | | 2,716,550 | |
3,500,000 | | Minneapolis & St. Paul Metro Airport Commission Sub. Rev. (AMBAC Insured) 8 | | 5.00 | | | 1/1/25 | | | | 3,554,285 | |
1,000,000 | | Puerto Rico Highways & Transportation Auth. Rev. Ref. (AMBAC Insured) 1, 11 | | 0.70 | | | 7/1/45 | | | | 756,250 | |
| | | | | | | | | | | | |
| | | | | | | | | | | 7,027,085 | |
| | | | | | | | | | | | |
Utility - 5.8% | | | | | | | | | | |
1,000,000 | | Chaska Electric Rev. Ref. (Generating Facs. Proj.) | | 5.25 | | | 10/1/25 | | | | 1,064,450 | |
2,000,000 | | MN Municipal Power Agy. Electric Rev. | | 5.00 | | | 10/1/25 | | | | 2,183,140 | |
1,000,000 | | MN Municipal Power Agy. Electric Rev. | | 5.00 | | | 10/1/30 | | | | 1,054,090 | |
1,465,000 | | MN Municipal Power Agy. Electric Rev. | | 5.00 | | | 10/1/35 | | | | 1,513,770 | |
2,000,000 | | MN Municipal Power Agy. Electric Rev. | | 5.25 | | | 10/1/24 | | | | 2,118,120 | |
700,000 | | MN Municipal Power Agy. Electric Rev. | | 5.25 | | | 10/1/27 | | | | 752,857 | |
1,000,000 | | MN Municipal Power Agy. Electric Rev. | | 5.25 | | | 10/1/35 | | | | 1,058,050 | |
500,000 | | North Branch Electric System Rev. | | 5.75 | | | 8/1/28 | | | | 531,545 | |
1,250,000 | | Puerto Rico Electric Power Auth. Rev. Ref. 1, 11 | | 0.85 | | | 7/1/25 | | | | 951,725 | |
2,000,000 | | Southern MN Power Agy. Power Supply System Rev. | | 5.25 | | | 1/1/30 | | | | 2,166,380 | |
3,450,000 | | Southern MN Power Agy. Power Supply System Rev. (NATL-RE Insured) 1 | | 1.72 | | | 1/1/13 | | | | 3,407,358 | |
175,000 | | Southern MN Power Agy. Power Supply System Rev. (NATL-RE Insured) 6 | | 5.01 | | | 1/1/26 | | | | 92,936 | |
780,000 | | Virgin Islands Water & Power Auth. Water System Rev. Ref. 11 | | 5.50 | | | 7/1/17 | | | | 781,412 | |
| | | | | | | | | | | | |
| | | | | | | | | | | 17,675,833 | |
| | | | | | | | | | | | |
Total Municipal Bonds (cost: $289,938,451) | | | | | | | | | 294,382,836 | |
| | | | | | | | | | | | |
See accompanying notes to financial statements.
| | |
30 | | SIT MUTUAL FUNDS SEMI-ANNUAL REPORT |
| | |
|
SCHEDULE OF INVESTMENTS (Unaudited) | | |
September 30, 2011 Sit Minnesota Tax-Free Income Fund (Continued) | | |
| | | | | | |
| | |
Quantity | | Name of Issuer | | Fair Value ($) | |
| |
Closed-End Mutual Funds - 0.8% | | | | |
37,696 | | First American Minnesota Municipal Income Fund II (MXN) | | | 568,833 | |
112,998 | | MN Municipal Income Portfolio (MXA) | | | 1,792,148 | |
| | | | | | |
| |
Total Closed-End Mutual Funds (cost: $2,006,620) | | | 2,360,981 | |
| | | | | | |
| |
Short-Term Securities - 2.2% | | | | |
6,853,973 | | Wells Fargo Advantage Minnesota Money Market Fund, 0.01% | | | | |
| |
Total Short-Term Securities (cost: $6,853,973) | | | 6,853,973 | |
| | | | | | |
| |
Total Investments in Securities - 99.4% (cost: $298,799,044) | | | 303,597,790 | |
Other Assets and Liabilities, net - 0.6% | | | 1,857,243 | |
| | | | | | |
| |
Total Net Assets - 100.0% | | $ | 305,455,033 | |
| | | | | | |
1 | Variable rate security. Rate disclosed is as of September 30, 2011. |
2 | Securities considered illiquid by the Investment Adviser. The total value of such securities as of September 30, 2011 was $101,000 and represented 0.03% of net assets. |
5 | The issuer is in default of certain debt covenants. Income is not being accrued. The total value of such securities as of September 30, 2011 was $101,000 and represented 0.03% of net assets. |
6 | Zero coupon security. Rate disclosed is the effective yield on purchase date. |
8 | Securities the income from which is treated as a tax preference that is included in alternative minimum taxable income for purposes of computing federal alternative minimum tax (AMT). At September 30, 2011, 11.9% of net assets in the Fund was invested in such securities. |
9 | Municipal Lease Security. The total value of such securities as of September 30, 2011 was $8,681,544 and represented 2.8% of net assets. These securities have been determined to be liquid by the Adviser in accordance with guidelines established by the Board of Directors. |
11 | The Fund may invest in obligations issued by U.S. territories, for example Guam, Puerto Rico, and Virgin Islands. The total value of such securities as of September 30, 2011 was $14,418,096 and represented 4.7% of net assets. |
Numeric footnotes not disclosed are not applicable to this Schedule of Investments.
A summary of the inputs used to value the Fund’s net assets as of September 30, 2011 is as follows (see Note 2 - significant accounting policies in the notes to financial statements):
| | | | | | | | | | | | | | |
| | Investment in Securities | |
| | | | |
| | Level 1 Quoted Price ($) | | | Level 2 Other significant observable inputs ($) | | | Level 3 Significant unobservable inputs ($) | | Total ($) | |
| | | | |
Short-Term Securities | | | 6,853,973 | | | | — | | | — | | | 6,853,973 | |
Closed-End Mutual Funds | | | 2,360,981 | | | | — | | | — | | | 2,360,981 | |
Municipal Bonds | | | — | | | | 294,382,836 | | | — | | | 294,382,836 | |
| | | | |
Total: | | | 9,214,954 | | | | 294,382,836 | | | — | | | 303,597,790 | |
| | | | |
See accompanying notes to financial statements.
