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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-05009
COLORADO BONDSHARES — A TAX EXEMPT FUND
(Exact name of registrant as specified in charter)
1200 17TH STREET, SUITE 850, DENVER, COLORADO 80202-5808
(Address of principal executive offices) (Zip code)
(Address of principal executive offices) (Zip code)
FRED R. KELLY, JR. 1200 17TH STREET, SUITE 850, DENVER, COLORADO 80202-5808
(Name and address of agent for service)
(Name and address of agent for service)
Registrant’s telephone number, including area code: 303-572-6990
Date of fiscal year end: 09/30/2006
Date of reporting period: 03/31/2006
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Item 1. REPORTS TO STOCKHOLDERS.
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![(Colorado BondShares Logo)](https://capedge.com/proxy/N-CSRS/0001035704-06-000404/d36517d3651700.gif)
May 26, 2006
Dear Shareholders,
I am proud to present the unaudited financial results of Colorado BondShares for the semi-annual period ended March 31, 2006. Detailed information is available in the pages that follow but here are some highlights.
• | As of May 12, 2006, Morningstar ranked the Fund #1 in the 1, 3, 5 and 10 year total return performance in the “Intermediate Single State Tax-Exempt” category. Earlier in the year, the Fund was ranked third in that same comparison. | |
• | Total net assets surpassed the $400 million mark for the first time in the Fund’s history. | |
• | Net asset value per share reached its highest point in the last six years. | |
• | Income, while down slightly from the previous year, is expected to catch up in the next six months. In fact, interest rate increases affecting our short term holdings increased by 82 basis points during the month of April. These holdings represent approximately 36% of the portfolio and favorably contributed to our income stream. | |
• | Capital gains which factor into the total return computation were limited to $0.01/share during the period. However, recognition of realized capital gains for tax purposes is usually evidenced in the second half of the year. | |
• | Expenses for the Fund were up by .002% compared with the last two years but this is the result of accruals which are expected to equalize as the year progresses. A small increase in expenses may be unavoidable due to costs associated with additional regulatory requirements. | |
• | The portfolio turnover rate increased from 4.40% to 6.50% primarily due to bond calls. | |
• | Future prospects for current bond holdings in the portfolio remain very positive despite concerns voiced in the media over possible slowing in the residential housing sector. |
Overall, the news is good. I appreciate your ongoing confidence in the Fund and our top flight staff stands ready to answer any questions that you may have.
Sincerely, | |
![]() | |
Fred R. Kelly, Jr. | |
Portfolio Manager |
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Officers and Trustees
George N. Donnelly, Chairman of the Board of Trustees | |
Bruce G. Ely, Trustee | |
James R. Madden, Trustee | |
Andrew B. Shaffer, President, Secretary, Treasurer and Trustee Fred R. Kelly, Jr., Portfolio Manager |
Investment Adviser
Freedom Funds Management Company |
Transfer, Shareholder Servicing, and Dividend
Disbursing Agent
Disbursing Agent
Freedom Funds Management Company |
Distributor
SMITH HAYES Financial Services Corporation |
Custodian of Portfolio Securities
Wells Fargo Investments and Trust, Wells Fargo Bank, N.A. |
Independent Registered Public Accounting
Firm
Firm
Anton Collins Mitchell LLP |
Legal Counsel
Kutak Rock LLP |
This report is submitted for the general information of the shareholders of Colorado BondShares — A Tax-Exempt Fund. This report must be preceded or accompanied by a Prospectus of the Fund. The prospectus contains information concerning the investment policies and expenses of the portfolio in addition to other pertinent information. Shares of Colorado BondShares — A Tax-Exempt Fund are not deposits or obligations of any bank, are not guaranteed by any bank, are not insured by the FDIC or any other agency, and involve investment risks, including possible loss of the principal amount invested.
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FUND EXPENSES (Unaudited)
As a shareholder of Colorado BondShares — A Tax-Exempt Fund (the “Fund”), you can incur two types of costs:
• | Sales charges (front loads) on fund purchases and | |
• | Ongoing fund costs, including management fees, administrative services, and other fund expenses. All mutual funds have operating expenses. Operating expenses, which are deducted from a fund’s gross income, directly reduce the investment return of a fund. |
The following example is intended to help you understand the ongoing costs (in dollars) of investing in the Fund and compare these costs with the ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 made at the beginning of the period shown and held for the entire period.
Actual Expenses
The first line of the table below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number given in the first line under the heading “Expenses Paid During Period” to estimate the expenses you paid on your account during the 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 sales charges (loads), redemption fees, or exchange 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 were included, your costs would have been higher.
Beginning Account | Ending Account | Expenses Paid | ||||||||||
Colorado BondShares – A Tax-Exempt Fund | Value 09/30/05 | Value 03/31/06 | During Period* | |||||||||
Actual Fund Return | $ | 1,000.00 | $ | 1,023.20 | $ | 3.03 | ||||||
Hypothetical (5% Annual Return Before Expenses) | $ | 1,000.00 | $ | 1,022.00 | $ | 3.02 |
*The expenses shown in this table are equal to the Fund’s annualized expense ratio of .60%, multiplied by the average account value over the period, multiplied by 182/365 to reflect the one-half year period. You can find more information about the Fund’s expenses in the Financial Statements section of this report. For additional information on operating costs please see the Fund’s prospectus.
