As an investor of a Portfolio, you incur two types of costs: ongoing expenses and transaction costs. Ongoing expenses include management fees, distribution and service (12b-1) fees and other Portfolio expenses. Examples of transaction costs include sales charges (loads), redemption fees and account maintenance fees, which are not shown in this section. The following tables are intended to help you understand your ongoing expenses (in dollars) of investing in each Portfolio and to help you compare these expenses with the ongoing expenses of investing in other mutual funds. In the most recent six-month period, the Portfolios limited these expenses; had they not done so, expenses would have been higher for the Service Shares. The example in the table is based on an investment of $1,000 invested at the beginning of the six-month period and held for the entire period (May 1, 2007 to October 31, 2007).
Please note that the expenses shown in these tables are meant to highlight your ongoing expenses only and do not reflect any transaction costs. The "Expenses Paid per $1,000" line of the tables is useful in comparing ongoing expenses only and will not help you determine the relative total expense of owning different funds. If these transaction costs had been included, your costs would have been higher.
For more information, please refer to each Portfolio's prospectus.
| Principal Amount ($) | Value ($) |
| |
Municipal Investments 100.9% |
Alabama 1.5% |
Alabama, Municipal Securities Trust Certificates, "A", Series 2005-9060, 144A, 3.5%*, 3/10/2011 (a) | 9,055,000 | 9,055,000 |
Alabama, Southeast Gas District Revenue, Supply Project, Series A, 3.58%*, 8/1/2027 | 31,300,000 | 31,300,000 |
Austin Trust, Various States, Series 2007-1001, 144A, 3.49%*, 9/1/2041 (a) | 7,355,000 | 7,355,000 |
Hoover, AL, Board of Education Capital Outlay Warrants, Series D-11, 144A, 3.34%*, 2/15/2027 (a) | 4,495,000 | 4,495,000 |
| 52,205,000 |
Alaska 1.7% |
Alaska, Lehman Municipal Trust Receipts, Various States, Series K40W-D, AMT, 144A, 3.4%*, 12/1/2036 (a) | 4,955,000 | 4,955,000 |
Alaska, State Housing Finance Corp., Home Mortgage: | | |
Series A, AMT, 3.51%*, 6/1/2032 (a) | 30,000,000 | 30,000,000 |
Series A, AMT, 3.51%*, 12/1/2036 (a) | 24,920,000 | 24,920,000 |
Anchorage, AK, Core City, General Obligation, Series II-R, 144A, 3.51%*, 6/1/2019 (a) | 2,890,000 | 2,890,000 |
| 62,765,000 |
Arizona 1.9% |
Arizona, Health Facilities Authority Revenue, The Terraces, 3.46%*, 12/1/2037, Sovereign Bank FSB (b) | 10,000,000 | 10,000,000 |
Arizona, Salt River Project: | | |
3.54%, 11/5/2007 | 25,000,000 | 25,000,000 |
3.55%, 11/2/2007 | 12,400,000 | 12,400,000 |
Arizona, Salt River Project, Agriculture Improvement & Power District Electric System Revenue, "A", 144A, 3.52%*, 1/1/2035 | 3,000,000 | 3,000,000 |
Pinal County, AZ, Electrical District No. 3, Electrical Systems Revenue, Series U-1, 144A, 3.52%*, 10/3/2011 | 16,995,000 | 16,995,000 |
| 67,395,000 |
Arkansas 0.1% |
Pocahontas, AR, Industrial Development Revenue, MacLean Esna LP Project, AMT, 3.4%*, 5/1/2015, Northern Trust Co. (b) | 2,500,000 | 2,500,000 |
California 2.2% |
California, State Revenue Anticipation Notes, 4.0%, 6/30/2008 | 80,500,000 | 80,829,245 |
Colorado 4.2% |
Adams & Weld Counties, CO, Brighton School District No. 27J, Series R-6514, 144A, 3.51%*, 12/1/2024 (a) | 13,370,000 | 13,370,000 |
Austin Trust, Various States, Series 2007-319, 144A, 3.52%*, 6/7/2010, Bank of America NA (b) | 16,850,000 | 16,850,000 |
Colorado, Educational & Cultural Facilities Authority Revenue, National Jewish Federation Bond Program, Series C-5, 3.58%*, 11/1/2037, US Bank NA (b) | 3,500,000 | 3,500,000 |
Colorado, Educational & Cultural Facilities Authority Revenue, Trinity School Project, 3.48%*, 9/1/2026, Branch Banking & Trust (b) | 2,000,000 | 2,000,000 |
Colorado, Educational & Cultural Facilities Authority Revenue, Vail Mountain School Project, 3.53%*, 5/1/2033, KeyBank NA (b) | 5,000,000 | 5,000,000 |
Colorado, Health Facilities Authority Revenue, Catholic Health Initiatives, Series B-6, 3.3%*, 3/1/2044 | 31,400,000 | 31,400,000 |
Colorado, Municipal Securities Trust Certificates, Series 2004-220-A, 144A, 3.51%*, 2/15/2023 (a) | 13,275,000 | 13,275,000 |
Colorado, Regional Transportation District, Sales Tax Revenue, Series R-10117, 144A, 3.51%*, 11/1/2036 (a) | 4,405,000 | 4,405,000 |
Colorado, State General Fund Revenue, Anticipation Notes, Series A, 4.25%, 6/27/2008 | 50,000,000 | 50,168,866 |
Greenwood Village, CO, Fiddlers Business Improvement District, Series 2, 3.47%*, 12/1/2036, KeyBank NA (b) | 10,000,000 | 10,000,000 |
Larimer County, CO, School District No. R-1 Poudre, Series R-4535, 144A, 3.51%*, 12/15/2021 (a) | 2,765,000 | 2,765,000 |
| 152,733,866 |
Delaware 1.7% |
Delaware, State Economic Development Authority Revenue, YMCA Delaware Project, 3.45%*, 5/1/2036, PNC Bank NA (b) | 21,585,000 | 21,585,000 |
Delaware, UBS Municipal (CRVS), Various States, Series 2007-11, AMT, 144A, 3.54%*, 7/1/2015 | 9,010,000 | 9,010,000 |
Sussex County, DE, First Mortgage Revenue, Cadbury Lewes, Series C, 3.49%*, 1/1/2016, Citizens Bank of PA (b) | 26,500,000 | 26,500,000 |
Sussex County, DE, Industrial Development Revenue, Perdue Agrirecycle LLC Project, AMT, 3.49%*, 1/1/2013, SunTrust Bank, Atlanta (b) | 5,000,000 | 5,000,000 |
| 62,095,000 |
District of Columbia 1.1% |
District of Columbia, Center for Internships & Academic Revenue, 3.48%*, 7/1/2036, Branch Banking & Trust (b) | 3,400,000 | 3,400,000 |
District of Columbia, General Obligation: | | |
Series B-33, 144A, 3.34%*, 6/1/2025 (a) | 4,970,000 | 4,970,000 |
Series B-34, 144A, 3.34%*, 6/1/2026 (a) | 4,000,000 | 4,000,000 |
Series PT-2440, 144A, 3.44%*, 6/1/2024 (a) | 1,880,000 | 1,880,000 |
District of Columbia, Housing Finance Agency, Multi-Family Housing Revenue, Series R-433, AMT, 144A, 3.59%*, 6/1/2038 | 7,780,000 | 7,780,000 |
District of Columbia, Puttable Floating Option, Tax-Exempt Receipts, Series PT-4154, 144A, 3.4%*, 6/1/2031 (a) | 14,000,000 | 14,000,000 |
District of Columbia, UBS Municipal (CRVS), Various States, Series 07-1020, 144A, 3.51%*, 2/1/2031 (a) | 5,000,000 | 5,000,000 |
| 41,030,000 |
Florida 5.3% |
Austin Trust, Various States, Series 2007-129, 144A, 3.5%*, 7/1/2032 (a) | 3,235,000 | 3,235,000 |
Brevard County, FL, Housing Finance Authority, Multi-Family Housing Revenue, Timber Trace Apartments Project, AMT, 3.33%*, 3/15/2045, Citibank NA (b) | 13,600,000 | 13,600,000 |
Broward County, FL, School Board Certificates of Participation, Series R-1056, 144A, 3.51%*, 7/1/2019 (a) | 5,780,000 | 5,780,000 |
Collier County, FL, Industrial Development Authority Revenue, Allete, Inc. Project, AMT, 3.5%*, 10/1/2025, Wells Fargo Bank NA (b) | 2,000,000 | 2,000,000 |
Florida, Capital Trust Agency Revenue, Aero Miami FX Project-Air Cargo, AMT, 3.55%*, 8/1/2034, Bank One NA (b) | 14,100,000 | 14,100,000 |
Florida, Housing Financial Corp., Multi-Family Mortgage Revenue, Clear Harbor Apartments, AMT, 3.51%*, 6/15/2042, Citibank NA (b) | 5,950,000 | 5,950,000 |
Florida, Municipal Securities Trust Certificates, "A", Series 7007, AMT, 144A, 3.55%*, 3/1/2040 (a) | 8,250,000 | 8,250,000 |
Florida, State Turnkpike Authority Revenue, Series R-4041, 144A, 3.51%*, 7/1/2020 (a) | 13,370,000 | 13,370,000 |
Gulf Breeze, FL, Municipal Bond Fund Revenue, Series A, 3.47%*, 3/31/2021, Bank of America NA (b) | 10,110,000 | 10,110,000 |
Jacksonville, FL, Economic Development Commission, Industrial Development Revenue, STI Project, AMT, 3.48%*, 12/1/2020, Bank of America NA (b) | 1,350,000 | 1,350,000 |
Jacksonville, FL, Electric Authority, 3.62%, 11/5/2007 | 5,500,000 | 5,500,000 |
Lee County, FL, Airport Revenue, Series 811-X, AMT, 144A, 3.53%*, 10/1/2029 (a) | 2,000,000 | 2,000,000 |
Miami-Dade County, FL, Industrial Development Authority Revenue, Gulliver Schools Project, 3.45%*, 9/1/2029, Bank of America NA (b) | 6,355,000 | 6,355,000 |
Miami-Dade County, FL, School District Revenue, 5.0%, 2/15/2008 (a) | 6,495,000 | 6,520,709 |