| | |
|
STATEMENTS OF ASSETS AND LIABILITIES (Unaudited) |
September 30, 2011 | | |
| | | | | | | | | | | | |
| | Sit U.S. Government Securities Fund | | | Sit Tax-Free Income Fund | | | Sit Minnesota Tax-Free Income Fund | |
ASSETS | | | | | | | | | | | | |
Investments in securities, at identified cost | | $ | 1,346,934,618 | | | $ | 166,354,915 | | | $ | 298,799,044 | |
| | | | | | | | | | | | |
| | | |
Investments in securities, at fair value - see accompanying schedule for detail | | $ | 1,382,487,611 | | | $ | 145,237,510 | | | $ | 303,597,790 | |
Cash in bank on demand deposit | | | 28,196,587 | | | | — | | | | — | |
Restricted cash | | | 15,000,000 | | | | — | | | | — | |
Accrued interest and dividends receivable. | | | 7,020,095 | | | | 1,940,756 | | | | 4,344,684 | |
Receivable for principal paydowns | | | 379,458 | | | | — | | | | — | |
Other receivables | | | — | | | | 26,750 | | | | 24,000 | |
Receivable for Fund shares sold | | | 18,752,688 | | | | 71,308 | | | | 427,796 | |
| | | | | | | | | | | | |
| | | |
Total assets | | | 1,451,836,439 | | | | 147,276,324 | | | | 308,394,270 | |
| | | | | | | | | | | | |
| | | |
LIABILITIES | | | | | | | | | | | | |
Disbursements in excess of cash balances | | | — | | | | 65,678 | | | | 1,893,564 | |
Payable for investment securities purchased | | | 15,015,200 | | | | 1,206,961 | | | | — | |
Payable for Fund shares redeemed. | | | 11,490,597 | | | | 187,288 | | | | 636,068 | |
Cash portion of dividends payable to shareholders | | | 117,670 | | | | 120,980 | | | | 209,657 | |
Accrued investment management fees. | | | 904,423 | | | | 95,746 | | | | 199,948 | |
Outstanding options written, at fair value (premiums received $487,295) | | | 170,312 | | | | — | | | | — | |
| | | | | | | | | | | | |
| | | |
Total liabilities | | | 27,698,202 | | | | 1,676,653 | | | | 2,939,237 | |
| | | | | | | | | | | | |
| | | |
Net assets applicable to outstanding capital stock | | $ | 1,424,138,237 | | | $ | 145,599,671 | | | $ | 305,455,033 | |
| | | | | | | | | | | | |
| | | |
Net assets consist of: | | | | | | | | | | | | |
Capital (par value and paid-in surplus) | | $ | 1,392,317,692 | | | $ | 194,875,834 | | | $ | 309,036,518 | |
Undistributed (distributions in excess of) net investment income | | | (15,190 | ) | | | — | | | | — | |
Accumulated net realized gain (loss) from security transactions and written options | | | (4,034,241 | ) | | | (28,158,758 | ) | | | (8,380,231 | ) |
Unrealized appreciation (depreciation) on investments and written options. | | | 35,869,976 | | | | (21,117,405 | ) | | | 4,798,746 | |
| | | | | | | | | | | | |
| | $ | 1,424,138,237 | | | $ | 145,599,671 | | | $ | 305,455,033 | |
| | | | | | | | | | | | |
| | | |
Outstanding shares | | | 125,538,838 | | | | 16,201,201 | | | | 29,929,344 | |
| | | | | | | | | | | | |
| | | |
Net asset value per share of outstanding capital stock. | | $ | 11.34 | | | $ | 8.99 | | | $ | 10.21 | |
| | | | | | | | | | | | |
See accompanying notes to financial statements.
| | |
32 | | SIT MUTUAL FUNDS SEMI-ANNUAL REPORT |
| | |
|
STATEMENTS OF OPERATIONS (Unaudited) |
Six Months Ended September 30, 2011 | | |
| | | | | | | | | | | | |
| | Sit U.S. Government Securities Fund | | | Sit Tax-Free Income Fund | | | Sit Minnesota Tax-Free Income Fund | |
Investment income: | | | | | | | | | | | | |
Income: | | | | | | | | | | | | |
Dividends | | | — | | | | $346,587 | | | | $62,726 | |
Interest | | | $22,321,479 | | | | 3,634,819 | | | | 7,860,327 | |
| | | | | | | | | | | | |
Total income. | | | 22,321,479 | | | | 3,981,406 | | | | 7,923,053 | |
| | | | | | | | | | | | |
| | | |
Expenses (note 4): | | | | | | | | | | | | |
Investment management fee | | | 4,784,333 | | | | 578,955 | | | | 1,200,712 | |
| | | | | | | | | | | | |
Total expenses | | | 4,784,333 | | | | 578,955 | | | | 1,200,712 | |
| | | | | | | | | | | | |
| | | |
Net investment income | | | 17,537,146 | | | | 3,402,451 | | | | 6,722,341 | |
| | | | | | | | | | | | |
| | | |
Realized and unrealized gain (loss): | | | | | | | | | | | | |
Net realized gain (loss) on investments | | | (666,319 | ) | | | (2,064,833 | ) | | | (217,278 | ) |
Net realized gain (loss) on written options | | | (2,482,818 | ) | | | — | | | | — | |
| | | |
Net change in unrealized appreciation (depreciation) on investments | | | 8,003,849 | | | | 9,692,117 | | | | 16,067,253 | |
Net change in unrealized appreciation (depreciation) on written options | | | 121,500 | | | | — | | | | — | |
| | | | | | | | | | | | |
| | | |
Net gain (loss) | | | 4,976,212 | | | | 7,627,284 | | | | 15,849,975 | |
| | | | | | | | | | | | |
| | | |
Net increase (decrease) in net assets resulting from operations | | | $22,513,358 | | | | $11,029,735 | | | | $22,572,316 | |
| | | | | | | | | | | | |
See accompanying notes to financial statements.