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CREDIT QUALITY
Colorado BondShares — A Tax-Exempt Fund
Based on a Percentage of Total Net Assets as of March 31, 2006
![LOGO](https://capedge.com/proxy/N-CSRS/0001035704-06-000404/d36517d3651702.gif)
SECTOR BREAKDOWN
Colorado BondShares — A Tax-Exempt Fund
Based on a Percentage of Total Net Assets as of March 31, 2006
![LOGO](https://capedge.com/proxy/N-CSRS/0001035704-06-000404/d36517d3651703.gif)
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Colorado BondShares
A Tax-Exempt Fund
Schedule of Investments (unaudited)
March 31, 2006
Face Amount | Market Value | |||||||||||
Colorado Municipal Bonds — 83.2% | ||||||||||||
1,000,000 | Adonea Metropolitan District No. 2 G.O. LTD Tax (Convertible to Unlimited Tax) Series 2005A, 6.125% to yield 6.25% due 12/1/2025 | $ | 1,019,250 | |||||||||
2,175,000 | Antelope Heights Metropolitan District (Town of Parker) G.O. Series 2003, 8.00% due 12/1/2023 | 2,393,631 | ||||||||||
2,000,000 | Arista Metropolitan District Special Revenue Bond Series 2005, 6.75% due 12/1/2035 | 2,134,300 | ||||||||||
950,000 | Aurora Multi-Family Housing Revenue (River Falls Project) Series 1999A, 5.70% due 7/1/2029 | 697,196 | ||||||||||
306,040 | Aurora Centretech Metropolitan District G.O. Refunding and Improvement Series 1994, 6.00% due 12/1/2023(b) | 464,642 | ||||||||||
2,960,000 | BNC Metropolitan District No. 1 G.O. LTD Tax (Convertible to Unlimited Tax) Series 2004, 8.00% due 6/1/2028 | 2,960,000 | ||||||||||
1,000,000 | Beacon Pointe Metropolitan District G.O. LTD Tax (Convertible to Unlimited Tax) Series 2005A, 6.125% to yield 6.25% due 12/1/2025 | 985,550 | ||||||||||
700,000 | Beebe Draw Farms Metropolitan District G.O. Series 1998, 7.00% due 10/1/2018 | 685,209 | ||||||||||
5,095,000 | Belle Creek Metropolitan District No. 1 G.O. LTD Tax Series 2000, 8.00% due 12/1/2020 | 5,277,095 | ||||||||||
2,250,000 | Black Hawk (City of) Device Tax Revenue Series 1998, 5.625% due 12/1/2021 | 2,279,948 | ||||||||||
700,000 | Boulder County Variable Rate Demand Revenue (YCMA of Boulder Valley Project) Series 2006, 3.19% due 2/1/2031(h) | 700,000 | ||||||||||
1,845,000 | Bradburn Metropolitan District No. 3 G.O. LTD Tax Series 2003, 7.50% due 12/1/2033 | 1,845,000 | ||||||||||
6,405,000 | Bromley Park Metropolitan District No. 3 G.O. LTD Tax Exchange Series 2001A & B, 8.00% due 12/1/2019-22 | 6,703,384 | ||||||||||
6,000,000 | Bromley Park Metropolitan District No. 2 G.O. Series 2002B, 8.00% due 12/1/2022 | 6,128,760 | ||||||||||
4,730,000 | Bromley Park Metropolitan District No. 2 G.O. Series 2003, 8.00% due 12/01/2028 | 4,814,762 | ||||||||||
5,000,000 | Broomfield Village Metropolitan District No. 2 Special Revenue Refunding Series 2005B, 3.42% due 7/1/2032(h) | 4,998,700 | ||||||||||
9,365,000 | Broomfield Village Metropolitan District No. 2 Special Revenue Refunding Series 2003B, 3.92% due 7/1/2032(h) | 9,365,000 | ||||||||||
500,000 | Castle Oaks Metropolitan District G.O. LTD Tax Series 2005, 6.00% due 12/1/2025 | 523,855 |
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Colorado BondShares
A Tax-Exempt Fund
Schedule of Investments (unaudited) — (Continued)
Face Amount | Market Value | |||||||||||
Colorado Municipal Bonds — (Continued) | ||||||||||||
25,000 | Castle Rock (Town of) G.O. Series 1988-2, 10.375% due 12/1/2008 | $ | 27,672 | |||||||||
565,000 | Castle Rock (Town of) LID Series 1988-2D Special Assessment, 9.25%-10.375% due 12/1/2008(i) | 39,550 | ||||||||||
2,045,000 | Central Platte Valley Metropolitan District Special Obligation Revenue Series 1998, 7.00% due 12/1/2017(b) | 2,157,945 | ||||||||||
2,009,520 | Colorado Centre Metropolitan District LTD Tax and Special Revenue Series 1992A, principal only, 0.00% due 1/1/2027(a)(e)(i) | 20,095 | ||||||||||
2,008,335 | Colorado Centre Metropolitan District LTD Tax and Special Revenue Series 1992A, interest only, 9.00% due 1/1/2027(f)(h)(i) | 1,104,584 | ||||||||||
6,465,662 | Colorado Centre Metropolitan District LTD Tax and Special Revenue Series 1992B, 0.00% due 1/1/2032(a)(g)(i) | 161,642 | ||||||||||
3,490,000 | Colorado Educational & Cultural Facilities Authority Charter School Revenue (Liberty Common) Series 1999, 6.95% due 8/15/2019(b) | 3,719,921 | ||||||||||
880,000 | Colorado Educational & Cultural Facilities Authority Charter School Revenue (Crown Pointe Academy) Series 2000, 7.25% due 7/15/2025 | 922,513 | ||||||||||
1,185,000 | Colorado Educational & Cultural Facilities Authority Private School Revenue (Escuela Tlatelolco Project) Series 2000A, 8.50% due 6/1/2022 | 1,190,712 | ||||||||||
440,000 | Colorado Educational & Cultural Facilities Authority Charter School Revenue (Elbert County) Series 2000A, 8.00% due 6/1/2010(b) | 477,792 | ||||||||||
5,410,000 | Colorado Educational & Cultural Facilities Authority Student Housing Revenue (Inn at Auraria LLC Project) Series 2005, 5.875% due 7/1/2023 | 5,360,282 | ||||||||||
2,080,000 | Colorado Educational & Cultural Facilities Authority Charter School Revenue (Belle Creek Charter School Project) Series 2002A, 7.625% to yield 7.75% due 3/15/2032 | 2,156,294 | ||||||||||
1,100,000 | Colorado Educational & Cultural Facilities Authority Revenue Variable Rate (Denver Seminary Project) Series 2004, 3.19% due 7/8/2034(h) | 1,100,000 | ||||||||||
6,000,000 | Colorado Educational & Cultural Facilities Authority Revenue Variable Rate (Colorado Christian University Project) Series 2004, 3.24% due 7/1/2034(h) | 6,000,000 | ||||||||||
785,000 | Colorado Educational & Cultural Facilities Authority Charter School Revenue (Elbert County) Series 2004, 7.375% to yield 7.45% due 3/1/2035 | 777,825 | ||||||||||