Orange County, FL, Housing Finance Authority, Multi-Family Revenue: | | |
Series E, AMT, 3.44%*, 3/1/2035, Bank of America NA (b) | 1,470,000 | 1,470,000 |
Series 1179, AMT, 144A, 3.55%*, 10/1/2031 | 8,400,000 | 8,400,000 |
Orange County, FL, Housing Finance Authority, Multi-Family Revenue, Laurel Oaks Apartments, Phase I, AMT, 3.52%*, 8/15/2042, SunTrust Bank (b) | 10,780,000 | 10,780,000 |
Orange County, FL, Housing Finance Authority, Multi-Family Revenue, Laurel Oaks Apartments, Phase II, AMT, 3.51%*, 8/15/2042, SunTrust Bank (b) | 8,660,000 | 8,660,000 |
Orlando, FL, Government Financing, 3.55%, 1/10/2008 | 3,000,000 | 3,000,000 |
Palm Beach County, FL, Community Foundation, Palm Beach Project Revenue, 3.49%*, 3/1/2034, Northern Trust Co. (b) | 4,165,000 | 4,165,000 |
Palm Beach County, FL, Housing Finance Authority, Multi-Family Housing Revenue, Palm Gardens Apartments Project, AMT, 3.37%*, 9/15/2044, Citibank NA (b) | 10,250,000 | 10,250,000 |
Pasco County, FL, School Board Certificates of Participation, Series R-11084, 144A, 3.51%*, 8/1/2024 (a) | 5,790,000 | 5,790,000 |
Santa Rosa County, FL, Health Facilities Authority Revenue, Baptist Hospital, Inc., 3.25%*, 10/1/2021, Bank of America NA (b) | 12,240,000 | 12,240,000 |
Sarasota County, FL, Health Facilities Authority Revenue, Health Care Facilities, Bay Village Project, 3.45%*, 12/1/2023, Bank of America NA (b) | 4,820,000 | 4,820,000 |
Sarasota County, FL, Utility System Revenue, Series 852, 144A, 3.49%*, 4/1/2013 (a) | 4,480,000 | 4,480,000 |
Seminole County, FL, Industrial Development Authority Revenue, Masters Academy Project, 3.46%*, 11/1/2034, Allied Irish Bank PLC (b) | 8,640,000 | 8,640,000 |
Tallahassee, FL, Energy Systems Revenue, "A", 144A, 3.5%*, 10/1/2037 (a) | 9,905,000 | 9,905,000 |
West Palm Beach, FL, Utility Systems Revenue, 3.25%*, 10/1/2029 (a) | 1,815,000 | 1,815,000 |
| 192,535,709 |
Georgia 0.8% |
Atlanta, GA, Airport Revenue, Series C-1, 3.47%*, 1/1/2030 (a) | 5,000,000 | 5,000,000 |
Fulton County, GA, Development Authority Revenue, Doris & Alex Weber School Project, 3.48%*, 12/1/2030, Branch Banking & Trust (b) | 5,000,000 | 5,000,000 |
Fulton County, GA, Development Authority Revenue, Kings Ridge Christian School, 3.48%*, 5/1/2026, Branch Banking & Trust (b) | 2,500,000 | 2,500,000 |
Fulton County, GA, Development Authority Revenue, Mount Vernon Presbyterian School, 3.48%*, 8/1/2035, Branch Banking & Trust (b) | 2,500,000 | 2,500,000 |
Georgia, Private Colleges & Universities Authority Revenue, Mercer University Project, Series A, 3.5%*, 10/1/2036, Branch Banking & Trust (b) | 5,500,000 | 5,500,000 |
RBC Municipal Products, Inc. Trust, Various States, Series C-3, 144A, AMT, 3.57%*, 3/1/2016, Royal Bank of Canada (b) | 10,000,000 | 10,000,000 |
| 30,500,000 |
Hawaii 0.8% |
ABN AMRO, Munitops Certificates Trust, Series 2004-16, 144A, 3.5%*, 7/1/2012 (a) | 7,200,000 | 7,200,000 |
Hawaii, General Obligation: | | |
Series R-4545, 144A, 3.51%*, 8/1/2020 (a) | 5,120,000 | 5,120,000 |
Series R-4553, 144A, 3.51%*, 5/1/2023 (a) | 8,910,000 | 8,910,000 |
Honolulu, HI, City & Country, Waste Water System Revenue, "A", 144A, 3.5%*, 7/1/2030 (a) | 5,845,000 | 5,845,000 |
| 27,075,000 |
Idaho 0.8% |
Idaho, Health Facilities Authority Revenue, St. Luke's Medical Center, 3.59%*, 7/1/2030 (a) | 2,150,000 | 2,150,000 |
Idaho, Lehman Municipal Trust Receipts, Various States, Series K39W-D, AMT, 144A, 3.4%*, 7/1/2038 | 5,710,000 | 5,710,000 |
Idaho, State General Obligation, Tax Anticipation Notes, 4.5%, 6/30/2008 | 20,000,000 | 20,098,130 |
| 27,958,130 |
Illinois 12.6% |
ABN AMRO, Munitops Certificates Trust, Series 2006-53, 144A, 3.5%*, 7/1/2014 (a) | 12,000,000 | 12,000,000 |
Austin Trust, General Obligation, Various States: | | |
Series 2001, 144A, 3.5%*, 12/1/2026 (a) | 4,175,000 | 4,175,000 |
Series 2003, 144A, 3.5%*, 1/1/2026 (a) | 5,900,000 | 5,900,000 |
Series 2007-2014, 144A, 3.5%*, 6/1/2034 (a) | 17,740,000 | 17,740,000 |
Chicago, IL, De La Salle Institute Project Revenue, 3.39%*, 4/1/2027, Fifth Third Bank (b) | 4,877,000 | 4,877,000 |
Chicago, IL, Multi-Family Housing Revenue, Series F3-D, AMT, 144A, 3.37%*, 7/15/2039 | 13,305,000 | 13,305,000 |
Chicago, IL, Multi-Family Housing Revenue, Central Station Project, Series A, AMT, 3.53%*, 7/15/2039 | 5,450,000 | 5,450,000 |
Chicago, IL, O'Hare International Airport Revenue, Series MT-049, AMT, 144A, 3.55%*, 1/1/2017 (a) | 1,995,000 | 1,995,000 |
Chicago, IL, O'Hare International Airport Revenue, Pool Trust National, Series 1438, AMT, 144A, 3.63%*, 7/1/2026 | 26,889,000 | 26,889,000 |
Chicago, IL, Solar Eclipse Funding Trust, Series 2006-0003, 144A, 3.8%*, 1/1/2026 (a) | 9,315,000 | 9,315,000 |
Chicago, IL, Tender Notes, 3.64%*, 2/20/2009, Harris NA (b) | 23,000,000 | 23,000,000 |
Cook County, IL, Catholic Theological Union Project Revenue, 3.31%*, 2/1/2035, Harris Trust & Savings Bank (b) | 6,000,000 | 6,000,000 |
Cook County, IL, Industrial Development Revenue, Devorahco LLC Project, Series A, AMT, 3.55%*, 12/1/2034, LaSalle Bank NA (b) | 2,000,000 | 2,000,000 |
Hillside, IL, Economic Development Revenue, L&J Technologies Project, AMT, 3.4%*, 7/1/2024, Northern Trust Co. (b) | 3,420,000 | 3,420,000 |
Illinois, Development Finance Authority, Series D-10, 144A, 3.4%*, 7/15/2023 | 12,755,000 | 12,755,000 |
Illinois, Development Finance Authority, Industrial Development Revenue, Home Run Inn Frozen Foods, AMT, 3.73%*, 4/1/2020, Bank One NA (b) | 2,515,000 | 2,515,000 |
Illinois, Development Finance Authority, Industrial Development Revenue, Katlaw Tretam & Co. Project, AMT, 3.55%*, 8/1/2027, LaSalle Bank NA (b) | 3,750,000 | 3,750,000 |
Illinois, Development Finance Authority, Industrial Project Revenue, Grecian Delight Foods Project, AMT, 3.55%*, 8/1/2019, LaSalle Bank NA (b) | 3,500,000 | 3,500,000 |
Illinois, Development Finance Authority Revenue, Series B-1, 3.39%*, 10/1/2029, Comerica Bank (b) | 3,325,000 | 3,325,000 |
Illinois, Development Finance Authority Revenue, Fenwick High School Project, 3.33%*, 3/1/2032, JPMorgan Chase Bank (b) | 5,600,000 | 5,600,000 |
Illinois, Development Finance Authority Revenue, Regional Organization Bank of Illinois Project, 3.68%*, 12/1/2020, Bank One NA (b) | 3,500,000 | 3,500,000 |
Illinois, Finance Authority, Student Housing Revenue, Dekalb LLC Project, Series A, 3.5%*, 7/1/2038, Sovereign Bank FSB (b) | 4,500,000 | 4,500,000 |
Illinois, Finance Authority Revenue, "A", 144A, 3.52%*, 12/1/2042 | 8,565,000 | 8,565,000 |
Illinois, Finance Authority Revenue, Clare Oaks: | | |
Series C, 3.47%*, 11/1/2040, Sovereign Bank FSB (b) | 5,000,000 | 5,000,000 |
Series D, 3.47%*, 11/1/2040, Sovereign Bank FSB (b) | 10,000,000 | 10,000,000 |
Illinois, Finance Authority Revenue, North Park University Project, 3.33%*, 7/1/2035, JPMorgan Chase Bank (b) | 14,000,000 | 14,000,000 |
Illinois, Finance Authority Revenue, UBS Municipal (CRVS), Series 06-2001, 3.51%*, 7/1/2009 | 5,000,000 | 5,000,000 |
Illinois, Housing Development Authority Revenue, Homeowner Mortgage, Series H-2, 3.48%, 2/1/2039 | 20,000,000 | 20,000,000 |
Illinois, Municipal Securities Trust Certificates, "A", Series 3081, 144A, 3.5%*, 6/9/2021 (a) | 3,760,000 | 3,760,000 |
Illinois, Munitops II Trust, Series 2007-29, 144A, 3.5%*, 6/1/2027 (a) | 16,200,000 | 16,200,000 |
Illinois, Regional Transportation Authority, Series A-23, 144A, 3.34%*, 7/1/2030 (a) | 4,910,000 | 4,910,000 |
Illinois, Reset Optional Certificates Trust II, Various States, Series R-1076, 144A, 3.51%*, 4/1/2029 (a) | 6,035,000 | 6,035,000 |
Illinois, Sales Tax Revenue, Series R-4516, 144A, 3.51%*, 6/15/2023 | 4,445,000 | 4,445,000 |
Illinois, State General Obligation: | | |
Series PT-3524, 3.49%*, 1/1/2020 | 10,485,000 | 10,485,000 |
Series PT-1750, 144A, 3.58%*, 12/1/2010 (a) | 5,240,000 | 5,240,000 |
4.25%, 11/9/2007 | 72,000,000 | 72,007,680 |
Illinois, University of Illinois Revenue, "A", 144A, 3.52%*, 4/1/2035 (a) | 14,300,000 | 14,300,000 |