| | |
|
STATEMENTS OF CHANGES IN NET ASSETS |
| | |
| | | | | | | | |
| | Sit U.S. Government Securities Fund | |
| | Six Months Ended September 30, 2011 (Unaudited) | | | Year Ended March 31, 2011 | |
Operations: | | | | | | | | |
Net investment income. | | | $17,537,146 | | | | $26,983,552 | |
Net realized gain (loss) on investments and written options | | | (3,149,137 | ) | | | 985,223 | |
Net change in unrealized appreciation (depreciation) of investments and written options | | | 8,125,349 | | | | 12,593,764 | |
| | | | | | | | |
Net increase (decrease) in net assets resulting from operations | | | 22,513,358 | | | | 40,562,539 | |
| | | | | | | | |
Distributions from: | | | | | | | | |
Net investment income. | | | (17,552,336 | ) | | | (26,943,488 | ) |
Net realized gains on investments | | | — | | | | (327,896 | ) |
| | | | | | | | |
| | |
Total distributions | | | (17,552,336 | ) | | | (27,271,384 | ) |
| | | | | | | | |
Capital share transactions: | | | | | | | | |
Proceeds from shares sold | | | 770,077,408 | | | | 777,577,419 | |
Reinvested distributions | | | 16,625,372 | | | | 27,608,283 | |
Payments for shares redeemed | | | (424,679,387 | ) | | | (530,043,200 | ) |
| | | | | | | | |
| | |
Increase (decrease) in net assets from capital transactions | | | 362,023,393 | | | | 275,142,502 | |
| | | | | | | | |
| | |
Total increase (decrease) in net assets | | | 366,984,415 | | | | 288,433,657 | |
Net assets: | | | | | | | | |
Beginning of period | | | 1,057,153,822 | | | | 768,720,165 | |
| | | | | | | | |
End of period * | | | $1,424,138,237 | | | | $1,057,153,822 | |
| | | | | | | | |
| | |
Capital transactions in shares: | | | | | | | | |
Sold | | | 67,792,355 | | | | 69,266,689 | |
Reinvested distributions | | | 1,463,945 | | | | 2,451,775 | |
Redeemed. | | | (37,380,981 | ) | | | (47,134,441 | ) |
| | | | | | | | |
| | |
Net increase (decrease) | | | 31,875,319 | | | | 24,584,023 | |
| | | | | | | | |
* Includes undistributed (distributions in excess of) net investment income | | | ($15,190 | ) | | | $— | |
See accompanying notes to financial statements.
| | |
34 | | SIT MUTUAL FUNDS SEMI-ANNUAL REPORT |
| | | | | | | | | | | | | | |
Sit Tax-Free Income Fund | | | Sit Minnesota Tax-Free Income Fund | |
Six Months Ended September 30, 2011 (Unaudited) | | | Year Ended March 31, 2011 | | | Six Months Ended September 30, 2011 (Unaudited) | | | Year Ended March 31, 2011 | |
| $3,402,451 | | | $ | 7,083,545 | | | $ | 6,722,341 | | | $ | 12,842,277 | |
| (2,064,833) | | | | (2,343,339 | ) | | | (217,278 | ) | | | 687,582 | |
| | | |
| 9,692,117 | | | | (4,402,244 | ) | | | 16,067,253 | | | | (7,031,522 | ) |
| | | | | | | | | | | | | | |
| | | |
| 11,029,735 | | | | 337,962 | | | | 22,572,316 | | | | 6,498,337 | |
| | | | | | | | | | | | | | |
| | | |
| (3,391,004 | ) | | | (7,083,545 | ) | | | (6,658,219 | ) | | | (12,842,277 | ) |
| — | | | | — | | | | — | | | | — | |
| | | | | | | | | | | | | | |
| | | |
| (3,391,004) | | | | (7,083,545 | ) | | | (6,658,219 | ) | | | (12,842,277 | ) |
| | | | | | | | | | | | | | |
| | | |
| 10,272,145 | | | | 21,999,747 | | | | 39,739,941 | | | | 76,051,309 | |
| 2,624,434 | | | | 5,952,935 | | | | 5,215,207 | | | | 10,917,966 | |
| (15,306,686) | | | | (34,330,959 | ) | | | (44,519,433 | ) | | | (82,326,152 | ) |
| | | | | | | | | | | | | | |
| | | |
| (2,410,107) | | | | (6,378,277 | ) | | | 435,715 | | | | 4,643,123 | |
| | | | | | | | | | | | | | |
| | | |
| 5,228,624 | | | | (13,123,860 | ) | | | 16,349,812 | | | | (1,700,817 | ) |
| | | |
| 140,371,047 | | | | 153,494,907 | | | | 289,105,221 | | | | 290,806,038 | |
| | | | | | | | | | | | | | |
| $145,599,671 | | | $ | 140,371,047 | | | $ | 305,455,033 | | | $ | 289,105,221 | |
| | | | | | | | | | | | | | |
| | | |
| 1,180,266 | | | | 2,463,769 | | | | 3,982,527 | | | | 7,686,681 | |
| 298,817 | | | | 672,009 | | | | 521,847 | | | | 1,100,769 | |
| (1,746,863) | | | | (3,915,103 | ) | | | (4,458,411 | ) | | | (8,338,982 | ) |
| | | | | | | | | | | | | | |
| | | |
| (267,780) | | | | (779,325 | ) | | | 45,963 | | | | 448,468 | |
| | | | | | | | | | | | | | |
| $— | | | ($ | 11,447 | ) | | $ | — | | | ($ | 64,122 | ) |
| | |
|
FINANCIAL HIGHLIGHTS | | |
Per share income and capital changes for a share outstanding throughout the period. Sit U.S. Government Securities Fund |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | Six Months Ended September 30, 2011 | | | Years Ended March 31, | |
| | | (Unaudited) | | | | 2011 | | | | 2010 | | | | 2009 | | | | 2008 | | | | 2007 | |
| |
Net Asset Value: | | | | | | | | | | | | | | | | | | | | | | | | |
Beginning of period | | | $11.29 | | | | $11.13 | | | | $10.84 | | | | $10.92 | | | | $10.56 | | | | $10.45 | |
| | | | |
Operations: | | | | | | | | | | | | | | | | | | | | | | | | |
Net investment income 1 | | | 0.17 | | | | 0.32 | | | | 0.44 | | | | 0.52 | | | | 0.50 | | | | 0.48 | |
Net realized and unrealized gains (losses) on investments and written options | | | 0.05 | | | | 0.16 | | | | 0.29 | | | | (0.08 | ) | | | 0.36 | | | | 0.11 | |
| | | | |
Total from operations | | | 0.22 | | | | 0.48 | | | | 0.73 | | | | 0.44 | | | | 0.86 | | | | 0.59 | |
| | | | |
Distributions from: | | | | | | | | | | | | | | | | | | | | | | | | |
Net investment income | | | (0.17) | | | | (0.32 | ) | | | (0.44 | ) | | | (0.52 | ) | | | (0.50 | ) | | | (0.48 | ) |
Net realized gains | | | — | | | | ( — | )2 | | | — | | | | — | | | | — | | | | — | |
| | | | |
Total Distributions | | | (0.17) | | | | (0.32 | ) | | | (0.44 | ) | | | (0.52 | ) | | | (0.50 | ) | | | (0.48 | ) |
| | | | |
Net Asset Value: | | | | | | | | | | | | | | | | | | | | | | | | |
End of period | | | $11.34 | | | | $11.29 | | | | $11.13 | | | | $10.84 | | | | $10.92 | | | | $10.56 | |
| | | | |
Total investment return 3 | | | 1.94% | | | | 4.37% | | | | 6.88% | | | | 4.18% | | | | 8.37% | | | | 5.81% | |
| | | | |
Net assets at end of period (000’s omitted) | | | $1,424,138 | | | | $1,057,154 | | | | $768,720 | | | | $390,630 | | | | $254,677 | | | | $198,378 | |
| | | | | | |
Ratios: 4 | | | | | | | | | | | | | | | | | | | | | | | | |
Expenses (without waiver) 5 | | | 0.80% | | | | 0.81% | | | | 0.82% | | | | 0.83% | | | | 0.85% | | | | 0.85% | |