5,150,000 | Colorado Educational & Cultural Facilities Authority Revenue Variable Rate (Denver Art Museum Project) Series 2004, 3.19% due 1/1/2034(h) | 5,150,000 | ||||||||||
5,275,000 | Colorado Health Facilities Authority Variable Rate Demand Revenue Refunding (Craig Hospital Project) Series 2003, 3.19% due 12/1/2020(h) | 5,275,000 |
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Colorado BondShares
A Tax-Exempt Fund
Schedule of Investments (unaudited) — (Continued)
Face Amount | Market Value | |||||||||||
Colorado Municipal Bonds — (Continued) | ||||||||||||
3,655,000 | Colorado Housing & Finance Authority Economic Development Revenue (Micro Business Development Corporation Project) Series 2005, 6.75% due 12/1/2010 | $ | 3,650,211 | |||||||||
11,670,000 | Colorado Housing & Finance Authority Adjustable Rate Class I Series A-1, 3.20% due 10/1/2030(h) | 11,670,000 | ||||||||||
6,100,000 | Colorado Housing & Finance Authority Variable Rate Class I Series A-2, 3.20% due 4/1/2020(h) | 6,100,000 | ||||||||||
11,255,000 | Colorado Housing & Finance Authority Single Family Mortgage Class I Adjustable Rate 2002 Series A-3, 3.20% due 11/1/2021(h) | 11,255,000 | ||||||||||
18,770,000 | Colorado Housing & Finance Authority Adjustable Rate Multi-Family Insured Mortgage Revenue 2002 Series AA, 3.20% due 10/1/2030(h) | 18,770,000 | ||||||||||
11,740,000 | Colorado Housing & Finance Authority Variable Rate Multi-Family Class I Series C4, 3.20% due 10/1/2032(h) | 11,740,000 | ||||||||||
6,000,000 | Colorado Housing & Finance Authority Adjustable Rate Class I Series 2002B-3, 3.20% due 10/1/2036(h) | 6,000,000 | ||||||||||
3,055,000 | Colorado School of Mines Development Corporation Refunding Variable Rate Demand Series 2005, 3.34% due 9/1/2026(h) | 3,055,000 | ||||||||||
1,005,000 | Colorado Springs Variable Rate Demand Obligation (Pikes Peak Mental Health Center Select Services, Inc. Project) Series 2003, 3.19% due 3/15/2023(h) | 1,005,000 | ||||||||||
5,000,000 | Commerce City Northern Infrastructure General Improvement District G.O. Series 2006, 3.20% due 12/1/2028(h) | 5,000,000 | ||||||||||
2,455,000 | Conservatory Metropolitan District G.O. Series 2003, 7.50% due 12/1/2027 | 2,613,863 | ||||||||||
3,725,000 | Conservatory Metropolitan District G.O. Series 2005, 6.75% due 12/1/2034 | 3,725,000 | ||||||||||
1,025,000 | Cotton Ranch Metropolitan District G.O. Series 1998A, 7.25% due 12/15/2017 | 1,032,657 | ||||||||||
3,445,000 | Cotton Ranch Metropolitan District G.O. LTD Tax Refunding Series 1999A, 8.00% due 12/15/2017(h) | 3,443,967 | ||||||||||
2,100,000 | Cottonwood Water and Sanitation District Refunding Series 1996A, 7.60% due 12/1/2012 | 2,163,714 | ||||||||||
1,865,000 | Denver (City and County of) Subordinate Multi-Family Housing Revenue (Capitol Heights Apartments) Series 1999C, 8.00% due 5/1/2032 | 1,750,974 | ||||||||||
2,770,000 | Denver (City and County of) Single Family Mortgage Revenue (Metro Mayors Caucus) Series 2001A, 6.30% due 11/1/2032 | 2,801,439 | ||||||||||
13,280,000 | Denver (City and County of) Special Facilities Airport Revenue (United Airlines Project) Series 1992A, 6.875% due 10/1/2032(a) | 13,529,000 | ||||||||||
775,000 | Denver West Metropolitan District Series 1997B, 5.70% due 12/1/2017 | 785,439 |
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Colorado BondShares
A Tax-Exempt Fund
Schedule of Investments (unaudited) — (Continued)
Face Amount | Market Value | |||||||||||
Colorado Municipal Bonds — (Continued) | ||||||||||||
415,000 | Eagle Riverview Affordable Housing Corporation Multi-Family Housing Project Revenue Series 1999B, 7.00% due 7/1/2029 | $ | 371,429 | |||||||||
1,130,000 | Eaglebend Affordable Housing Multi-Family Housing Project Series B, 7.40% due 7/1/2021 | 1,141,131 | ||||||||||
7,500,000 | East Cherry Creek Valley Water and Sanitation District Variable Rate Water Revenue Series 2004, 3.00% due 11/15/2023(h) | 6,000,000 | ||||||||||
5,000,000 | Ebert Metropolitan District Securitization Trust ,Class A2 Certificates, Series 2004-S1, 3.32% due 12/1/2034(h) | 5,000,000 | ||||||||||
1,725,000 | Ebert Metropolitan District Securitization Trust Class A2 Certificates, Series 2005-S1, 3.32% due 12/1/2009(h) | 1,725,000 | ||||||||||
90,000 | El Paso County LID 85-2 Special Assessment Refunding Series 1988, 8.875%-9.00% due 9/1/2000(a) | 9,000 | ||||||||||
39,627 | Equi-Mor Holdings, Inc. Class A Pass-Through Certificates Series 1999A, 7.50% due 4/5/2018 | 39,627 | ||||||||||
620,000 | Fort Lupton Golf Course Revenue Anticipation Warrants Series 1996A, 8.50% due 12/15/2015(a) | 124,000 | ||||||||||
1,900,000 | Fronterra Village Metropolitan District G.O. Series 2001, 8.00% due 12/1/2021 | 1,929,982 | ||||||||||
4,550,000 | Fronterra Village Metropolitan District No. 2 G.O. Series 2003, 8.00% due 12/1/2023 | 4,641,319 | ||||||||||
500,000 | Galleria Metropolitan District G.O. Series 1999, 7.25% to yield 7.375% due 12/1/2019(b) | 557,925 | ||||||||||
920,000 | Gateway Village GID Subordinate LTD Tax G.O. Series 1999, 7.00% due 6/1/2019(b) | 972,136 | ||||||||||
955,000 | Gateway Village GID G.O. Refunding and Improvement Series 1998, 6.00% due 12/1/2018(b) | 997,096 | ||||||||||
795,000 | Gateway Village GID G.O. Refunding and Improvement Series 1998, 6.00% due 12/1/2018 | 770,276 | ||||||||||
5,750,000 | Grand Elk Ranch GID LTD Tax G.O. Series 2003, 8.00% due 12/1/2023 | 5,763,225 | ||||||||||
705,000 | Greatrock North Water and Sanitation District LTD Tax G.O. Series 1998, 8.00% due 12/1/2017 | 712,769 | ||||||||||
1,000,000 | High Plains Metropolitan District G.O. Series 2005A, 6.125% to yield 6.25% due 12/1/2025 | 985,550 | ||||||||||
135,000 | Idledale Colorado Fire Protection District G.O. Series 1993, 5.65%-5.80% due 12/15/2006-07 | 135,402 | ||||||||||