Justice, IL, Multi-Family Housing Revenue, Candlewood Apartments Project, AMT, 3.54%*, 1/15/2033 | 10,700,000 | 10,700,000 |
Lake Zurich, IL, Industrial Development Revenue, Screenco LLC/ScreenFlex Project, AMT, 3.55%*, 3/1/2018, LaSalle National Bank (b) | 1,435,000 | 1,435,000 |
Mundelein, IL, Industrial Development Revenue, MacLean Fogg Co. Project, AMT, 3.4%*, 1/1/2015, Northern Trust Co. (b) | 6,500,000 | 6,500,000 |
Tinley Park, IL, Industrial Development Revenue, Harbor Tool Manufacturing, Inc., Project, AMT, 3.55%*, 7/1/2020, LaSalle Bank NA (b) | 2,080,000 | 2,080,000 |
Western Springs, IL, Special Assessment, Timber Trails Project, 3.32%*, 12/1/2025, Lasalle Bank NA (b) | 24,723,000 | 24,723,000 |
Will & Kendall Counties, IL, Community School District No. 202, Series R-4031, 144A, 3.51%*, 1/1/2023 (a) | 2,560,000 | 2,560,000 |
Woodridge, IL, Du Page Will & Cook Counties, Industrial Development Revenue, Morey Realty Group, Inc. Project, AMT, 3.59%*, 12/1/2016, Bank One NA (b) | 3,430,000 | 3,430,000 |
Woodstock, IL, Multi-Family Housing Revenue, Willow Brooke Apartments, AMT, 3.51%*, 4/1/2042, Wells Fargo Bank NA (b) | 28,000,000 | 28,000,000 |
| 454,886,680 |
Indiana 1.4% |
Columbia City, IN, Economic Development Revenue, Precision Plastics Project, AMT, 3.4%*, 11/30/2017, Northern Trust Co. (b) | 3,700,000 | 3,700,000 |
Indiana, Health & Educational Facility, Financing Authority Revenue, Greenwood Village South Project, Series A, 3.47%*, 5/1/2036, Sovereign Bank FSB (b) | 9,400,000 | 9,400,000 |
Indiana, Health Facility Financing Authority Revenue, Clark Memorial Hospital, Series A, 3.5%*, 4/1/2024, Bank One NA (b) | 2,000,000 | 2,000,000 |
Indiana, State Development Finance Authority, Industrial Development Revenue, Enterprise Center V Project, AMT, 3.39%*, 6/1/2022, LaSalle Bank NA (b) | 5,000,000 | 5,000,000 |
Indiana, State Development Finance Authority, Industrial Development Revenue, Enterprise Center VI Project, AMT, 3.46%*, 6/1/2022, LaSalle Bank NA (b) | 4,900,000 | 4,900,000 |
Indiana, State Finance Authority, Water Facilities Revenue, Series 111, 144A, AMT, 3.53%*, 10/1/2036 (a) | 2,695,000 | 2,695,000 |
Indiana, Transportation Finance Authority Highway Revenue: | | |
Series B-21, 144A, 3.34%*, 12/1/2022 (a) | 2,070,000 | 2,070,000 |
Series R-4528, 144A, 3.51%*, 6/1/2018 (a) | 2,260,000 | 2,260,000 |
Indianapolis, IN, Local Public Import Bond Bank, Macon Trust, Series P, 144A, AMT, 3.53%*, 1/1/2030 (a) | 3,120,000 | 3,120,000 |
Portage, IN, Economic Development Revenue, Breckenridge Apartments Project, AMT, 3.5%*, 5/1/2025, LaSalle National Bank (b) | 4,650,000 | 4,650,000 |
Terre Haute, IN, Westminster Village Revenue, Series A, 3.47%*, 8/1/2036, Sovereign Bank FSB (b) | 9,245,000 | 9,245,000 |
| 49,040,000 |
Iowa 0.3% |
Iowa, Finance Authority Student Housing Revenue, Des Moines LLC Project, Series A, 3.49%*, 6/1/2039, Citibank NA (b) | 10,000,000 | 10,000,000 |
Kansas 0.2% |
Kansas, Hospital Authority Health Facilities Revenue, University of Kansas Health Systems, 3.58%*, 9/1/2034, Harris Trust & Savings Bank (b) | 2,500,000 | 2,500,000 |
Kansas, State Development Finance Authority, Multi-Family Revenue, Oak Ridge Park II Project, Series X, AMT, 3.58%*, 12/1/2036, Marshall & Ilsley (b) | 3,650,000 | 3,650,000 |
| 6,150,000 |
Kentucky 2.6% |
Branch Banking & Trust Municipal Trust, Various States, Series 2008, 144A, 3.49%*, 11/1/2025 (a) | 9,995,000 | 9,995,000 |
Danville, KY, Multi-City Lease, 3.81%, 12/13/2007 | 30,330,000 | 30,330,000 |
Kentucky, Asset/Liability Commission General Fund Revenue, Series R-11126, 144A, 3.51%*, 11/1/2027 (a) | 5,230,000 | 5,230,000 |
Kentucky, Kentucky, Inc., Public Energy Authority, Gas Supply Revenue, Series A, 3.58%*, 8/1/2016 | 45,000,000 | 45,000,000 |
Somerset, KY, Blakley Family YMCA, Inc. Project, 3.5%*, 4/1/2015, Fifth Third Bank (b) | 2,415,000 | 2,415,000 |
| 92,970,000 |
Louisiana 1.9% |
Austin Trust, Various States, Series 2009, 144A, 3.5%*, 12/1/2022 (a) | 5,320,000 | 5,320,000 |
Louisiana, State Gas & Fuels Tax Revenue, "A", 144A, 3.52%*, 5/1/2036 (a) | 5,000,000 | 5,000,000 |
Louisiana, State Municipal Natural Gas Purchasing & District Authority, Series 1411Q, 144A, 3.53%*, 3/15/2014, JPMorgan Chase & Co. (b) | 50,902,000 | 50,902,000 |
Louisiana, State Offshore Term Authority, Deep Water Port Revenue, Loop LLC Project, 3.26%*, 10/1/2019, JPMorgan Chase Bank (b) | 5,900,000 | 5,900,000 |
| 67,122,000 |
Maine 0.3% |
Maine, State Housing Authority Mortgage Purchase: | | |
Series G, AMT, 3.5%*, 11/15/2037 | 5,000,000 | 5,000,000 |
Series H, AMT, 3.62%*, 11/15/2034 | 5,000,000 | 5,000,000 |
| 10,000,000 |
Maryland 1.0% |
Maryland, State Economic Development Corp. Revenue, YMCA Central Maryland Project, 3.48%*, 4/1/2031, Branch Banking & Trust (b) | 3,850,000 | 3,850,000 |
Maryland, State Health & Higher Education, 3.53%, 11/1/2007 | 18,446,000 | 18,446,000 |
Montgomery County, MD, Economic Development Revenue, Howard Hughes Medical Facility, Series A, 3.31%*, 10/15/2020 | 15,000,000 | 15,000,000 |
| 37,296,000 |
Massachusetts 2.6% |
Massachusetts, Puttable Floating Option Tax-Exempt Receipts, Series PT-4303, 144A, 3.49%*, 8/1/2030 (a) | 37,640,000 | 37,640,000 |
Massachusetts, Solar Eclipse Funding Trust, 144A, 3.48%*, 8/1/2037 (a) | 10,500,000 | 10,500,000 |
Massachusetts, State Development Finance Agency Revenue, Bridgewell, Inc., Series A, 3.46%*, 6/1/2030, KeyBank NA (b) | 6,000,000 | 6,000,000 |
Massachusetts, State Development Finance Agency Revenue, Charles River School, 3.46%*, 5/1/2037, Citizens Bank of MA (b) | 5,000,000 | 5,000,000 |
Massachusetts, State Development Finance Agency Revenue, Governor Dummer Academy, 3.32%*, 8/1/2036, Citizens Bank of MA (b) | 4,000,000 | 4,000,000 |
Massachusetts, State Development Finance Agency Revenue, Tabor Academy, Series A, 3.48%*, 12/1/2036, Citizens Bank of MA (b) | 7,805,000 | 7,805,000 |
Massachusetts, State Development Finance Agency Revenue, YMCA of Greater Worcester, 3.34%*, 9/1/2041, TD BankNorth NA (b) | 5,775,000 | 5,775,000 |
Massachusetts, State General Obligation, Series R-11130, 144A, 3.5%*, 10/1/2018 (a) | 7,890,000 | 7,890,000 |
Massachusetts, State Industrial Finance Agency Revenue, Groton School Issue, Series B, 3.48%*, 3/1/2028 | 9,000,000 | 9,000,000 |
| 93,610,000 |
Michigan 1.4% |
Detroit, MI, City School District, Series PT-1844, 144A, 3.39%*, 5/1/2011 (a) | 6,665,000 | 6,665,000 |
Detroit, MI, Revenue Anticipation Notes, 4.5%, 3/1/2008, ScotiaBank (b) | 20,600,000 | 20,652,476 |
Flushing, MI, General Obligation, Community Schools, Series R-4517, 144A, 3.51%*, 5/1/2023 | 5,135,000 | 5,135,000 |
Forest Hills, MI, Public Schools, Series 1791, 144A, 3.49%*, 5/1/2009 | 10,395,000 | 10,395,000 |
Michigan, Higher Education Facilities Authority Revenue, Spring Arbor University, 3.48%*, 11/1/2030, Comerica Bank (b) | 3,435,000 | 3,435,000 |
Michigan, Municipal Securities Trust Certificates, Michigan State Building, "A", Series 2006-277, 144A, 3.6%*, 10/7/2014 (a) | 40,000 | 40,000 |
Michigan, State Certificates of Participation, Series 530, 144A, 3.5%*, 9/1/2011 (a) | 4,625,000 | 4,625,000 |
| 50,947,476 |
Minnesota 0.7% |
Minnesota, Enhanced Return Puttable Floating Option, Tax-Exempt Receipts, Series 1061, 144A, 3.54%*, 6/1/2013 | 4,185,000 | 4,185,000 |
Minnesota, Municipal Securities Trust Certificates, Minneapolis & St. Paul, "A", Series 2007-290, 144A, 3.51%*, 12/23/2014 (a) | 4,985,000 | 4,985,000 |
Minnesota, State General Obligation, Series R-4065, 144A, 3.51%*, 8/1/2023 | 3,840,000 | 3,840,000 |
Minnesota, State Housing Finance Agency, Residential Housing Finance, Series M, AMT, 3.53%*, 1/1/2036 | 11,100,000 | 11,100,000 |
| 24,110,000 |
Missouri 1.0% |
Missouri, Development Finance Board, Air Cargo Facility Revenue, St. Louis Airport, AMT, 3.52%*, 3/1/2030, American National Bank & Trust (b) | 14,000,000 | 14,000,000 |
Missouri, State Health & Educational Facilities Authority Revenue, Lutheran Church, Series A, 3.59%*, 7/1/2029, Bank of America NA (b) | 9,735,000 | 9,735,000 |