Expenses (with waiver) 5 | | | 0.80% | | | | 0.75% | | | | 0.80% | | | | 0.80% | | | | 0.80% | | | | 0.80% | |
Net investment income (with waiver) | | | 2.93% | | | | 2.88% | | | | 3.85% | | | | 4.87% | | | | 4.66% | | | | 4.61% | |
| | | | | | |
Portfolio turnover rate (excluding short-term securities) | | | 17.48%6 | | | | 45.80% | | | | 66.89% | | | | 59.63% | | | | 67.42% | | | | 43.98% | |
1 | The net investment income per share is based on average shares outstanding for the period. |
2 | Amount represents less than $0.01 per share. |
3 | Total investment return is based on the change in net asset value of a share during the period (not annualized) and assumes reinvestment of distributions at net asset value. |
4 | The ratio information is calculated based on average daily net assets (annualized). Effective November 1, 2010, total Fund expenses are calculated at 0.80% of average daily net assets. Prior to this date, expenses were calculated at a higher rate and the investment adviser voluntarily waived expenses that were otherwise payable by the Fund. |
5 | In addition to fees and expenses which the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of the acquired funds in which it invests. Such indirect expenses are not included in the above reported expense ratios. |
| | |
36 | | SIT MUTUAL FUNDS SEMI-ANNUAL REPORT |
| | |
|
FINANCIAL HIGHLIGHTS | | |
Per share income and capital changes for a share outstanding throughout the period. Sit Tax-Free Income Fund |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | Six Months Ended September 30, 2011 | | | Years Ended March 31, | |
| | | (Unaudited) | | | | 2011 | | | | 2010 | | | | 2009 | | | | 2008 | | | | 2007 | |
| |
Net Asset Value: | | | | | | | | | | | | | | | | | | | | | | | | |
Beginning of period | | | $8.52 | | | | $8.90 | | | | $7.93 | | | | $9.16 | | | | $9.72 | | | | $9.72 | |
| | | | |
Operations: | | | | | | | | | | | | | | | | | | | | | | | | |
Net investment income 1 | | | 0.21 | | | | 0.41 | | | | 0.41 | | | | 0.41 | | | | 0.40 | | | | 0.38 | |
Net realized and unrealized gains (losses) on investments | | | 0.47 | | | | (0.38 | ) | | | 0.97 | | | | (1.23 | ) | | | (0.56 | ) | | | — | |
| | | | |
Total from operations | | | 0.68 | | | | 0.03 | | | | 1.38 | | | | (0.82 | ) | | | (0.16 | ) | | | 0.38 | |
| | | | |
Distributions from: | | | | | | | | | | | | | | | | | | | | | | | | |
Net investment income | | | (0.21) | | | | (0.41 | ) | | | (0.41 | ) | | | (0.41 | ) | | | (0.40 | ) | | | (0.38 | ) |
| | | | |
Net Asset Value: | | | | | | | | | | | | | | | | | | | | | | | | |
End of period | | | $8.99 | | | | $8.52 | | | | $8.90 | | | | $7.93 | | | | $9.16 | | | | $9.72 | |
| | | | |
Total investment return 2 | | | 8.01% | | | | 0.26% | | | | 17.71% | | | | (9.14% | ) | | | (1.72% | ) | | | 4.00% | |
| | | | |
Net assets at end of period (000’s omitted) | | | $145,600 | | | | $140,371 | | | | $153,495 | | | | $138,781 | | | | $322,590 | | | | $377,549 | |
| | | | | | |
Ratios: 3 | | | | | | | | | | | | | | | | | | | | | | | | |
Expenses (without waiver) 4 | | | 0.80% | | | | 0.80% | | | | 0.80% | | | | 0.80% | | | | 0.80% | | | | 0.80% | |
Expenses (with waiver) 4 | | | 0.80% | | | | 0.80% | | | | 0.80% | | | | 0.79% | | | | 0.77% | | | | 0.77% | |
Net investment income (without waiver) | | | 4.70% | | | | 4.63% | | | | 4.79% | | | | 4.63% | | | | 4.18% | | | | 3.93% | |
| | | | | | |
Portfolio turnover rate (excluding short-term securities) | | | 17.89%5 | | | | 30.23% | | | | 27.30% | | | | 18.51% | | | | 42.93% | | | | 50.67% | |
1 | The net investment income per share is based on average shares outstanding for the period. |
2 | Total investment return is based on the change in net asset value of a share during the period (not annualized) and assumes reinvestment of distributions at net asset value. |
3 | The ratio information is calculated based on average daily net assets (annualized). Total Fund expenses are limited to 0.80% of average daily net assets. However, during the periods above, the investment adviser voluntarily absorbed expenses that were otherwise payable by the Fund. |
4 | In addition to fees and expenses which the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of the acquired funds in which it invests. Such indirect expenses are not included in the above reported expense ratios. |
| | |
|
FINANCIAL HIGHLIGHTS | | |
Per share income and capital changes for a share outstanding throughout the period. Sit Minnesota Tax-Free Income Fund |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | Six Months Ended September 30, 2011 | | | Years Ended March 31, | |
| | (Unaudited) | | | 2011 | | | 2010 | | | 2009 | | | 2008 | | | 2007 | |
| |
Net Asset Value: | | | | | | | | | | | | | | | | | | | | | | | | |
Beginning of period | | | $9.67 | | | | $9.88 | | | | $8.97 | | | | $9.76 | | | | $10.21 | | | | $10.12 | |
| | | | |
Operations: | | | | | | | | | | | | | | | | | | | | | | | | |
Net investment income 1 | | | 0.22 | | | | 0.43 | | | | 0.43 | | | | 0.43 | | | | 0.43 | | | | 0.42 | |
Net realized and unrealized gains (losses) on investments | | | 0.54 | | | | (0.21) | | | | 0.91 | | | | (0.79) | | | | (0.45) | | | | 0.09 | |
| | | | |
Total from operations | | | 0.76 | | | | 0.22 | | | | 1.34 | | | | (0.36) | | | | (0.02) | | | | 0.51 | |
| | | | |
Distributions from: | | | | | | | | | | | | | | | | | | | | | | | | |
Net investment income | | | (0.22) | | | | (0.43) | | | | (0.43) | | | | (0.43) | | | | (0.43) | | | | (0.42) | |
| | | | |
Net Asset Value: | | | | | | | | | | | | | | | | | | | | | | | | |
End of period | | | $10.21 | | | | $9.67 | | | | $9.88 | | | | $8.97 | | | | $9.76 | | | | $10.21 | |
| | | | |
Total investment return 2 | | | 7.96% | | | | 2.22% | | | | 15.22% | | | | (3.67%) | | | | (0.25%) | | | | 5.17% | |
| | | | |
Net assets at end of period (000’s omitted) | | | $305,455 | | | | $289,105 | | | | $290,806 | | | | $244,123 | | | | $307,738 | | | | $288,922 | |
| | | | | | |
Ratios: 3 | | | | | | | | | | | | | | | | | | | | | | | | |
Expenses 4 | | | 0.80% | | | | 0.80% | | | | 0.80% | | | | 0.80% | | | | 0.80% | | | | 0.80% | |
Net investment income | | | 4.48% | | | | 4.35% | | | | 4.52% | | | | 4.65% | | | | 4.25% | | | | 4.17% | |
| | | | | | |
Portfolio turnover rate (excluding short-term securities) | | | 9.61%5 | | | | 24.48% | | | | 11.46% | | | | 15.68% | | | | 37.48% | | | | 28.42% | |