165,000 | Las Animas (City of) Water G.O. Series 1989, 8.60% due 12/1/2009 | 167,566 |
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Colorado BondShares
A Tax-Exempt Fund
Schedule of Investments (unaudited) — (Continued)
Face Amount | Market Value | |||||||||||
Colorado Municipal Bonds — (Continued) | ||||||||||||
585,000 | Littleton (The) Riverfront Authority Tax Increment Revenue Refunding Series 1999A-1, 8.00% due 12/1/2008 | $ | 591,716 | |||||||||
6,245,000 | Maher Ranch Metropolitan District No. 4 (Town of Castle Rock) G.O. LTD Tax Series 2003, 7.80% due 12/1/2027 | 6,479,750 | ||||||||||
5,880,000 | Moffat County Pollution Control Revenue Tri-State Generation and Transmission Series 1984, 3.20% due 7/1/2010(h) | 5,880,000 | ||||||||||
260,000 | Mount Carbon Metropolitan District Revenue Refunding Series A, 7.00% due 6/1/2043 | 262,051 | ||||||||||
2,000,000 | Mount Carbon Metropolitan District Revenue Refunding LTD Tax Series B, 7.00% due 6/1/2043 | 2,015,780 | ||||||||||
565,000 | Mount Carbon Metropolitan District Revenue Refunding Series C, 8.00% due 6/1/2043(e) | 40 | ||||||||||
1,500,000 | Neu Towne Metropolitan District G.O. (Limited Tax Convertible to Unlimited Tax) Series 2004, 7.20% due 12/1/2023 | 1,500,000 | ||||||||||
1,275,000 | North Pines Metropolitan District G.O. LTD Tax Series 2000, 9.00% due 12/1/2020 | 1,299,722 | ||||||||||
2,785,000 | North Range Village Metropolitan District G.O. LTD Tax Series 2000, 8.00% due 12/1/2020 | 2,859,387 | ||||||||||
1,365,000 | North Range Village Metropolitan District G.O. LTD Tax Series 2001, 4.9%-8.5% currently 8.30% due 12/1/2021(h) | 1,522,903 | ||||||||||
1,000,000 | Northwest Metropolitan District No. 3 G.O. (Limited Tax Convertible to Unlimited Tax) Series 2005, 6.125% due 12/1/2025 | 1,029,660 | ||||||||||
1,520,000 | Parker Jordan Metropolitan District G.O. Series 1998A, 6.25% due 12/1/2017(b) | 1,602,779 | ||||||||||
4,450,000 | Parker Jordan Metropolitan District G.O. Series 2000, 7.25% to yield 7.375% due 12/1/2019(b) | 4,978,438 | ||||||||||
5,940,000 | Rendezvous Residential Metropolitan District G.O. LTD Tax Series 2002, 8.00% due 12/1/2021 | 5,940,000 | ||||||||||
11,501,000 | Revenue Bond Certificate Series Trust 2004 Variable Rate Senior Certificates (Castlegate 1) 3.62% due 1/1/2028(h) | 11,501,000 | ||||||||||
3,100,000 | Revenue Bond Certificate Series Trust 2004 Variable Rate Senior Certificates (Centennial East Apartments) 3.62% due 12/1/2033(h) | 3,100,000 | ||||||||||
970,000 | Riverdale Peaks II Metropolitan District G.O. (Limited Tax Convertible to Unlimited Tax) Series 2005, 6.40% due 12/1/2025 | 1,019,101 | ||||||||||
1,135,000 | Riverdale Peaks II Metropolitan District G.O. (Limited Tax Convertible to Unlimited Tax) Series 2005, 6.50% due 12/1/2035 | 1,190,479 |
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Colorado BondShares
A Tax-Exempt Fund
Schedule of Investments (unaudited) — (Continued)
Face Amount | Market Value | |||||||||||
Colorado Municipal Bonds — (Continued) | ||||||||||||
1,375,000 | Routt County LID Special Improvement District Special Assessment #2-1 Series A, 6.50% to yield 6.59% due 8/1/2024 | $ | 1,357,606 | |||||||||
148,147 | Roxborough Village Metropolitan District Series 1993A, 9.00% due 12/31/2016(i) | 149,111 | ||||||||||
335,834 | Roxborough Village Metropolitan District Series 1993B, principal only, 0.00% due 12/31/2021(e)(i) | 180,481 | ||||||||||
367,251 | Roxborough Village Metropolitan District Series 1993B, interest only, 10.41% due 12/31/2042(f)(i) | 56,924 | ||||||||||
1,975,000 | Sand Creek Metropolitan District G.O. LTD Tax Series 1997, 7.125% due 12/1/2016 | 2,111,374 | ||||||||||
840,000 | Sand Creek Metropolitan District G.O. LTD Tax Series 1998, 6.625% due 12/1/2017(b) | 902,748 | ||||||||||
2,000,000 | Serenity Ridge Metropolitan District No. 2 Series 2004, 7.375% due 12/1/2024 | 2,000,000 | ||||||||||
1,285,000 | City of Sheridan Colorado G.O. Series 1997A, 7.50% due 12/1/2016 | 1,331,992 | ||||||||||
510,000 | Southlands Metropolitan District No. 1 Unlimited Tax, 6.75% to yield 6.80% due 12/1/2016 | 561,551 | ||||||||||
1,000,000 | Southlands Metropolitan District No. 1 Unlimited Tax, 7.00% to yield 7.05% due 12/1/2024 | 1,102,210 | ||||||||||
2,000,000 | Southlands Metropolitan District No. 1 Unlimited Tax, 7.125% to yield 7.18% due 12/1/2034 | 2,206,960 | ||||||||||
1,000,000 | Southpark Metropolitan District G.O. Refunding Series 1996, 6.60% to yield 6.75% due 12/1/2013 | 1,013,280 | ||||||||||
1,845,000 | Sterling Hills Metropolitan District G.O. LTD Tax Series 1998, 7.75% due 6/1/2018 | 1,914,114 | ||||||||||
3,225,000 | Sterling Hills West Metropolitan District G.O. LTD Tax Series 2001A, 8.00% due 12/1/2019 | 3,400,247 | ||||||||||
3,315,000 | Sterling Hills West Metropolitan District G.O. LTD Tax Series 2001B, 8.00% due 12/1/2021 | 3,562,067 | ||||||||||
3,012,007 | Sterling Hills West Metropolitan District G.O. LTD Tax Series 2004, 7.50% due 12/1/2021 | 2,315,029 | ||||||||||
5,110,000 | Tabernash Meadows Water and Sanitation District G.O. Series 2000, 8.40% due 6/1/2020 | 3,832,500 | ||||||||||
900,000 | Tabernash Meadows Water and Sanitation District G.O. Series 2003, 9.00% due 12/1/2014 | 900,000 | ||||||||||
1,570,000 | Todd Creek Farms Metropolitan District No. 2 LTD Tax G.O. Series 1997, 8.00% due 6/1/2017(b) | 1,658,642 |
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Colorado BondShares
A Tax-Exempt Fund
Schedule of Investments (unaudited) — (Continued)
Face Amount | Market Value | |||||||||||
Colorado Municipal Bonds — (Continued) | ||||||||||||
905,000 | Todd Creek Farms Metropolitan District No. 2 LTD Tax G.O. Series 1999, 7.50% due 12/1/2018(b) | $ | 950,069 | |||||||||