Platte County, MO, Industrial Development Authority Industrial Revenue, Complete Home Concepts, Series A, AMT, 3.53%*, 1/1/2039, Columbian Bank (b) | 6,800,000 | 6,800,000 |
Springfield, MO, Public Utilities Revenue, Series 1559, 144A, 3.49%*, 8/1/2014 (a) | 6,790,000 | 6,790,000 |
| 37,325,000 |
Nebraska 0.3% |
Nebraska, Investment Finance Authority, Single Family Housing Revenue, Series B, AMT, 3.29%*, 9/1/2036 | 10,260,000 | 10,260,000 |
Nevada 0.1% |
Truckee Meadows, NV, Water Authority Revenue, Series 2007-120, 144A, 3.5%*, 7/1/2023 (a) | 4,000,000 | 4,000,000 |
New Hampshire 1.2% |
New Hampshire, Health & Education Facilities Authority Revenue, Currier Museum of Art, 3.46%*, 8/1/2036, Citizens Bank of NH (b) | 14,000,000 | 14,000,000 |
New Hampshire, Health & Education Facilities Authority Revenue, Kendal at Hanover, Series B, 3.46%*, 10/1/2030, RBS Citizens NA (b) | 13,895,000 | 13,895,000 |
New Hampshire, Health & Education Facilities Authority Revenue, LRG Healthcare, Series B, 3.5%*, 1/1/2032, JPMorgan Chase Bank (b) | 8,390,000 | 8,390,000 |
New Hampshire, State Business Finance Authority, Exempt Facilities Revenue, Waste Management of New Hampshire, Inc. Project, AMT, 3.53%*, 9/1/2012, Wachovia Bank NA (b) | 6,000,000 | 6,000,000 |
| 42,285,000 |
New Jersey 0.4% |
New Jersey, Economic Development Authority, Industrial Development Revenue, CST-Products LLC Project, AMT, 3.56%*, 4/1/2026, National Bank of Canada (b) | 3,000,000 | 3,000,000 |
New Jersey, Municipal Securities Trust Certificates, "A", Series 2006-3009, 144A, 3.51%*, 8/24/2023 (a) | 7,265,000 | 7,265,000 |
New Jersey, Reset Option Certificates Trust, Various States, Series R-684Z, 144A, 3.51%*, 12/15/2036 (a) | 2,580,000 | 2,580,000 |
| 12,845,000 |
New Mexico 0.5% |
Albuquerque, NM, Airport Facilities Revenue, Series A, 3.3%*, 7/1/2020 (a) | 5,000,000 | 5,000,000 |
Farmington, NM, Pollution Control Revenue, Arizona Public Service Co., Series C, AMT, 3.6%*, 9/1/2024, Barclays Bank PLC (b) | 3,700,000 | 3,700,000 |
New Mexico, UBS Municipal (CRVS), Various States, Series 07-23, AMT, 144A, 3.54%*, 2/1/2017 | 10,680,000 | 10,680,000 |
| 19,380,000 |
New York 0.4% |
Austin Trust, Various States, Series 2007-132, 144A, 3.47%*, 6/15/2030 | 12,500,000 | 12,500,000 |
New York, State Housing Finance Agency Revenue, Helena Housing, Series A, AMT, 3.32%*, 5/15/2036 | 2,000,000 | 2,000,000 |
| 14,500,000 |
North Carolina 1.4% |
North Carolina, Capital Facilities Finance Agency Educational Revenue, Forsyth Country Day School, 3.48%*, 12/1/2031, Branch Banking & Trust (b) | 11,295,000 | 11,295,000 |
North Carolina, Capital Facilities Finance Agency, Educational Facilities Revenue, Salem Academy & College Project, 3.48%*, 8/1/2030, Branch Banking & Trust (b) | 7,400,000 | 7,400,000 |
North Carolina, Medical Care Commission, Health Care Facilities Revenue, Lutheran Retirement Project, 3.46%*, 1/1/2037, SunTrust Bank (b) | 10,000,000 | 10,000,000 |
North Carolina, Medical Care Community, Health Care Facilities Revenue, First Mortgage-Friends Homes, 3.3%*, 9/1/2033, Bank of America NA (b) | 11,300,000 | 11,300,000 |
North Carolina, Medical Care Community, Retirement Facilities Revenue, First Mortgage-United Methodist: | | |
Series B, 3.48%*, 10/1/2008, Branch Banking & Trust (b) | 3,650,000 | 3,650,000 |
Series B, 3.48%*, 10/1/2035, Branch Banking & Trust (b) | 5,000,000 | 5,000,000 |
North Carolina, Medical Care Community Hospital Revenue, Southeastern Regional Medical Center, 3.48%*, 6/1/2037, Branch Banking & Trust (b) | 2,500,000 | 2,500,000 |
University of North Carolina, Board of Governors, 3.75%, 1/15/2008 | 1,000,000 | 1,000,000 |
| 52,145,000 |
Ohio 5.8% |
Akron, Bath & Copley, OH, Joint Township Hospital District Revenue, Health Care Facility, Summner Project, 3.5%*, 12/1/2032, KBC Bank NV (b) | 5,130,000 | 5,130,000 |
Athens County, OH, Port Authority, Housing Revenue, University Housing for Ohio, Inc. Project, 3.5%*, 6/1/2032, Wachovia Bank NA (b) | 9,175,000 | 9,175,000 |
Butler County, OH, Healthcare Facilities Revenue, LifeSphere Project, 3.46%*, 5/1/2030, US Bank NA (b) | 6,960,000 | 6,960,000 |
Cleveland, OH, Airport Systems Revenue, Series PT-3731, 144A, 3.38%*, 1/1/2021 (a) | 13,600,000 | 13,600,000 |
Cuyahoga, OH, Community College District, General Receipts, Series B, 3.46%*, 12/1/2032 (a) | 7,325,000 | 7,325,000 |
Cuyahoga County, OH, Hospital Revenue, Improvement Metrohealth System, 3.49%*, 2/1/2035, National City Bank (b) | 10,170,000 | 10,170,000 |
Franklin County, OH, Health Care Facilities Revenue, Ohio Presbyterian, Series A, 3.51%*, 7/1/2036, National City Bank (b) | 15,000,000 | 15,000,000 |
Huron County, OH, Hospital Facilities Revenue, Fisher-Titus Medical Center, Series A, 3.45%*, 12/1/2027, National City Bank (b) | 3,735,000 | 3,735,000 |
Montgomery County, OH, Catholic Health Revenue, Series B-1, 3.3%*, 4/1/2037 | 32,500,000 | 32,500,000 |
Ohio, Clipper Tax-Exempt Certificate Trust, Series 2006-8, AMT, 144A, 3.55%*, 11/1/2008 | 8,255,000 | 8,255,000 |
Ohio, Housing Finance Agency, Mortgage Revenue, Residential-Mortgage Backed, Series D, AMT, 3.39%*, 9/1/2036 | 45,000,000 | 45,000,000 |
Ohio, State Air Quality Development Authority Revenue, Pollution Control, FirstEnergy Generation, Series A, 3.32%*, 12/1/2023, KeyBank NA (b) | 25,000,000 | 25,000,000 |
Ohio, State Higher Educational Facility Revenue, Cleveland Institution Music Project, 3.47%*, 5/1/2030, National City Bank (b) | 6,000,000 | 6,000,000 |
Ohio, University of Toledo, General Receipts Bonds, 3.58%*, 6/1/2032 (a) | 16,650,000 | 16,650,000 |
Summit County, OH, Revenue Bonds, Western Reserve Academy Project, 3.46%*, 10/1/2027, KeyBank NA (b) | 5,135,000 | 5,135,000 |
| 209,635,000 |
Oklahoma 2.0% |
Blaine County, OK, Industrial Development Authority Revenue, Seaboard Project, AMT, 3.49%*, 11/1/2018, SunTrust Bank (b) | 5,200,000 | 5,200,000 |
Payne County, OK, Economic Development Authority, Student Housing Revenue, OSUF Phase III Project, 3.47%*, 7/1/2032 (a) | 68,120,000 | 68,120,000 |
| 73,320,000 |
Oregon 4.1% |
Austin Trust, Various States, Series 2007-313, 144A, 3.52%*, 12/1/2039 | 8,805,000 | 8,805,000 |
Oregon, Munitops II Trust: | | |
Series 2007-64, 144A, 3.5%*, 6/15/2015 (a) | 10,980,000 | 10,980,000 |
Series 2007-38, 144A, 3.52%*, 6/15/2015 (a) | 8,471,000 | 8,471,000 |
Oregon, State Department of Administrative Services, Certificates of Participation, Series PT-1679, 144A, 3.44%*, 11/1/2012 (a) | 4,125,000 | 4,125,000 |
Oregon, State General Obligation, Veterans Welfare, Series 86, 3.57%*, 6/1/2040 | 5,000,000 | 5,000,000 |
Oregon, State General Obligation, Tax Anticipation Notes, Series A, 4.5%, 6/30/2008 | 90,000,000 | 90,501,827 |
Portland, OR, Economic Development, Broadway Project, Series A, 3.46%*, 4/1/2035 (a) | 4,500,000 | 4,500,000 |
Salem, OR, Hospital Facility Authority Revenue, Capital Manor, Inc. Project: | | |
3.48%*, 5/1/2034, Bank of America NA (b) | 9,175,000 | 9,175,000 |
3.48%*, 5/1/2037, Bank of America NA (b) | 5,665,000 | 5,665,000 |
| 147,222,827 |
Pennsylvania 5.0% |
Allentown, PA, Area Hospital Authority Revenue, Sacred Heart Hospital, Series B, 3.46%*, 7/1/2023, Wachovia Bank NA (b) | 5,785,000 | 5,785,000 |
Beaver County, PA, Industrial Development Authority, Pollution Control Revenue, FirstEnergy, Series B, 3.28%*, 12/1/2041, Royal Bank of Scotland (b) | 5,000,000 | 5,000,000 |
Dauphin County, PA, General Authority, Education & Health Loan Program, 3.48%*, 11/1/2017 (a) | 18,965,000 | 18,965,000 |
Lehman Municipal Trust Receipts, Pennsylvania Economic Development, Series 06-FC3-D, AMT, 144A, 3.37%*, 6/1/2031 | 5,900,000 | 5,900,000 |
Luzerne County, PA, Industrial Development Authority Revenue, Pennsummit Tubular LLC, Series A, AMT, 3.55%*, 2/1/2021, Wachovia Bank NA (b) | 3,100,000 | 3,100,000 |
Moon, PA, Industrial Development Authority, First Mortgage Revenue, Providence Point Project, 3.5%*, 7/1/2038, Bank of Scotland (b) | 35,000,000 | 35,000,000 |