1 | The net investment income per share is based on average shares outstanding for the period. |
2 | Total investment return is based on the change in net asset value of a share during the period (not annualized) and assumes reinvestment of distributions at net asset value. |
3 | The ratio information is calculated based on average daily net assets (annualized). |
4 | In addition to fees and expenses which the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of the acquired funds in which it invests. Such indirect expenses are not included in the above reported expense ratios. |
| | |
38 | | SIT MUTUAL FUNDS SEMI-ANNUAL REPORT |
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| | |
|
NOTES TO FINANCIAL STATEMENTS (Unaudited) | | |
Six Months Ended September 30, 2011 | | |
The Sit Mutual Funds (the Funds) are no-load funds, and are registered under the Investment Company Act of 1940 (as amended) as diversified (except Minnesota Tax-Free Income Fund which is non-diversified), open-end management investment companies, or series thereof. The Sit Minnesota Tax-Free Income Fund and the Sit Tax-Free Income Fund are series funds of Sit Mutual Funds II, Inc. Each fund has 10 billion authorized shares of capital stock. Shares in the U.S. Government Securities Fund have a par value of $0.01, and shares in other funds have a par value of $0.001. This report covers three of the bond funds of the Sit Mutual Funds.
The investment objective for each of these Funds is as follows:
| | |
Fund | | Investment Objective |
U.S. Government Securities | | High level of current income and safety of principal. |
Tax-Free Income | | High level of current income that is exempt from federal income tax, consistent with the preservation of capital. |
Minnesota Tax-Free Income | | High level of current income that is exempt from federal regular income tax and Minnesota regular personal income tax, consistent with the preservation of capital. |
(2) | Significant Accounting Policies |
Investments in Securities
Investment securities are carried at fair value based upon closing market quotations on the last business day of the period. Investments in securities traded on national or international securities exchanges are valued at the last reported sales price prior to the time when assets are valued. Securities traded on the over-the-counter market are valued at the last reported sales price or if the last sales price is not available, at the last reported bid price. The current fair value of certain fixed income securities is provided by an independent pricing service. Fixed income securities for which prices are not available from an independent pricing service but where an active market exists are valued using market quotations obtained from broker-dealers or quotation systems. Securities for which market quotations are not available, such as private placement securities, are valued at fair value according to methods selected in good faith by the Adviser and may include dealer-supplied valuations. Short-term investments of sufficient credit quality with maturities of 60 days or less when acquired, or which subsequently are within 60 days of maturity, are valued at amortized cost, which approximates fair value. Option and future contracts entered into and held by the Funds are valued at the close of the securities and commodities exchange on which they are traded.
Security transactions are accounted for on the date the securities are purchased or sold. Gains and losses are calculated on the identified-cost basis. Interest, including level-yield amortization of long-term bond premium and discount, is recorded on the accrual basis. Dividends received from closed-end fund holdings are included in Dividend Income and distributions from capital gains, if any, are included in Net Realized Gain (Loss).
Delivery and payment for securities which have been purchased by the Funds on a forward commitment or when-issued basis can take place two weeks or more after the transaction date. During this period, such securities are subject to market fluctuations and may increase or decrease in value prior to delivery.
The Minnesota Tax-Free Income Fund concentrates its investments in Minnesota, and therefore may have more credit risk related to the economic conditions in the state of Minnesota than a portfolio with broader geographical diversification.
Derivative Instruments
The Funds apply derivative instrument disclosure standards in order to enable investors to understand how and why the Funds use derivatives, how derivatives are accounted for, and how derivative instruments affect the Funds’ financial statements.
To hedge interest rate risk, the U.S. Government Securities Fund purchased put option and wrote call option contracts traded on a U.S. exchange. Risks of purchasing and writing options include the possibility of an illiquid market and that a change in the value of the option may not correlate with changes in the value of the underlying securities.
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40 | | SIT MUTUAL FUNDS SEMI-ANNUAL REPORT |
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NOTES TO FINANCIAL STATEMENTS (Unaudited) | | |
Six Months Ended September 30, 2011 (Continued) | | |
The premiums paid for the options represent the cost of the investment and the options are valued daily at their closing price. The Funds recognize a realized gain or loss when the option is sold or expired. Option holdings within the Funds, which may include put options and call options, are subject to loss of value with the passage of time, and may experience a total loss of value upon expiration. With options, there is minimal counterparty risk to the Funds since they are exchange traded. During the Six Months Ended ended September 30, 2011, the average cost for purchased options and premium received in the U.S. Government Securities Fund for written options were $731,412 and $398,423, respectively. The number of open option contracts outstanding as of September 30, 2011 and the amounts of realized gain (loss) and changes in unrealized appreciation (depreciation), as disclosed below, also serve as indicators of the volume of activity for the Fund throughout the year.