12,185,000 | United Water & Sanitation District Revenue Refunding & Improvement Series 2004A, 6.00% due 12/1/2013 | 12,185,000 | ||||||||||
10,800,000 | United Water & Sanitation District Revenue Refunding & Improvement Series 2004B, 6.00% to yield 6.05% due 12/1/2012 | 10,829,376 | ||||||||||
500,000 | Wheatlands Metropolitan District No. 2 G.O. LTD Tax (Convertible to Unlimited Tax) Series 2005, 6.00% due 12/1/2025 | 520,030 | ||||||||||
500,000 | Wyndham Hill Metropolitan District No. 2 G.O. LTD Tax Series 2005, 6.25% due 12/1/2025 | 519,795 | ||||||||||
Total Colorado Municipal Bonds (cost $330,229,578) | $ | 340,086,718 | ||||||||||
Colorado Capital Appreciation and Zero Coupon — 6.6% | ||||||||||||
28,835,000 | Bromley Park Metropolitan District No. 3 Subordinate Limited Tax G.O. Capital Appreciation Series 2006, 8.00% due 12/15/2031(d) | $ | 3,935,112 | |||||||||
520,000 | Colorado Health Facilities Authority Zero Coupon Retirement Housing Revenue (Liberty Heights Project) 1990 Subordinate Series B, 6.97% due 7/15/2020(b)(d) | 267,368 | ||||||||||
18,719,663 | Cottonwood Water and Sanitation District Capital Appreciation Refunding Second Lien, Series 1998A, 8.00% due 12/1/2027(d) | 3,733,450 | ||||||||||
500,000 | El Paso County School District No. 20 G.O. Refunding Series 1993A, Zero Coupon, 6.10% due 6/15/2008(d) | 460,515 | ||||||||||
8,005,000 | McKay Landing Metropolitan District No. 2 Capital Appreciation Refunding LTD Tax Series B, 7.50% due 12/1/2031(d) | 1,418,966 | ||||||||||
20,515,000 | PV Water & Sanitation Metropolitan District Adams County Capital Appreciation Revenue Series 2006, 6.00% due 12/15/2017 | 10,165,388 | ||||||||||
906,622 | Roxborough Village Metropolitan District Series 1993C, 9.84% due 12/31/2032(d)(i) | 18,132 | ||||||||||
9,415,000 | Silver Peaks Metropolitan District No. 1 Revenue Series 2003, 8.00% due 12/1/2006-12(d) | 7,149,375 | ||||||||||
Total Colorado Capital Appreciation and Zero Coupon Bonds (cost $31,821,496) | $ | 27,148,306 | ||||||||||
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Colorado BondShares
A Tax-Exempt Fund
Schedule of Investments (unaudited) — (Continued)
Face Amount | Market Value | |||||||||||
Colorado Certificates of Participation — 0.2% | ||||||||||||
75,000 | Arapahoe County Recreation District Refunding Certificates of Participation Series 1996, 5.20% due 12/1/2006 | $ | 75,476 | |||||||||
600,000 | Eagle-Vail Metropolitan District Golf Course Series 1999, 6.00% due 12/1/2019 | 608,592 | ||||||||||
Total Colorado Certificates of Participation Bonds (cost $602,330) | $ | 684,068 | ||||||||||
Other Municipal Bonds — 7.6% | ||||||||||||
3,740,000 | Class B Revenue Bond Certificate Series Trust 2004-1 Variable Rate Senior Certificates of Beneficial Ownership, 3.62% due 7/1/2037(h) | $ | 3,740,000 | |||||||||
4,943,382 | Freddie Mac Multi-Family Variable Rate Certificates Series M001 Class B, 9.75% due 4/1/2037(g) | 4,943,382 | ||||||||||
700,000 | The Industrial Development Revenue (City of Kansas City, Missouri) Multi-Family Revenue (Alexandria Apartments) Series 2005A, 6.75% due 1/1/2028 | 695,170 | ||||||||||
3,300,000 | The Industrial Development Revenue (City of Kansas City, Missouri) Subordinate Multi-Family Revenue (Alexandria Apartments) Series 2005B, 4.50% due 1/1/2008 | 3,297,030 | ||||||||||
4,200,000 | The Industrial Development Revenue (City of Kansas City, Missouri) Subordinate Senior Housing Revenue (The Residences at West Paseo) Series 2004B, 4.50% due 7/1/2006 | 4,198,614 | ||||||||||
525,000 | Lisbon (City of) North Dakota Industrial Revenue Series 2002C (Harvest Board LLC), 15.00% due 4/1/2005(a) | 131,250 | ||||||||||
4,500,000 | Lisbon (City of) North Dakota Industrial Revenue Series 2001A (Harvest Board LLC), 15.00% due 4/1/2011(a) | 1,125,000 | ||||||||||
210,000 | Sandoval County New Mexico Project Revenue Tournament Soccer Complex Series 1997, 7.50% due 8/15/2006 | 209,439 | ||||||||||
7,780,000 | Speedway Indiana Multi-Family Economic Development Revenue (Hermitage Apartments Project) Series 2005, 3.62% due 5/1/2031(h) | 7,780,000 | ||||||||||
1,000,000 | The Industrial Development Authority (City of St. Louis, Missouri) Senior Housing Revenue (Grant School Apartments) Series 2005A, 6.75% due 5/1/2027 | 1,005,340 | ||||||||||
3,900,000 | The Industrial Development Authority (City of St. Louis, Missouri) Subordinate Senior Housing Revenue (Grant School Apartments) Series 2005B, 4.50% due 11/1/2006 | 3,900,546 | ||||||||||
Total Other Municipal Bonds (cost $34,798,382) | $ | 31,025,771 | ||||||||||
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Colorado BondShares
A Tax-Exempt Fund
Schedule of Investments (unaudited) — (Continued)
Face Amount | Market Value | |||||||||||
Colorado Taxable Notes — 0% | ||||||||||||
227,347 | Note receivable from Tabernash Meadows, LLC, A Colorado Limited Liability Company, 24.00% due 2/09/2002(a) | $ | 227,347 | |||||||||
Total Colorado Taxable Notes (cost $227,347) | $ | 227,347 | ||||||||||
Total investments, at value (cost $397,679,133) | 97.6 | % | $ | 399,172,210 | ||||||||
Other assets net of liabilities | 2.4 | 9,804,846 | ||||||||||
Net assets | 100.0 | % | $ | 408,977,056 | ||||||||
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Colorado BondShares
A Tax-Exempt Fund
Schedule of Investments (unaudited) — (Continued)
(a) | Non-income producing based on the financial condition of the issuer (see footnote 1). | |
(b) | Originally issued as general obligation bonds but are now pre-refunded and are secured by an escrow fund consisting entirely of direct U.S. Government obligations. | |