Pennsylvania, Economic Development Financing Authority, Solid Waste Disposal Revenue: | | |
Series MT-047, AMT, 144A, 3.4%*, 11/1/2021 | 14,265,000 | 14,265,000 |
Series V, AMT, 144A, 3.55%*, 11/1/2028 | 6,000,000 | 6,000,000 |
Pennsylvania, Housing Finance Agency, Single Family Mortgage, Series 82-B, AMT, 3.34%*, 4/1/2034 | 17,215,000 | 17,215,000 |
Pennsylvania, Puttable Floating Option Tax-Exempt Receipts, Series EC-1166, 144A, 3.52%*, 7/1/2020 (a) | 21,090,000 | 21,090,000 |
Pennsylvania, Reset Option Certificates Trust, Various States, Series R-682, 144A, 3.51%*, 11/1/2031 (a) | 2,600,000 | 2,600,000 |
Pennsylvania, State Higher Educational Facilities Authority Revenue, Association of Independent Colleges & Universities, Series L-3, 3.47%*, 5/1/2028, PNC Bank NA (b) | 5,100,000 | 5,100,000 |
Pennsylvania, State Higher Educational Facilities Authority, Hospital Revenue, Series MT-042, 144A, 3.54%*, 1/1/2024 | 6,385,000 | 6,385,000 |
Philadelphia, PA, School District, Tax & Revenue Anticipation Notes, Series A, 4.5%, 6/27/2008, Bank of America NA (b) | 35,000,000 | 35,172,455 |
| 181,577,455 |
Puerto Rico 0.0% |
Puerto Rico, Industrial Tourist Educational, Medical & Environmental Control Facilities, Bristol-Myers Squibb Project, AMT, 3.48%*, 12/1/2030 | 1,000,000 | 1,000,000 |
South Carolina 3.8% |
Charleston County, SC, School District, Tax Anticipation Notes, 4.25%, 4/15/2008 | 43,200,000 | 43,304,525 |
Greenwood County, SC, Exempt Facility Industrial Revenue, Fuji Photo Film Project, AMT, 3.6%*, 9/1/2011 | 3,300,000 | 3,300,000 |
South Carolina, Educational Facilities Authority for Private Nonprofit Institutions, Coker College, 3.5%*, 6/1/2019, Wachovia Bank NA (b) | 3,945,000 | 3,945,000 |
South Carolina, Jobs Economic Development Authority Revenue, Goodwill Industries of Lower South Carolina, 3.48%*, 10/1/2028, Wachovia Bank NA (b) | 16,620,000 | 16,620,000 |
South Carolina, Jobs Economic Development Authority Revenue, Goodwill Industries of Upper South Carolina, Inc., Project, 3.48%*, 9/1/2028, Branch Banking & Trust (b) | 5,500,000 | 5,500,000 |
South Carolina, Jobs Economic Development Authority Revenue, MUFC Central Energy Plant, 3.43%*, 8/15/2032, Bank of America NA (b) | 10,000,000 | 10,000,000 |
South Carolina, Jobs Economic Development Authority, Hospital Facilities Revenue, Sisters of Charity Hospitals, 3.46%*, 11/1/2032, Wachovia Bank NA (b) | 13,265,000 | 13,265,000 |
South Carolina, Lehman Municipal Trust Receipts, Various States, Series 2007-P93W-D, AMT, 144A, 3.36%*, 7/1/2037 | 9,975,000 | 9,975,000 |
South Carolina, Macron Trust, Various States, Series 2007-303, 144A, 3.52%*, 2/1/2012, Bank of America NA (b) | 9,080,000 | 9,080,000 |
South Carolina, Municipal Securities Trust Certificates, "A", Series 2005-245, 144A, 3.51%*, 5/15/2024 (a) | 10,755,000 | 10,755,000 |
South Carolina, Public Service Revenue, 3.68%, 11/1/2007 | 10,218,000 | 10,218,000 |
| 135,962,525 |
Tennessee 1.4% |
Chattanooga, TN, Health Educational & Housing Facility Board Revenue, Catholic Health, Series C, 3.3%*, 5/1/2039 | 8,650,000 | 8,650,000 |
Chattanooga, TN, Health Educational & Housing Facility Board Revenue, Siskin Rehab Project, 3.58%*, 6/1/2028, Bank of America NA (b) | 4,875,000 | 4,875,000 |
Memphis-Shelby County, TN, Sports Authority Income Revenue, Memphis Arena Project, Series A, 3.46%*, 11/1/2028 (a) | 24,150,000 | 24,150,000 |
Nashville & Davidson County, TN, Metropolitan Government Health & Educational Facilities Board Revenue, Housing Old Hickory Towers, Series A, AMT, 144A, 3.37%*, 1/1/2030, Wachovia Bank NA (b) | 3,596,000 | 3,596,000 |
Nashville & Davidson County, TN, Metropolitan Government Health & Educational Facilities Board Revenue, Jackson Grove Apartments, Series A, AMT, 3.51%*, 4/1/2036, Marshall & Ilsley (b) | 10,000,000 | 10,000,000 |
| 51,271,000 |
Texas 14.4% |
ABN AMRO, Munitops Certificates Trust: | | |
Series 2004-38, 144A, 3.5%*, 2/15/2011 | 9,205,000 | 9,205,000 |
Series 2006-59, 144A, 3.5%*, 8/1/2013 | 10,000,000 | 10,000,000 |
Series 2007-28, 144A, 3.5%*, 8/15/2015 (a) | 21,595,000 | 21,595,000 |
Series 2007-01, 144A, 3.5%*, 2/15/2027 | 15,650,000 | 15,650,000 |
Aldine, TX, Independent School District, Series 827, 144A, 3.5%*, 1/1/2012 | 2,895,000 | 2,895,000 |
Austin, TX, Electric Utility Systems Revenue, Series R-1057, 144A, 3.51%*, 11/15/2021 (a) | 4,745,000 | 4,745,000 |
Austin, TX, General Obligation, Various States, Series 2007-127, 144A, 3.5%*, 8/15/2028 (a) | 8,000,000 | 8,000,000 |
Austin, TX, Lehman Municipal Trust Receipts, Various States, Series K48W-D, 144A, 3.29%*, 8/1/2026 (a) | 8,505,000 | 8,505,000 |
Austin Trust, Various States, Series 2007-164, 144A, 3.5%*, 11/15/2033 (a) | 5,435,000 | 5,435,000 |
Clear Creek, TX, Independent School District, Series 04, 144A, 3.34%*, 2/15/2029 (a) | 4,495,000 | 4,495,000 |
Coppell, TX, Lehman Municipal Trust Receipts, Various States, Series 07-K12-D, 144A, 3.29%*, 8/15/2023 | 8,800,000 | 8,800,000 |
Corpus Christi, TX, Utility System Revenue, Series PT-1816, 144A, 3.58%*, 7/15/2010 (a) | 6,130,000 | 6,130,000 |
Cypress-FairBanks, TX, Independent School District, Series PT-2512, 144A, 3.58%*, 2/15/2022 | 6,740,000 | 6,740,000 |
Dallas, TX, Independent School District, Series 6038, 144A, 3.51%*, 8/15/2024 | 6,095,000 | 6,095,000 |
Harris County, TX: | | |
Series 1099, 144A, 3.49%*, 8/15/2009 (a) | 2,800,000 | 2,800,000 |
Series 1111, 144A, 3.49%*, 8/15/2009 (a) | 3,845,000 | 3,845,000 |
Harris County, TX, Tax Anticipation Notes: | | |
4.0%, 2/29/2008 | 40,000,000 | 40,044,207 |
4.5%, 2/29/2008 | 49,000,000 | 49,132,630 |
Hidalgo County, TX, General Obligation, Series R-2148, 144A, 3.51%*, 8/15/2024 (a) | 7,290,000 | 7,290,000 |
Houston, TX, General Obligation, 3.6%, 11/1/2007 | 10,750,000 | 10,750,000 |
Jefferson County, TX, Health Facilities Development Corp., Series A-83, 144A, 3.34%*, 8/15/2021 (a) | 3,525,000 | 3,525,000 |
Keller, TX, Independent School District, Series 2007-122, 144A, 3.5%*, 8/15/2032 | 3,085,000 | 3,085,000 |
Lubbock, TX, Independent School District, School Building, 3.45%*, 2/1/2030 | 8,550,000 | 8,550,000 |
North Texas, Higher Educational Authority, Inc., Student Loan Revenue, Series A, AMT, 3.38%*, 12/1/2041, Bank of America NA (b) | 25,000,000 | 25,000,000 |
Northside, TX, Independent School District, Series 1301, 144A, 3.5%*, 12/15/2013 | 4,595,000 | 4,595,000 |
Plano, TX, Independent School District, Series PT-2428, 144A, 3.58%*, 2/15/2024 | 5,355,000 | 5,355,000 |
San Antonio, TX, Electric & Gas Revenue, Series PT-1700, 144A, 3.58%*, 2/1/2010 | 6,465,000 | 6,465,000 |
San Antonio, TX, Water Revenue, Series 66, 144A, 3.5%*, 5/15/2037 (a) | 7,100,000 | 7,100,000 |
Texas, A&M University Revenues, Series 944, 144A, 3.5%*, 5/15/2013 | 1,780,000 | 1,780,000 |
Texas, Alliance Airport Authority, Inc., Special Facilities Revenue, Series 2088, AMT, 144A, 3.58%*, 4/1/2021 | 10,000,000 | 10,000,000 |
Texas, Capital Area Housing Finance Corp., Cypress Creek at River Apartments, AMT, 3.31%*, 10/1/2039, Citibank NA (b) | 5,500,000 | 5,500,000 |
Texas, Lehman Municipal Trust Receipts, Various States, Series 2007-P94W-D, AMT, 144A, 3.35%*, 3/1/2039 | 7,650,000 | 7,650,000 |
Texas, Lower Colorado River Authority, 3.68%, 12/6/2007 | 20,000,000 | 20,000,000 |
Texas, Macon Trust, Various States, Series 2007-307, AMT, 3.55%*, 4/1/2009 | 23,995,000 | 23,995,000 |
Texas, Municipal Securities Trust Certificates, "A", Series 2005-235, 144A, 3.51%*, 4/5/2023 (a) | 6,180,000 | 6,180,000 |
Texas, North East Independent School District, "A", 144A, 3.5%*, 8/1/2037 | 8,935,000 | 8,935,000 |
Texas, State Tax & Revenue Anticipation Notes, 4.5%, 8/28/2008 | 96,000,000 | 96,609,311 |
Texas, State Turnpike Authority, Central Texas Turnpike System Revenue, Series 1407, 144A, 3.5%*, 8/15/2042 (a) | 7,241,000 | 7,241,000 |
Texas, Upper Trinity Regional Water Distribution Revenue, 3.5%, 1/17/2008 | 15,550,000 | 15,550,000 |
Texas, Water Development Board Revenue, Series PT-2187, 144A, 3.52%*, 7/15/2021 | 14,670,000 | 14,670,000 |