Balance Sheet – Values of derivatives as of September 30, 2011
U.S. Government Securities Fund
| | | | |
| | Asset Derivatives Value 1 | | Liability Derivatives Value 2 |
| | |
Interest rate risk: | | | | |
Purchased put options | | $621,875 | | — |
Written call options | | — | | $170,312 |
1Statement of Assets and Liabilities location: Investments in securities, at fair value.
2Statement of Assets and Liabilities location: Outstanding options written, at fair value.
The effect of derivative instruments on the statement of operations for the Six Months Ended ended September 30, 2011:
U.S. Government Securities Fund
| | | | |
| | Amount of Realized Gain (Loss) on Derivatives 3 | | Change in Unrealized Appreciation (Depreciation) on Derivatives 4 |
| | |
Interest rate risk: | | | | |
Purchased put options | | ($4,298,346) | | ($171,612) |
Written call options | | (2,482,818) | | 121,500 |
3Statement of Operations location: Net realized gain (loss) on investments and net realized gain (loss) on written options.
4Statement of Operations location: Net change in unrealized appreciation (depreciation) on investments and net change in unrealized appreciation (depreciation) on written options.
Transactions in written options for the Six Months Ended ended September 30, 2011 were as follows:
| | | | | | | | | | | | | | |
| | | | Number of Contracts | | | | | Premium | | | |
| | |
Outstanding, March 31, 2011 | | | | | 750 | | | | | | $300,953 | | | |
Call options written | | | | | 7,100 | | | | | | 2,666,203 | | | |
Call options expired | | | | | — | | | | | | — | | | |
Call options closed | | | | | (5,900) | | | | | | (2,479,861 | ) | | |
| | |
Outstanding, September 30, 2011 | | | | | 1,950 | | | | | | $487,295 | | | |
| | |
Fair Value Measurements
The inputs and valuations techniques used to measure fair value of the Funds’ net assets are summarized into three levels as described in the hierarchy below:
| • | | Level 1 – quoted prices for active markets for identical securities. An active market for the security is a market in which transactions occur with sufficient frequency and volume to provide pricing information on an ongoing basis. A quoted price in an active market provides the most reliable evidence of fair value. |
| | |
|
NOTES TO FINANCIAL STATEMENTS (Unaudited) | | |
Six Months Ended September 30, 2011 (Continued) | | |
| • | | Level 2 – debt securities are valued based on evaluated prices received from independent pricing services or from dealers who make markets in such securities. For corporate bonds, U.S. government and government agency obligations, and municipal securities the pricing services utilize matrix pricing which considers yield or price of bonds of comparable quality, coupon, maturity, and type as well as dealer supplied prices. For asset-backed securities and mortgage-backed securities, the pricing services utilize matrix pricing which considers prepayment speed assumptions, attributes of the collateral, yield or price of bonds of comparable quality, coupon, maturity, and type as well as dealer supplied prices. All of these inputs are derived principally from or corroborated by observable market data. An adjustment to any observable input that is significant to the fair value may render the measurement a Level 3 measurement. |
| • | | Level 3 – significant unobservable inputs, including the Adviser’s own assumptions in determining the fair value of investments. |
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
The fair value of the Fund’s bonds are generally based on quotes received from brokers or independent pricing services. Bonds with quotes that are based on actual trades with a sufficient level of activity on or near the measurement date are classified as Level 2 assets.
At the end of each calendar quarter, management evaluates the Level 2 and 3 assets and liabilities for changes in liquidity, including but not limited to: whether a broker is willing to execute at the quoted price, the depth and consistency of prices from third party services, and the existence of contemporaneous, observable trades in the market. Additionally, management evaluates the Level 1 and 2 assets and liabilities on a quarterly basis for changes in listings or delistings on national exchanges. Due to the inherent uncertainty of determining the fair value of investments that do not have a readily available market value, the fair value of the Fund’s investments may fluctuate from period to period. Additionally, the fair value of investments may differ significantly from the values that would have been used had a ready market existed for such investments and may differ materially from the values the Fund may ultimately realize. Further, such investments may be subject to legal and other restrictions on resale or otherwise are less liquid than publicly traded securities.
For the Six Months Ended ended September 30, 2011, there were no transfers between Levels 1, 2 and 3.
A summary of the levels for the Funds’ investments as of September 30, 2011 is included with the Funds’ schedules of investments.
Federal Taxes
The Funds’ policy is to comply with the requirements of the Internal Revenue Code applicable to regulated investment companies and to distribute all of its taxable income to shareholders. The Funds have recorded in their financial statements the full benefit of their tax positions taken in connection with the RIC qualification and distribution requirements of the RIC. Therefore, no income tax provision is required. Also, in order to avoid the payment of any federal excise taxes, the Funds will distribute substantially all of their net investment income and net realized gains on a calendar year basis.
Management has analyzed the Funds’ tax positions taken in federal tax returns for all open tax years and has concluded that as of Sep-tember 30, 2011, no provision for income tax would be required in the Funds’ financial statements. The Funds’ federal and state income and federal excise returns for the 2008, 2009, and 2010 tax years for which the applicable statutes of limitations have not expired remain subject to examination by the Internal Revenue Service and state departments of revenue.