(c) | Represents interest certificates whose characteristics are similar to zero coupon bonds. All interest based on the coupon rate is remitted upon maturity. Interest rate shown for interest certificates represents effective yield at acquisition. At March 31, 2006, the Fund had no such investments. | |
(d) | Interest rate shown for zero coupon bonds represents the effective yield at the date of acquisition. | |
(e) | Principal-only certificate represents the right to receive the principal payments on the underlying debt security upon maturity. The price of this security is typically more volatile than that of coupon-bearing bonds of the same maturity. | |
(f) | Interest-only certificate represents the right to receive semi-annual interest payments on the underlying debt security. The principal amount of the underlying security represents the notional amount on which current interest is calculated. The interest rate shown represents the effective yield at the date of acquisition. | |
(g) | Interest rate disclosed for cash flow bond represents the effective yield at March 31, 2006. Income on this security is derived from the cash flow of the issuer. | |
(h) | Represents current interest rate for a variable/step rate bond. | |
(i) | Terms of security have been restructured since the original issuance. The total face amount of all such restructured securities approximates $12,806,371 and a market value of $1,730,519 or less than 1% of net assets, respectively, as of March 31, 2006. |
The following abbreviations are used in the descriptions of securities included in the Schedule of Investments: | |
G.O. — General Obligation | |
GID — General Improvement District | |
LID — Local Improvement District | |
LTD — Limited | |
See accompanying notes to financial statements. |
12
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Colorado BondShares
A Tax-Exempt Fund | |
Statement of Assets and Liabilities (unaudited) | |
March 31, 2006 | |
ASSETS | |||||
Investments, at value (cost $397,679,133) | $ | 399,172,210 | |||
— see accompanying statement | |||||
Cash | 2,678,063 | ||||
Interest receivable | 7,854,230 | ||||
Shares of beneficial interest sold | 443,181 | ||||
TOTAL ASSETS | 410,147,684 | ||||
LIABILITIES | |||||
Payables and other liabilities: | |||||
Dividends payable | 909,698 | ||||
Shares of beneficial interest redeemed | 96,843 | ||||
Accrued expenses | 164,087 | ||||
TOTAL LIABILITIES | 1,170,628 | ||||
NET ASSETS, AT VALUE | $ | 408,977,056 | |||
COMPOSITION OF NET ASSETS | |||||
Paid-in capital | $ | 407,463,684 | |||
Distributable earnings | 20,295 | ||||
Net unrealized appreciation of investments (note 3) | 1,493,077 | ||||
NET ASSETS, AT VALUE | $ | 408,977,056 | |||
NET ASSET VALUE AND REDEMPTION VALUE PER SHARE (based on 43,436,418 shares of beneficial interest outstanding at March 31, 2006, unlimited number of no par value shares authorized) | $ | 9.42 | |||
MAXIMUM OFFERING PRICE PER SHARE(net asset value plus sales charge of 4.75% of offering price) | $ | 9.89 | |||
See accompanying notes to financial statements.
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Colorado BondShares
A Tax-Exempt Fund
Statement of Operations
For The Six Months Ended March 31, 2006 (unaudited)
INVESTMENT INCOME | ||||||
Interest | $ | 10,541,788 | ||||
EXPENSES | ||||||
Management fees (note 4) | 965,919 | |||||
Custodian fees (note 5) | 42,123 | |||||
Legal and auditing fees | 46,046 | |||||
Portfolio pricing fees (note 5) | 7,667 | |||||
Registration fees | 1,820 | |||||
Shareholders’ reports | 30,940 | |||||
Transfer agency expenses (note 4) | 45,500 | |||||
Trustees’ fees | 1,517 | |||||
Other | 3,085 | |||||
Total expenses | 1,144,617 | |||||
Earnings credits on cash balances (note 5) | (49,790 | ) | ||||
Net expenses | 1,094,827 | |||||
NET INVESTMENT INCOME | 9,446,961 | |||||
REALIZED AND UNREALIZED GAIN ON INVESTMENTS | ||||||
Realized net gain on investments | 17,777 | |||||
Change in net unrealized appreciation/depreciation on investments | 617,741 | |||||
NET REALIZED AND UNREALIZED GAIN | 635,518 | |||||
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS | $ | 10,082,479 | ||||
See accompanying notes to financial statements.
14
Table of Contents
Colorado BondShares
A Tax-Exempt Fund
Statement of Changes in Net Assets
For The Six Months Ended March 31, 2006 (unaudited) and For The Fiscal Year Ended September 30, 2005
Six Months | Year | |||||||||
Ended | Ended | |||||||||
March 31, | September 30, | |||||||||
2006 | 2005 | |||||||||
FROM OPERATIONS: | ||||||||||
Net investment income | $ | 9,446,961 | $ | 17,323,700 | ||||||
Realized net gain on investments | 17,777 | 635,219 | ||||||||
Change in unrealized appreciation/depreciation on investments | 617,741 | 2,016,338 | ||||||||
Net increase in net assets resulting from operations | 10,082,479 | 19,975,257 | ||||||||
FROM DISTRIBUTIONS TO SHAREHOLDERS: | ||||||||||
Dividends to shareholders from net investment income | (9,446,961 | ) | (17,323,700 | ) | ||||||
Realized capital gain and ordinary income | (354,059 | ) | (331,324 | ) | ||||||
Total distributions to shareholders | (9,801,020 | ) | (17,655,024 | ) | ||||||
FROM BENEFICIAL INTEREST TRANSACTIONS: | ||||||||||
Proceeds from sale of shares | 49,299,169 | 73,843,879 | ||||||||
Dividends reinvested | 6,171,720 | 10,441,279 | ||||||||
Payments for shares redeemed | (15,204,487 | ) | (30,826,825 | ) | ||||||
Increase in net assets derived from beneficial interest transactions | 40,266,402 | 53,458,333 | ||||||||
Net increase in net assets | 40,547,861 | 55,778,566 | ||||||||
NET ASSETS: | ||||||||||
Beginning of period | 368,429,195 | 312,650,629 | ||||||||
End of period | $ | 408,977,056 | $ | 368,429,195 | ||||||
See accompanying notes to financial statements.