Travis County, TX, Housing Finance Corp., Single Family Mortgage Revenue, Series P21U-D, AMT, 144A, 3.35%*, 6/1/2039 | 2,990,000 | 2,990,000 |
Wichita Falls, TX, Water & Sewer Revenue, Series 1713, 144A, 3.5%*, 8/1/2014 (a) | 3,425,000 | 3,425,000 |
| 520,352,148 |
Utah 1.5% |
Davis County, UT, Tax & Revenue Anticipation Notes, 4.5%, 12/27/2007 | 10,000,000 | 10,011,863 |
Utah, Water Finance Agency Revenue: | | |
Series A-12, 3.31%*, 10/1/2035 (a) | 10,000,000 | 10,000,000 |
Series A-16, 3.31%*, 7/1/2036 (a) | 5,000,000 | 5,000,000 |
Series A-17, 3.34%*, 12/1/2032 (a) | 10,000,000 | 10,000,000 |
Utah, Water Finance Agency Revenue, Tender Option: | | |
Series A-18, 3.34%*, 3/1/2027 (a) | 10,000,000 | 10,000,000 |
Series A-21, 3.34%*, 10/1/2037 (a) | 9,400,000 | 9,400,000 |
| 54,411,863 |
Vermont 0.6% |
Austin Trust, Various States, Series 2007-1004, 144A, AMT, 3.53%*, 5/1/2038 (a) | 7,340,000 | 7,340,000 |
Vermont, Housing Finance Agency, Series A, AMT, 3.38%*, 5/1/2037 (a) | 12,800,000 | 12,800,000 |
| 20,140,000 |
Virginia 3.4% |
Alexandria, VA, Redevelopment & Multi-Family Housing Authority Revenue, Fairfield Village Square Project, Series A, AMT, 3.5%*, 1/15/2039 | 4,000,000 | 4,000,000 |
Henrico County, VA, Economic Development Authority, Industrial Development Revenue, Colonial Mechanical Corp., AMT, 3.55%*, 8/1/2020, Wachovia Bank NA (b) | 3,600,000 | 3,600,000 |
James City County, VA, Economic Development Authority Residential Care Facility, Virginia United Methodist Homes, Series C, 3.47%*, 7/1/2017, LaSalle Bank NA (b) | 53,295,000 | 53,295,000 |
Madison County, VA, Industrial Development Authority, Educational Facilities Revenue, Woodberry Forest School, 3.58%*, 10/1/2037, SunTrust Bank (b) | 8,900,000 | 8,900,000 |
Norfolk, VA, State General Obligations, AMT, 3.52%*, 8/1/2037 | 12,000,000 | 12,000,000 |
RBC Municipal Products, Inc. Trust, Various States, Series C-2, AMT, 144A, 3.57%*, 1/1/2014, Royal Bank of Canada (b) | 9,935,000 | 9,935,000 |
Virginia Port Authority, Facility Revenue, "A", AMT, 144A, 3.6%*, 7/1/2036 (a) | 9,390,000 | 9,390,000 |
Winchester, VA, Industrial Development Authority, Puttable Floating Option Tax-Exempt Receipts, Series MT-522, 144A, 3.5%*, 1/21/2014 (a) | 16,495,000 | 16,495,000 |
Winchester, VA, Industrial Development Authority, Residential Care Facility Revenue, Westminster Cantenbury: | | |
Series B, 3.48%*, 1/1/2010, Branch Banking & Trust (b) | 350,000 | 350,000 |
Series B, 3.48%*, 1/1/2035, Branch Banking & Trust (b) | 3,000,000 | 3,000,000 |
| 120,965,000 |
Washington 2.7% |
King County, WA, Housing Authority Revenue, Summerfield Apartments Project, 3.52%*, 9/1/2035, US Bank NA (b) | 1,655,000 | 1,655,000 |
King County, WA, Public Hospital District No. 002, Series R-6036, 144A, 3.51%*, 12/1/2023 (a) | 1,265,000 | 1,265,000 |
Port Seattle, WA, 3.72%, 11/16/2007 | 14,505,000 | 14,505,000 |
Port Tacoma, WA, General Obligation, Series R-4036, 144A, 3.51%*, 12/1/2025 (a) | 5,815,000 | 5,815,000 |
Washington, Municipal Securities Trust Certificates: | | |
"A", Series 9058, 144A, 3.5%*, 9/23/2010 (a) | 9,990,000 | 9,990,000 |
"A", Series 2006-250, 144A, 3.5%*, 8/14/2015 (a) | 7,545,000 | 7,545,000 |
Washington, State General Obligation, Series PZ-106, 144A, 3.53%*, 1/1/2020 (a) | 8,370,000 | 8,370,000 |
Washington, State General Obligations, Series R-7059, 144A, 3.51%*, 1/1/2027 (a) | 5,100,000 | 5,100,000 |
Washington, State Health Care Facilities Authority Revenue, Seattle Cancer Care, 3.55%*, 3/1/2035, KeyBank NA (b) | 3,885,000 | 3,885,000 |
Washington, State Housing Finance Commission, Series PA-1430, AMT, 144A, 3.55%*, 6/1/2037 | 2,935,000 | 2,935,000 |
Washington, State Housing Finance Commission, Multi-Family Housing Revenue, Echo Lake Senior Apartment Project, AMT, 3.5%*, 7/15/2040 | 8,985,000 | 8,985,000 |
Washington, State Housing Finance Commission, Multi-Family Housing Revenue, Lake City Senior Apartments Project, Series A, AMT, 3.51%*, 7/1/2039 | 2,000,000 | 2,000,000 |
Washington, State Housing Finance Commission, Multi-Family Housing Revenue, Vintage Silverdale, Series A, AMT, 3.5%*, 9/15/2039 | 4,000,000 | 4,000,000 |
Washington, State Housing Finance Commission, Multi-Family Revenue, Cedar Ridge Retirement, Series A, AMT, 3.5%*, 10/1/2041, Wells Fargo Bank NA (b) | 3,525,000 | 3,525,000 |
Washington, State Housing Finance Commission, Multi-Family Revenue, Highland Park Apartments Project, Series A, AMT, 3.65%*, 7/15/2038, Bank of America NA (b) | 6,040,000 | 6,040,000 |
Washington, State Housing Finance Commission, Multi-Family Revenue, Merrill Gardens of Tacoma, Series A, AMT, 3.5%*, 9/15/2040, Bank of America NA (b) | 8,000,000 | 8,000,000 |
Washington, State Housing Finance Commission, Nonprofit Revenue, Eastside Catholic School, Series A, 3.47%*, 7/1/2038, KeyBank NA (b) | 4,000,000 | 4,000,000 |
| 97,615,000 |
Wisconsin 1.7% |
Milwaukee, WI, General Obligation, Series V8, 3.3%*, 2/1/2025 | 1,900,000 | 1,900,000 |
Milwaukee, WI, Sewer Revenue, Series R-4500, 144A, 3.51%*, 6/1/2022 (a) | 3,565,000 | 3,565,000 |
Milwaukee County, WI, Airport Revenue, Series PT-3726, AMT, 144A, 3.61%*, 12/1/2026 (a) | 2,625,000 | 2,625,000 |
Whitewater, WI, Industrial Development Revenue, MacLean Fogg Co. Project, AMT, 3.35%*, 12/1/2009, Bank of America NA (b) | 3,000,000 | 3,000,000 |
Wisconsin, Clipper Tax-Exempt Certificates Trust, 144A, 3.53%*, 9/1/2017 | 6,755,000 | 6,755,000 |
Wisconsin, Puttable Floating Options, Tax-Exempts Receipts, Wisconsin State Transition Revenue, Series PT-3929, 144A, 3.52%*, 7/1/2026 (a) | 6,830,000 | 6,830,000 |
Wisconsin, State Health & Educational Facilities Authority Revenue, Amery Regional Medical Center, Inc., Series A, 3.39%*, 5/1/2036, Fifth Third Bank (b) | 8,630,000 | 8,630,000 |
Wisconsin, State Health & Educational Facilities Authority Revenue, Franciscan Sisters, Series B, 3.46%*, 9/1/2033, Marshall & Ilsley (b) | 5,020,000 | 5,020,000 |
Wisconsin, State Health & Educational Facilities Authority Revenue, Marshfield Clinic, Series B, 3.47%*, 1/15/2036, Marshall & Ilsley (b) | 5,000,000 | 5,000,000 |
Wisconsin, State Health & Educational Facilities Authority Revenue, Mercy Alliance, Inc., 3.47%*, 6/1/2022, Marshall & Ilsley (b) | 10,000,000 | 10,000,000 |
Wisconsin, State Transportation, 3.6%, 11/9/2007 | 7,975,000 | 7,975,000 |
| 61,300,000 |
Wyoming 0.3% |
Sweetwater County, WY, Environmental Improvement Revenue, Simplot Phosphates LLC, AMT, 3.31%*, 7/1/2026, Rabobank Nederland (b) | 10,000,000 | 10,000,000 |
Multi-State 1.8% |
Branch Banking & Trust Municipal Trust, Various States: | | |
Series 1003, 144A, 3.52%*, 4/1/2022, Branch Banking & Trust (b) | 18,240,000 | 18,240,000 |
Series 1005, 144A, 3.52%*, 6/1/2022, Branch Banking & Trust (b) | 9,350,000 | 9,350,000 |
Puttable Floating Option, Tax-Exempt Receipts, Series PZP-020, 144A, 3.63%*, 8/1/2031 | 16,150,000 | 16,150,000 |
UBS Municipal (CRVS), Various States, Series 07-GM01, 144A, 3.53%*, 8/1/2036 | 20,250,000 | 20,250,000 |
| 63,990,000 |
Cash Account Trust (the "Trust") is registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end investment management company organized as a Massachusetts business trust.
The Trust offers three portfolios: Money Market Portfolio, Government & Agency Securities Portfolio and Tax-Exempt Portfolio (the "Portfolios").
Money Market Portfolio offers nine classes of shares: Capital Assets Funds Shares, Capital Assets Funds Preferred Shares, Davidson Cash Equivalent Shares, Davidson Cash Equivalent Plus Shares, Institutional Money Market Shares, Institutional Select Money Market Shares, Premier Money Market Shares, Premium Reserve Money Market Shares and Service Shares.
Government & Agency Securities Portfolio offers eight classes of shares: Capital Assets Funds Shares, Davidson Cash Equivalent Shares, Davidson Cash Equivalent Plus Shares, DWS Government & Agency Money Fund, DWS Government Cash Institutional Shares, Government Cash Managed Shares, Premier Money Market Shares and Service Shares.