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42 | | SIT MUTUAL FUNDS SEMI-ANNUAL REPORT |
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NOTES TO FINANCIAL STATEMENTS (Unaudited) | | |
Six Months Ended September 30, 2011 (Continued) | | |
At September 30, 2011, the gross unrealized appreciation (depreciation) on investments and cost of securities on a tax basis for federal income tax purposes were as follows:
| | | | | | | | | | | | | | |
| | Unrealized Appreciation | | | Unrealized Depreciation | | | Net Unrealized Appreciation (Depreciation) | | Cost of Securities on a Tax Basis | |
| | | | |
U.S. Government Securities | | | $39,729,443 | | | | ($4,176,450) | | | $35,552,993 | | | $1,346,934,618 | |
Tax-Free Income | | | 3,972,578 | | | | (25,089,983) | | | (21,117,405) | | | 166,354,915 | |
Minnesota Tax-Free Income | | | 8,594,025 | | | | (3,795,279) | | | 4,798,746 | | | 298,799,044 | |
Net investment income and net realized gains may differ for financial statement and tax purposes. The character of distributions made during the year for net investment income or net realized gains may also differ from its ultimate characterization for tax purposes. The tax character of distributions paid during the fiscal years ended March 31, 2011 and 2010 were as follows:
| | | | | | | | | | | | | | | | |
Year Ended March 31, 2011: | | | | | | | | | | | | | | | | |
| | Ordinary Income | | | Tax-Exempt Income | | | Long Term Capital Gain | | | Total | |
| | | | |
U.S. Government Securities | | | $26,999,851 | | | | — | | | | $271,533 | | | | $27,271,384 | |
Tax-Free Income* | | | 49,497 | | | | $7,034,048 | | | | — | | | | 7,083,545 | |
Minnesota Tax-Free Income* | | | 29,469 | | | | 12,812,808 | | | | — | | | | 12,842,277 | |
* 99.3% and 99.8% of dividends were derived from interest on tax-exempt securities, on the Tax-Free Income and Minnesota Tax-Free Income Funds, respectively. | |
| | | | |
Year Ended March 31, 2010: | | | | | | | | | | | | | | | | |
| | Ordinary Income | | | Tax-Exempt Income | | | Long Term Capital Gain | | | Total | |
| | | | |
U.S. Government Securities | | | $20,847,075 | | | | — | | | | — | | | | $20,847,075 | |
Tax-Free Income | | | — | | | | $7,118,383 | | | | — | | | | 7,118,383 | |
Minnesota Tax-Free Income | | | — | | | | 12,192,570 | | | | — | | | | 12,192,570 | |
As of March 31, 2011, the components of distributable earnings on a tax basis were as follows:
| | | | | | | | | | | | | | | | |
| | Undistributed Ordinary Income | | | Undistributed Tax-Exempt Income | | | Accumulated Gain (Loss) | | | Unrealized Appreciation (Depreciation) | |
| | | | |
U.S. Government Securities | | | $91,359 | | | | — | | | | ($671,163) | | | | $27,530,686 | |
Tax-Free Income | | | — | | | | $115,774 | | | | (26,123,413) | | | | (30,780,034) | |
Minnesota Tax-Free Income | | | — | | | | 173,748 | | | | (8,307,720) | | | | (11,123,740) | |
Net capital loss carryovers and post-October capital losses, if any, as of March 31, 2011, are available to offset future realized capital gains and thereby reduce future capital gains distributions. The net capital loss carryovers and the post-October capital losses deferred as of March 31, 2011, were as follows:
| | | | | | | | | | | | | | | | | | | | |
| | Capital Loss Carryover Expiring in: | | | Net Capital Loss Carryover | | | Post-October Capital Loss Deferral | | | Accumulated Capital and Other Losses | |
| | | | | | | |
| | 2012 | | | 2013-2018 | | | | |
| | | | |
U.S. Government Securities | | | — | | | | — | | | | — | | | | $671,163 | | | | $671,163 | |
Tax-Free Income | | | $1,461,177 | | | | $22,851,389 | | | | $24,312,566 | | | | 1,810,847 | | | | 26,123,413 | |
Minnesota Tax-Free Income | | | 403,028 | | | | 7,904,692 | | | | 8,307,720 | | | | — | | | | 8,307,720 | |
| | |
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NOTES TO FINANCIAL STATEMENTS (Unaudited) | | |
Six Months Ended September 30, 2011 (Continued) | | |
The Regulated Investment Company Modernization Act of 2010 (“Act”) was enacted on December 22, 2010. In general, the provisions of the Act will be effective for Funds with fiscal years ending after December 22, 2011. Under the Act, a Fund will be permitted to carry forward capital losses for an unlimited period. However, any losses incurred during those future taxable years will be required to be utilized prior to the losses incurred in pre-enactment taxable years. As a result of this ordering rule, pre-enactment capital loss carry forwards may be more likely to expire unused. Additionally, post-enactment capital losses that are carried forward will retain their character as either short-term or long-term capital losses, and will not be considered exclusively short-term as under previous law.
Distributions
Distributions to shareholders are recorded as of the close of business on the record date. Such distributions are payable in cash or reinvested in additional shares of the Funds’ capital stock. Distributions from net investment income are declared daily and paid monthly for the Funds. Distributions from net realized gains, if any, will be made annually for each of the Funds.
Use of Estimates
The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported results. Actual results could differ from those estimates.
Guarantees and Indemnifications
Under each Fund’s organizational documents, its officers and directors are indemnified against certain liabilities arising out of the performance of their duties to each Fund. In addition, certain of each Fund’s contracts with its service providers contain general indemnification clauses. Each Fund’s maximum exposure under these arrangements is unknown since the amount of any future claims that may be made against each Fund cannot be determined and each Fund has no historical basis for predicting the likelihood of any such claims.
(3) | Investment Security Transactions |
The cost of purchases of and proceeds from sales and maturities of investment securities, other than short-term securities, for the Six Months Ended ended September 30, 2011, were as follows:
| | | | | | | | | | | | | | | | |
| | Purchases | | | Proceeds | |
| | U.S. Government | | | Other | | | U.S. Government | | | Other | |
U.S. Government Securities | | | $629,040,249 | | | | — | | | | $200,346,521 | | | | — | |
Tax-Free Income | | | — | | | | $25,155,912 | | | | — | | | | $28,580,462 | |
Minnesota Tax-Free Income | | | — | | | | 27,752,115 | | | | — | | | | 28,155,278 | |
(4) | Affiliated Fees and Transactions |
Investment Adviser
The Funds each have entered into an investment management agreement with Sit Investment Associates Inc. (SIA), under which SIA manages the Funds’ assets and provides research, statistical and advisory services, and pays related office rental, executive expenses and executive salaries. SIA also is obligated to pay all of the Funds’ expenses (excluding extraordinary expenses, stock transfer taxes, interest, brokerage commissions, and other transaction charges relating to investing activities). The fee for investment management and advisory services is based on the average daily net assets of the Funds at the annual rate of:
| | | | |
| | Average Daily Net Assets | | |
| | | | |
U.S. Government Securities | | 0.80% | | |
Tax-Free Income | | 0.80%* | | |
Minnesota Tax-Free Income | | 0.80% | | |
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44 | | SIT MUTUAL FUNDS SEMI-ANNUAL REPORT |
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NOTES TO FINANCIAL STATEMENTS (Unaudited) | | |
Six Months Ended September 30, 2011 (Continued) | | |
* For the period October 1, 1993, through December 31, 2011, the Adviser has voluntarily agreed to limit the flat monthly fee (and, thereby, all Fund expenses, except extraordinary expenses, interest, brokerage commissions and other transaction charges not payable by the Adviser) of the Tax-Free Income Fund to an annual rate of 0.70% of the Fund’s average daily net assets in excess of $250 million and 0.60% of the Fund’s average daily net assets in excess of $500 million. After December 31, 2011, this voluntary fee waiver will be discontinued by the Adviser.