15
Table of Contents
Colorado BondShares
A Tax-Exempt Fund
Financial Highlights
Six Months | Years Ended September 30, | ||||||||||||||||||||||||
Ended | |||||||||||||||||||||||||
3/31/2006 | 2005 | 2004 | 2003 | 2002 | 2001 | ||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||||||
Per Share Operating Data: | |||||||||||||||||||||||||
Net Asset Value, beginning of period | $ | 9.41 | $ | 9.35 | $ | 9.27 | $ | 9.33 | $ | 9.39 | $ | 9.35 | |||||||||||||
Net investment income | 0.23 | 0.48 | 0.47 | 0.60 | 0.59 | 0.68 | |||||||||||||||||||
Net realized and unrealized gain (loss) on investments | 0.02 | 0.07 | 0.08 | (0.06 | ) | (0.06 | ) | 0.04 | |||||||||||||||||
Increase from investment operations | 0.25 | 0.55 | 0.55 | 0.54 | 0.53 | 0.72 | |||||||||||||||||||
Dividends from net investment income | (0.23 | ) | (0.48 | ) | (0.47 | ) | (0.60 | ) | (0.59 | ) | (0.68 | ) | |||||||||||||
Capital gains and ordinary income | (0.01 | ) | (0.01 | ) | 0.00 | 0.00 | 0.00 | 0.00 | |||||||||||||||||
Net increase (decrease) in net asset value | 0.01 | 0.06 | 0.08 | (0.06 | ) | (0.06 | ) | 0.04 | |||||||||||||||||
Net Asset Value, end of period | $ | 9.42 | $ | 9.41 | $ | 9.35 | $ | 9.27 | $ | 9.33 | $ | 9.39 | |||||||||||||
Total Return, at Net Asset Value(1) | 2.62 | %+ | 6.14 | % | 6.19 | % | 5.96 | % | 5.90 | % | 7.79 | % | |||||||||||||
Ratios/ Supplemental Data: | |||||||||||||||||||||||||
Net investment income | 4.97 | %* | 5.10 | % | 5.08 | % | 6.46 | % | 6.77 | % | 7.14 | % | |||||||||||||
Total expenses | 0.60 | %* | 0.58 | % | 0.63 | % | 0.65 | % | 0.64 | % | 0.66 | % | |||||||||||||
Net expenses | 0.58 | %* | 0.55 | % | 0.60 | % | 0.61 | % | 0.59 | % | 0.60 | % | |||||||||||||
Net assets, end of period (000’s) | $ | 408,977 | $ | 368,429 | $ | 312,651 | $ | 267,207 | $ | 201,051 | $ | 138,520 | |||||||||||||
Ratios to average net assets: | |||||||||||||||||||||||||
Portfolio turnover rate(2) | 6.48 | %* | 4.40 | % | 2.57 | % | 4.65 | % | 6.03 | % | 7.91 | % | |||||||||||||
(1) | Assumes a hypothetical initial investment on the business day before the first day of the fiscal period, with all dividends reinvested in additional shares on the reinvestment date, and redemption at the net asset value calculated on the last business day of the fiscal period. Sales charges are not reflected in the total returns. |
(2) | The portfolio turnover rate is computed by dividing the lesser of purchases or sales of portfolio securities for a period by the monthly average of the market value of portfolio securities owned during the period. Sales of securities include the proceeds of securities which have been called, or for which payment has been made through redemption or maturity. Securities with a maturity date of one year or less at the time of acquisition are excluded from the calculation. Cost of purchases and proceeds from sales of investment securities (excluding short-term securities) for the period March 31, 2006 were $25,674,317 and $7,513,237, respectively. |
+ Not Annualized
* Annualized
See accompanying notes to financial statements.
16
Table of Contents
Colorado BondShares
A Tax-Exempt Fund
Notes to Financial Statements (unaudited)
(1) | Summary of Significant Accounting Policies |
Colorado BondShares — A Tax-Exempt Fund (the “Fund”) is registered under the Investment Company Act of 1940, as amended, as a diversified, open-end management company. The Fund’s investment objectives are to maximize income exempt from federal income taxes and from personal income taxes of the State of Colorado to the extent consistent with the preservation of capital and to seek opportunities for capital appreciation. The Fund’s investment adviser is Freedom Funds Management Company (“Freedom Funds”). The following is a summary of significant accounting policies consistently followed by the Fund.
(a) | Investment Valuation |
The values of most investment securities are determined at their market price using prices quoted by a national independent pricing service approved by the Fund’s Board of Trustees. In cases where a market price is not available from the pricing service, or where the Fund determines that the “market price” so determined is not reflective of the true “fair value” or realizable value of these securities, the securities are valued at “fair value” as determined in good faith by the Fund’s Board of Trustees. In either event, the Fund values the municipal bonds and other securities taking into consideration yield, stability, risk, quality, coupon, maturity, type of issue, trading characteristics and any other relevant trading or market factors. The Fund records amortization of premiums and accretion of original discounts on zero coupon bonds using the effective yield method, in accordance with federal income tax purposes. Short-term debt securities having a remaining maturity of 60 days or less are valued at amortized cost, which approximates market value.
(b) | Income Taxes |
The Fund intends to comply with the requirements of the Internal Revenue Code, as amended, applicable to regulated investment companies and to distribute all its net investment income to shareholders. Therefore, no tax provision is required.
(c) | Other/ Security Credit Risk |
Investment transactions are accounted for on the date the investments are purchased or sold (trade date). Dividends to shareholders are declared each business day and paid monthly. Distributions to shareholders are recorded on the ex-dividend date. Realized gains and losses from investment transactions are calculated using the identified-cost basis, which is the same basis the Fund uses for federal income tax purposes. Interest income is recorded on the accrual basis.
17
Table of Contents
Colorado BondShares
A Tax-Exempt Fund
Notes to Financial Statements (unaudited) — (Continued)
The Fund concentrates its investments in Colorado and, therefore, may have more credit risks related to the economic conditions of Colorado than a portfolio with a broader geographical diversification. The Fund invests in non-rated securities, which may be subject to a greater degree of credit risk and risk of loss of income and principal, and may be more sensitive to economic conditions than lower yielding, higher rate fixed income securities. The Fund discontinues the accrual of interest income on municipal bonds when the securities become delinquent as to payment of principal or interest, or when the Fund’s investment adviser determines that an uncertainty exists as to the realization of all or a portion of the principal balance. The face amount of bonds for which the accrual of interest income has been discontinued approximates $27,717,529 and such bonds have a market value of $15,327,334, or 3.8% of net assets, as of March 31, 2006.
(d) | Uses of Estimates |
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make 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 amounts of income and expenses during the reporting period. Actual results could differ from those estimates.