Tax-Exempt Portfolio offers nine classes of shares: Capital Assets Funds Shares, Davidson Cash Equivalent Shares, DWS Tax-Exempt Cash Institutional Shares, DWS Tax-Exempt Money Fund, DWS Tax-Free Money Fund Class S, Premier Money Market Shares, Service Shares, Tax-Exempt Cash Managed Shares and Tax-Free Investment Class.
The financial highlights for all classes of shares, other than Service Shares, are provided separately and are available upon request.
Each Portfolio's investment income, realized and unrealized gains and losses, and certain Portfolio-level expenses and expense reductions, if any, are borne pro rata on the basis of relative net assets by the holders of all classes of shares of that Portfolio, except that each class bears certain expenses unique to that class such as distribution service fees, shareholder service fees and certain other class-specific expenses. Differences in class-level expenses may result in payment of different per share dividends by class. All shares of the Trust have equal rights with respect to voting subject to class-specific arrangements.
Each Portfolio's financial statements are prepared in accordance with accounting principles generally accepted in the United States of America which require the use of management estimates. Actual results could differ from those estimates. The policies described below are followed consistently by the Portfolios in the preparation of their financial statements.
In September 2006, the Financial Accounting Standards Board ("FASB") released Statement of Financial Accounting Standards No. 157, "Fair Value Measurements" ("FAS 157"). FAS 157 defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. FAS 157 is effective for fiscal years beginning after November 15, 2007. As of October 31, 2007, management does not believe the adoption of FAS 157 will impact the amounts reported in the financial statements, however, additional disclosures will be required about the inputs used to develop the measurements of fair value and the effect of certain of the measurements reported in the statement of operations for a fiscal period.
At April 30, 2007, the Money Market Portfolio had a net tax basis capital loss carryforward of approximately ($761,500) which may be applied against any realized net taxable capital gains of each succeeding year until fully utilized or until April 30, 2010 ($750,000) and April 30, 2015 ($11,500), the respective expiration dates, whichever occurs first.
In July 2006, FASB issued Interpretation No. 48 ("FIN 48"), "Accounting for Uncertainty in Income Taxes — an interpretation of FASB Statement No. 109" (the "Interpretation"). The Interpretation establishes for the Portfolios a minimum threshold for financial statement recognition of the benefit of positions taken in filing tax returns. Management has evaluated the application of FIN 48 and has determined there is no impact on the Portfolios' financial statements.
Permanent book and tax basis differences relating to shareholder distributions will result in reclassifications to paid in capital. Temporary book and tax basis differences will reverse in a subsequent period. There were no significant book-to-tax differences for the Portfolios.
The tax character of current year distributions will be determined at the end of the current fiscal year.
For the period from February 16, 2007 through March 16, 2010, the Advisor has agreed to contractually reduce its management fee for the Government & Agency Securities Portfolio such that the annual payable is limited to 0.15% of the Portfolio's average daily net assets.
Accordingly, for the six months ended October 31, 2007, the Advisor waived a portion of its management fee on the Government & Agency Securities Portfolio aggregating $170,283 and the amount charged aggregated $2,554,242.
Accordingly, for the six months ended October 31, 2007, the Portfolios incurred management fees equivalent to the following annualized effective rates of each Portfolio's average daily net assets:
For the period from May 1, 2007 through July 31, 2008, the Advisor had contractually agreed to waive all or a portion of its management fee and reimburse or pay certain operating expenses of the Service Shares of the Money Market Portfolio, Government & Agency Securities Portfolio and Tax-Exempt Portfolio to the extent necessary to maintain total operating expenses at 1.00% of average daily net assets (excluding certain expenses such as extraordinary expenses, taxes, brokerage, interest and organizational and offering costs).
The Advisor also has agreed to maintain expenses of certain other classes of the Trust. These rates are disclosed in the respective share classes' semiannual reports that are provided separately and are available upon request.
In addition, DWS-SDI provides information and administrative services for a fee ("Service Fee") for the shares listed in the following table. A portion of these fees may be paid pursuant to a Rule 12b-1 plan.
For the six months ended October 31, 2007, the Advisor has agreed to reimburse the Portfolios the following amounts, which represent a portion of the fee savings expected to be realized by the Advisor related to the outsourcing by the Advisor of certain administrative services to an unaffiliated service provider:
In addition, the Portfolios have entered into an arrangement with its custodian and transfer agent whereby credits realized as a result of uninvested cash balances are used to reduce a portion of each Portfolio's custodian expenses. During the six months ended October 31, 2007, each Portfolio's custodian fees were reduced as follows:
The Portfolios and other affiliated funds (the "Participants") share in a $750 million revolving credit facility administered by JPMorgan Chase Bank, N.A. for temporary or emergency purposes, including the meeting of redemption requests that otherwise might require the untimely disposition of securities. The Participants are charged an annual commitment fee which is allocated, based upon net assets, among each of the Participants. Interest is calculated at the Federal Funds Rate plus 0.35 percent. Each Portfolio may borrow up to a maximum of 33 percent of its net assets under the agreement.
During the six months ended October 31, 2007, the Advisor fully reimbursed Cash Account Trust: Tax-Exempt Portfolio $3,191 for losses on the disposal of securities purchased in violation of investment restrictions.
The amount of the loss was less than 0.01% of the Portfolio's average net assets, thus having no impact on the Portfolio's total return.
On February 16, 2007, Cash Account Trust: Government & Agency Securities Portfolio acquired all of the net assets of Investors Cash Trust: Government & Agency Securities Portfolio pursuant to an agreement and plan of reorganization approved by shareholders on January 25, 2007. The acquisition was accomplished by a tax-free exchange of 217,331,694 Service Shares and 81,291,534 DWS Government Cash Institutional Shares, respectively, of Investors Cash Trust: Government & Agency Securities Portfolio for 298,623,228 DWS Government Cash Institutional Shares of Cash Account Trust: Government & Agency Securities Portfolio, and 141,887,406 Government Cash Managed Shares of Investors Cash Trust: Government & Agency Securities Portfolio for 141,887,406 Government Cash Managed Shares of Cash Account Trust: Government & Agency Securities Portfolio outstanding on February 16, 2007. Investors Cash Trust: Government & Agency Securities Portfolio's net assets at that date of $440,488,675 were combined with those of Cash Account Trust: Government & Agency Securities Portfolio. The aggregate net assets of Cash Account Trust: Government & Agency Securities Portfolio immediately before the acquisition were $2,121,296,000. The combined net assets of Cash Account Trust: Government & Agency Securities Portfolio immediately following the acquisition were $2,561,784,675.
On March 19, 2007, Cash Account Trust: Government & Agency Securities Portfolio acquired all of the net assets of DWS Government & Agency Money Fund pursuant to an agreement and plan of reorganization approved by shareholders on January 25, 2007. The acquisition was accomplished by a tax-free exchange of 438,858,379 shares of DWS Government & Agency Money Fund for 438,858,379 DWS Government & Agency Money Fund shares of Cash Account Trust: Government & Agency Securities Portfolio outstanding on March 19, 2007. DWS Government & Agency Money Fund's net assets at that date of $438,851,445 were combined with those of Cash Account Trust: Government & Agency Securities Portfolio. The aggregate net assets of Cash Account Trust: Government & Agency Securities Portfolio immediately before the acquisition were $2,684,924,760. The combined net assets of Cash Account Trust: Government & Agency Securities Portfolio immediately following the acquisition were $3,123,776,205.
On March 19, 2007, Cash Account Trust: Tax-Exempt Portfolio acquired all of the net assets of DWS Tax-Free Money Fund, DWS Tax-Exempt Money Fund, and Cash Reserve Fund, Inc. Tax-Free Series pursuant to an agreement and plan of reorganization approved by shareholders on January 25, 2007 for DWS Tax-Free Money Fund and DWS Tax-Exempt Money Fund, and on February 7, 2007 for Cash Reserve Fund, Inc. Tax-Free Series. The acquisition was accomplished by a tax-free exchange of 173,481,265 shares of DWS Tax Free Money Fund, 640,985,030 shares of DWS Tax-Exempt Money Fund, 268,985,283 Tax-Free Shares and 562,136,851 Tax-Free Institutional Shares of Cash Reserve Fund, Inc. Tax-Free Series, respectively, for 173,481,265 DWS Tax-Free Money Fund Class S shares, 640,985,030 DWS Tax-Exempt Money Fund shares, 268,985,283 DWS Tax-Exempt Cash Institutional Shares and 562,136,851 Tax-Free Investment Class shares of Cash Account Trust: Tax-Exempt Portfolio, respectively, outstanding on March 19, 2007. DWS Tax Free Money Fund's, DWS Tax-Exempt Money Fund's, and Cash Reserve Fund, Inc. Tax-Free Series' net assets at that date of $173,664,739, $641,044,754, and $831,044,266, respectively, were combined with those of Cash Account Trust: Tax-Exempt Portfolio. The aggregate net assets of Cash Account Trust: Tax-Exempt Portfolio immediately before the acquisition were $1,363,024,909. The combined net assets of Cash Account Trust: Tax-Exempt Portfolio immediately following the acquisition were $3,008,778,668.
A description of each Portfolio's policies and procedures for voting proxies for portfolio securities and information about how each portfolio voted proxies related to its portfolio securities during the 12-month period ended June 30 is available on our Web site — www.dws-scudder.com (click on "proxy voting" at the bottom of the page) — or on the SEC's Web site — www.sec.gov. To obtain a written copy of each Portfolio's policies and procedures without charge, upon request, call us toll free at (800) 621-1048.
Following each Portfolio's fiscal first and third quarter-end, a complete portfolio holdings listing is filed with the SEC on Form N-Q. The form will be available on the SEC's Web site at www.sec.gov, and it also may be reviewed and copied at the SEC's Public Reference Room in Washington, D.C. Information on the operation of the SEC's Public Reference Room may be obtained by calling (800) SEC-0330.
DWS Scudder Distributors, Inc.
222 South Riverside Plaza
Chicago, IL 60606
The Board of Trustees, including the Independent Trustees, approved the renewal of your Portfolio's investment management agreement (the "Agreement") with Deutsche Investment Management Americas Inc. ("DIMA" or the "Advisor") in September 2007. As part of its review process, the Board requested and evaluated all information it deemed reasonably necessary to evaluate the Agreement. Over the course of several months, the Contract Review Committee, in coordination with the Fixed-Income Oversight Committee and the Operations Committee of the Board, reviewed comprehensive materials received from the Advisor, independent third parties and independent counsel. These materials included an analysis of the Portfolio's performance, fees and expenses, and profitability compiled by an independent fee consultant. The Board also received extensive information throughout the year regarding performance and operating results of the Portfolio. Based on their evaluation of the information provided, the Committees presented their findings and recommendations to the Independent Trustees as a group. The Independent Trustees then reviewed the Committees' findings and recommendations and presented their recommendations to the full Board. Throughout their consideration of the Agreement, the Independent Trustees were advised by their independent legal counsel and by an independent fee consultant.