Transactions with affiliates
The investment adviser, affiliates of the investment adviser, directors and officers of the Funds as a whole owned the following shares as of September 30, 2011:
| | | | | | | | |
| | Shares | | | % Shares Outstanding | | |
| | | | | |
U.S. Government Securities | | | 2,399,763 | | | 1.9 | | |
Tax-Free Income | | | 1,219,516 | | | 7.5 | | |
Minnesota Tax-Free Income | | | 1,259,180 | | | 4.2 | | |
Management has evaluated the impact of all subsequent events on the Funds through the date the financial statements were issued, and has determined that there were no subsequent events that would require disclosure in or adjustments to the financial statements.
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EXPENSE EXAMPLE (Unaudited) | | |
As a shareholder of the Funds, you incur two types of costs: (1) transaction costs, including redemption fees and (2) ongoing costs, including management fees; and other Fund expenses. This Example is 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.
The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period April 1, 2011 to September 30, 2011.
Actual Expenses
The first line of the following table 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 Period” 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 the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the 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 Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as redemption fees. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs (redemption fees) were included, your costs would have been higher.
| | | | | | | | | | | | |
| | Beginning Account Value (4/1/11) | | | Ending Account Value (9/30/11) | | | Expenses Paid During Period* (4/1/11- 9/30/11) | |
U.S. Government Securities Fund | |
Actual | | | $1,000 | | | | $1,019.40 | | | | $4.05 | |
Hypothetical | | | $1,000 | | | | $1,021.06 | | | | $4.05 | |
| | | | | | | | | | | | |
Tax-Free Income Fund | |
Actual | | | $1,000 | | | | $1,080.10 | | | | $4.17 | |
Hypothetical | | | $1,000 | | | | $1,021.06 | | | | $4.05 | |
| | | | | | | | | | | | |
Minnesota Tax-Free Income Fund | |
Actual | | | $1,000 | | | | $1,079.60 | | | | $4.17 | |
Hypothetical | | | $1,000 | | | | $1,021.06 | | | | $4.05 | |
*Expenses are equal to the Funds’ annualized expense ratio of 0.80% multiplied by the average account value over the period, multiplied by 183/365 (to reflect the one-half year period.)
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46 | | SIT MUTUAL FUNDS SEMI-ANNUAL REPORT |
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ADDITIONAL INFORMATION (Unaudited) | | |
PROXY VOTING
Each fund follows certain policies and procedures for voting proxies for securities held in each portfolio. A description of the Funds’ proxy voting policies and procedures is available without charge upon request by calling the Funds at 1-800-332-5580.
Information regarding how each Fund voted proxies relating to its portfolio securities during the most recent twelve-month period ended June 30 is available without charge upon request by calling the Funds at 1-800-332-5580, and is available on the U.S. Securities and Exchange Commission’s website at www.sec.gov.
AVAILABILITY OF QUARTERLY PORTFOLIO SCHEDULES
The Funds’ file their complete schedules of portfolio holdings with the U.S. Securities and Exchange Commission (SEC) for the first and third quarters of each fiscal year on Form N-Q. The Funds’ Form N-Qs are available without charge upon request by calling the Funds at 1-800-332-5580 and are available on the SEC’s website at www.sec.gov. In addition, the Funds’ Form N-Qs may be reviewed and copied at the SEC’s Public Reference Room in Washington, DC. Information on the operation of the Public Reference Room may be obtained by calling 1-202-551-8090.
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48 | | SIT MUTUAL FUNDS SEMI-ANNUAL REPORT |
![LOGO](https://capedge.com/proxy/N-CSRS/0001193125-11-325489/g260481g16w09.jpg)
Item 2: Code of Ethics. Not applicable to Semi-Annual Report.
Item 3: Audit Committee Financial Expert. Not applicable to Semi-Annual Report.
Item 4: Principal Accountant Fees and Services. Not applicable to Semi-Annual Report.
Item 5: Audit Committee of Listed Registrants.
Not applicable to open-end investment companies.
Item 6: Schedule of Investments.
The schedule of investments is included as part of the report to shareholders filed under Item 1 of this Form.
Item 7: Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.
Not applicable to open-end investment companies.
Item 8: Portfolio Managers of Closed-End Management Companies.
Not applicable to open-end investment companies.
Item 9: Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.
Not applicable to open-end investment companies.
Item 10. Submission of Matters to a vote of Security Holders.
There have been no material changes to the procedures by which shareholders may recommend nominees to the registrant’s board of directors.
Item 11: Controls and Procedures -
(a) Based on their evaluation of the Registrant’s Disclosure Controls and Procedures as of a date within 90 days of the Filing Date, the Registrant’s Chairman and Treasurer have determined that the Disclosure Controls and Procedures (as defined in Rule 30a-2(c) under the Act) are designed to ensure that information required to be disclosed by the Registrant is recorded, processed, summarized and reported by the filing Date, and that information required to be disclosed in the report is communicated to the Registrant’s management, as appropriate, to allow timely decisions regarding required disclosure.
b) There were no changes in the Registrant’s internal control over financial reporting as defined in Rule 30a-3(d) under the Act) that occurred during the Registrant’s last fiscal half-year that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting.
Item 12: Exhibits:
(a) The following exhibits are attached to this Form N-CSR:
(2) A separate certification for each principal executive and principal financial officer of the registrant as required by Rule 30a-2(a) under the Act (17 CFR 270.30a-2) (certification required by Section 302 of the Sarbanes-Oxley Act of 2002).
(b) Certification required by Rule 30a-2(b) under the Act (certification required by Section 906 of the Sarbanes-Oxley Act of 2002).
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.
SIT MUTUAL FUNDS II, INC.
| | | | | | |
By (Signature and Title) | | | | | | /s/ Paul E. Rasmussen |
| | | | | | Paul E. Rasmussen |
| | | | | | Vice President, Treasurer |
Date November 30, 2011
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
| | | | | | |
By (Signature and Title) | | | | | | /s/ Paul E. Rasmussen |
| | | | | | Paul E. Rasmussen |
| | | | | | Vice President, Treasurer |
| | | |
Date November 30, 2011 | | | | | | |
| | | |
By (Signature and Title) | | | | | | /s/ Roger J. Sit |
| | | | | | Roger J. Sit |
| | | | | | Chairman |
| | | |
Date November 30, 2011 | | | | | | |