(2) | Shares of Beneficial Interest |
The Fund has an unlimited number of no par value shares of beneficial interest authorized. Transactions in shares of beneficial interest for the six month period ended March 31, 2006 and the year ended September 30, 2005 were as follows:
Six Months Ended | Year Ended | ||||||||||||||||
March 31, 2006 | September 30, 2005 | ||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||
Shares sold | 5,243,252 | $ | 49,299,169 | 7,873,185 | $ | 73,843,880 | |||||||||||
Dividends reinvested | 656,496 | 6,171,720 | 1,113,420 | 10,441,279 | |||||||||||||
5,899,748 | 55,470,889 | 8,986,605 | 84,285,159 | ||||||||||||||
Shares redeemed | (1,616,976 | ) | (15,204,487 | ) | (3,286,316 | ) | (30,826,825 | ) | |||||||||
Net increase in shares outstanding | 4,282,772 | $ | 40,266,402 | 5,700,289 | $ | 53,458,334 | |||||||||||
18
Table of Contents
Colorado BondShares
A Tax-Exempt Fund
Notes to Financial Statements (unaudited) — (Continued)
(3) | Unrealized Gains and Losses |
At March 31, 2006, the net unrealized appreciation on investments of $1,493,077 was comprised of gross appreciation of $12,347,252 and gross depreciation of $10,854,175.
(4) | Management Fees and Other Transactions with Affiliates |
Management fees paid to Freedom Funds were in accordance with the investment advisory agreement with the Fund which provides for an annual fee equivalent to 0.5% of the net assets of the Fund. Freedom Funds pays all expenses associated with advertising, marketing, and distributing the Fund’s shares and serves as the transfer agent, dividend disbursing agent, and registrar for the Fund. Freedom Funds provided certain transfer agency and shareholder services as part of the management fee arrangement for the period ended March 31, 2006. Transfer agency expenses represent direct expenses charged to the Fund by third parties.
(5) | Earnings Credits on Cash Balances |
Expenses paid indirectly by the Fund represent earnings credits on cash balances maintained with the Fund’s custodian bank, Wells Fargo Investments and Trust. The earnings credits resulted in offsetting custodian fees of $42,123 and portfolio pricing fees of $7,667 for services provided by Standard and Poor’s, a division of The McGraw-Hill Companies.
19
Table of Contents
Officers and Trustees
The Board of Trustees of the Fund supervises the activities of the Fund, reviews the Fund’s service contracts and hires the companies that run the day-to-day operations of the Fund, such as the administrator, custodian, investment adviser, transfer agent and underwriter. The following table lists the trustees and officers of the Fund together with their positions held with the Fund, the term of office and current principal occupation.
Officers and Trustees | Principal Occupation During the Past Five Years: | |
Chairman of the Board | ||
George N. Donnelly Chairman of the Board of Trustees since inception of the Fund 1987 | Mr. Donnelly is currently a Senior Regional Vice President for Phoenix Life Insurance Company. | |
Independent Trustees | ||
Bruce G. Ely Trustee since July 2002 | Mr. Ely is currently the Regional Marketing Director for MBIA Municipal Investors Service Corporation in Colorado. | |
James R. Madden Trustee since September 2004 | Mr. Madden has owned Madden Enterprises, a real estate company that owns and leases commercial buildings and real estate, for the past thirty years. | |
Officer and Trustee1 Andrew B. Shaffer1 Trustee, Secretary and Treasurer since June 1995 and President since January 2003 | Mr. Shaffer is the manager of Shaffer Capital Management/ LLC. 1Andrew B. Shaffer is an “interested person” of the Fund as defined in the Investment Company Act of 1940 (the “1940 Act”) by virtue of his position as both an officer and a trustee of the Fund as described in the table. |
20
Table of Contents
Proxy Voting Record
The Fund does not invest in equity securities. Accordingly, there were no matters relating to a portfolio security considered during the 12 months ended June 30, 2005 with respect to which the Fund was entitled to vote. Applicable regulations require us to inform you that the foregoing proxy voting information is available on the SEC website at http://www.sec.gov or you may call us at 1-800-572-0069.
Proxy Voting Policies and Procedures
A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities is available (i) without charge, upon request, by calling 1-800-572-0069; (ii) on the Commission’s website at http://www.sec.gov.
Quarterly Portfolio Schedule
The Fund files a complete schedule of investments with the Securities and Exchange Commission for the first and third quarters for each fiscal year on Form N-Q. The Fund’s filed Forms N-Q are available on the Commission’s website at http://www.sec.gov. The Funds’s Forms N-Q may also be reviewed and copied at the Commission’s Public Reference Room in Washington, DC. Information regarding the operations of the Public Reference Room may be obtained by calling 1-800-732-0330. You may obtain information on the Fund’s Forms N-Q by calling us at 1-800-572-0069.
21
Table of Contents
Table of Contents
Item 2. CODE OF ETHICS.
Not required in this filing.
Item 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Not required in this filing.
Item 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Not required in this filing.
Item 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable.
Item 6. SCHEDULE OF INVESTMENTS.
Included in Item 1.
Item 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
Item 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
Item 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS.
Not applicable.
Item 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
None.
Item 11. CONTROLS AND PROCEDURES.
(a) It is the conclusion of the registrant’s principal executive officer and principal financial officer that the effectiveness of the registrant’s current disclosure controls and procedures (as defined in Rule 30(a) 3-(c) under the Investment Company Act of 1940) (such disclosure controls and procedures having been evaluated within 90 days of the date of this filing) provide reasonable assurance that the information required to be disclosed by the registrant has been recorded, processed, summarized and reported within the time period specified in the Commission’s rules and forms and that the information required to be disclosed by the registrant has been accumulated and communicated to the registrant’s principal executive officer and principal financial officer in order to allow timely decisions regarding required disclosure.
(b) There has been no change in the registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the Act (17 CFR 270.30a-3(d)) that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.
ITEM 12. EXHIBITS.
(a)(2)(i) | President & Treasurer’s Section 302 certification. |
(b) | Combined Section 906 certification. |
Table of Contents
SIGNATURES
Pursuant to the requirements of the Securities 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.
COLORADO BONDSHARES—A TAX-EXEMPT FUND | ||||
By: | /s/ Andrew B. Shaffer | |||
Andrew B. Shaffer, | ||||
President, Secretary and Treasurer |
Date: June 02, 2006
Pursuant to the requirements of the Securities Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
By: | /s/ Andrew B. Shaffer | |||
Andrew B. Shaffer, | ||||
President, Secretary and Treasurer | ||||
(Principal Executive Officer and Principal Financial Officer) | ||||
Date: June 02, 2006 |