In connection with the contract review process, the various Committees and the Board considered the factors discussed below, among others. The Board also considered that the Advisor and its predecessors have managed the Portfolio since its inception, and the Board believes that a long-term relationship with a capable, conscientious advisor is in the best interests of the Portfolio. The Board considered, generally, that shareholders invested in the Portfolio, or approved the investment management agreement for the Portfolio, knowing that the Advisor managed the Portfolio and knowing the investment management fee schedule. The Board considered Deutsche Bank's commitment that it will devote to the Advisor and its affiliates all attention and resources that are necessary to provide the Portfolio with top-quality investment management and shareholder, administrative and product distribution services.
On the basis of this evaluation and the ongoing review of investment results by the Fixed-Income Oversight Committee, the Board concluded that the nature, quality and extent of services provided by the Advisor historically have been and continue to be satisfactory, and that the Portfolio's gross performance over time was satisfactory.
On the basis of the information provided, the Board concluded that management fees were reasonable and appropriate in light of the nature, quality and extent of services provided by the Advisor. The Board noted that, although total expense ratios for certain share classes were above the median of the peer universe, such total expense ratios were within an acceptable range of the peer universe and consistent with reasonable expectations in light of the nature, quality and extent of services provided by the Advisor.
Based on all of the information considered and the conclusions reached, the Board (including a majority of the Independent Trustees) determined that the terms of the Agreement continue to be fair and reasonable and that the continuation of the Agreement is in the best interests of the Portfolio. No single factor was determinative in the Board's analysis.
The Board of Trustees, including the Independent Trustees, approved the renewal of your Portfolio's investment management agreement (the "Agreement") with Deutsche Investment Management Americas Inc. ("DIMA" or the "Advisor") in September 2007. As part of its review process, the Board requested and evaluated all information it deemed reasonably necessary to evaluate the Agreement. Over the course of several months, the Contract Review Committee, in coordination with the Fixed-Income Oversight Committee and the Operations Committee of the Board, reviewed comprehensive materials received from the Advisor, independent third parties and independent counsel. These materials included an analysis of the Portfolio's performance, fees and expenses, and profitability compiled by an independent fee consultant. The Board also received extensive information throughout the year regarding performance and operating results of the Portfolio. Based on their evaluation of the information provided, the Committees presented their findings and recommendations to the Independent Trustees as a group. The Independent Trustees then reviewed the Committees' findings and recommendations and presented their recommendations to the full Board. Throughout their consideration of the Agreement, the Independent Trustees were advised by their independent legal counsel and by an independent fee consultant.
In connection with the contract review process, the various Committees and the Board considered the factors discussed below, among others. The Board also considered that the Advisor and its predecessors have managed the Portfolio since its inception, and the Board believes that a long-term relationship with a capable, conscientious advisor is in the best interests of the Portfolio. The Board considered, generally, that shareholders invested in the Portfolio, or approved the investment management agreement for the Portfolio, knowing that the Advisor managed the Portfolio and knowing the investment management fee schedule. The Board considered Deutsche Bank's commitment that it will devote to the Advisor and its affiliates all attention and resources that are necessary to provide the Portfolio with top-quality investment management and shareholder, administrative and product distribution services.
On the basis of this evaluation and the ongoing review of investment results by the Fixed-Income Oversight Committee, the Board concluded that the nature, quality and extent of services provided by the Advisor historically have been and continue to be satisfactory, and that the Portfolio's gross performance over time was satisfactory.
On the basis of the information provided, the Board concluded that management fees were reasonable and appropriate in light of the nature, quality and extent of services provided by the Advisor. The Board noted that, although total expense ratios for certain share classes were above the median of the peer universe, such total expense ratios were within an acceptable range of the peer universe and consistent with reasonable expectations in light of the nature, quality and extent of services provided by the Advisor.
Based on all of the information considered and the conclusions reached, the Board (including a majority of the Independent Trustees) determined that the terms of the Agreement continue to be fair and reasonable and that the continuation of the Agreement and the adoption of the new management fee schedule upon the completion of the Merger is in the best interests of the Portfolio. No single factor was determinative in the Board's analysis.
The Board of Trustees, including the Independent Trustees, approved the renewal of your Portfolio's investment management agreement (the "Agreement") with Deutsche Investment Management Americas Inc. ("DIMA" or the "Advisor") in September 2007. As part of its review process, the Board requested and evaluated all information it deemed reasonably necessary to evaluate the Agreement. Over the course of several months, the Contract Review Committee, in coordination with the Fixed-Income Oversight Committee and the Operations Committee of the Board, reviewed comprehensive materials received from the Advisor, independent third parties and independent counsel. These materials included an analysis of the Portfolio's performance, fees and expenses, and profitability compiled by an independent fee consultant. The Board also received extensive information throughout the year regarding performance and operating results of the Portfolio. Based on their evaluation of the information provided, the Committees presented their findings and recommendations to the Independent Trustees as a group. The Independent Trustees then reviewed the Committees' findings and recommendations and presented their recommendations to the full Board. Throughout their consideration of the Agreement, the Independent Trustees were advised by their independent legal counsel and by an independent fee consultant.
In connection with the contract review process, the various Committees and the Board considered the factors discussed below, among others. The Board also considered that the Advisor and its predecessors have managed the Portfolio since its inception, and the Board believes that a long-term relationship with a capable, conscientious advisor is in the best interests of the Portfolio. The Board considered, generally, that shareholders invested in the Portfolio, or approved the investment management agreement for the Portfolio, knowing that the Advisor managed the Portfolio and knowing the investment management fee schedule. The Board considered Deutsche Bank's commitment that it will devote to the Advisor and its affiliates all attention and resources that are necessary to provide the Portfolio with top-quality investment management and shareholder, administrative and product distribution services.
On the basis of this evaluation and the ongoing review of investment results by the Fixed-Income Oversight Committee, the Board concluded that the nature, quality and extent of services provided by the Advisor historically have been and continue to be satisfactory, and that the Portfolio's gross performance over time was satisfactory.
On the basis of the information provided, the Board concluded that management fees were reasonable and appropriate in light of the nature, quality and extent of services provided by the Advisor. The Board noted that, although total expense ratios for certain classes were above the median of the peer universe, such total expense ratios were within an acceptable range of the peer universe and consistent with reasonable expectations in light of the nature, quality and extent of services provided by the Advisor.
Based on all of the information considered and the conclusions reached, the Board (including a majority of the Independent Trustees) determined that the terms of the Agreement continue to be fair and reasonable and that the continuation of the Agreement is in the best interests of the Portfolio. No single factor was determinative in the Board's analysis.
Pursuant to an Order entered into by Deutsche Investment Management Americas and affiliates (collectively, "DeAM") with the Attorney General of New York, I, Thomas H. Mack, have been appointed the Independent Fee Consultant for the DWS Scudder Funds. My duties include preparing an annual written evaluation of the management fees DeAM charges the Funds, considering among other factors the management fees charged by other mutual fund companies for like services, management fees DeAM charges other clients for like services, DeAM's costs of supplying services under the management agreements and related profit margins, possible economies of scale if a Fund grows larger, and the nature and quality of DeAM's services, including fund performance. This report summarizes my evaluation for 2007, including my qualifications, the evaluation process for each of the DWS Scudder Funds, consideration of certain complex-level factors, and my conclusions.
For more than 30 years I have served in various professional capacities within the investment management business. I have held investment analysis and advisory positions, including securities analyst, portfolio strategist and director of investment policy with a large investment firm. I have also performed business management functions, including business development, financial management and marketing research and analysis.
Since 1991, I have been an independent consultant within the asset management industry. I have provided services to over 125 client organizations, including investment managers, mutual fund boards, product distributors and related organizations. Over the past several years I have completed a number of assignments for mutual fund boards, specifically including assisting boards with management contract renewal.
I hold a Master of Business Administration degree, with highest honors, from Harvard University; and Master of Science and Bachelor of Science (highest honors) degrees from the University of California at Berkeley. I am an independent director and audit committee financial expert for two closed-end mutual funds, serve on the board of directors of a private market research company, and have served in various leadership and financial oversight capacities with non-profit organizations.
My work focused primarily on evaluating, fund-by-fund, the fees charged to each of the 136 Fund portfolios in the DWS Scudder Fund family. For each Fund, I considered each of the key factors mentioned above, as well as any other relevant information. In doing so I worked closely with the Funds' Independent Directors in their annual contract renewal process, as well as in their approval of contracts for several new funds (documented separately).
In evaluating each Fund's fees, I reviewed comprehensive materials provided by or on behalf of DeAM, including expense information prepared by Lipper Analytical, comparative performance information, profitability data, manager histories, and other materials. I also accessed certain additional information from the Lipper, Strategic Insight, and Morningstar databases and drew on my industry knowledge and experience.
To facilitate evaluating this considerable body of information, I prepared for each Fund a document summarizing the key data elements in each area as well as additional analytics discussed below. This made it possible to consider each key data element in the context of the others.
In the course of contract renewal, DeAM agreed to implement a number of fee and expense adjustments requested by the Independent Directors which will favorably impact future fees and expenses, and my evaluation includes the effects of these changes.
The competitive fee and expense evaluation for each fund focused on two primary comparisons:
The Fund's contractual management fee (the advisory fee plus the administration fee where applicable) compared with those of a group of typically 12-15 funds in the same Lipper investment category (e.g. Large Capitalization Growth) having similar distribution arrangements and being of similar size.
The Fund's total expenses compared with a broader universe of funds from the same Lipper investment category and having similar distribution arrangements.
These two comparisons provide a view of not only the level of the fee compared with funds of similar scale but also the total expense the Fund bears for all the services it receives, in comparison with the investment choices available in the Fund's investment category and distribution channel. The principal figure-of-merit used in these comparisons was the subject Fund's percentile ranking against peers.
DeAM provided management fee schedules for all of its US domiciled fund and non-fund investment management accounts in any of the investment categories where there is a DWS Scudder Fund. These similar products included the other DWS Scudder Funds, non-fund pooled accounts, institutional accounts and sub-advisory accounts. Using this information, I calculated for each Fund the fee that would be charged to each similar product, at the subject Fund's asset level.
Evaluating information regarding non-fund products is difficult because there are varying levels of services required for different types of accounts, with mutual funds generally requiring considerably more regulatory and administrative types of service as well as having more frequent cash flows than other types of accounts. Also, while mutual fund fees for similar fund products can be expected to be similar, there will be some differences due to different pricing conditions in different distribution channels (e.g. retail funds versus those used in variable insurance products), differences in underlying investment processes and other factors.
DeAM provided a detailed profitability analysis for each Fund. After making some adjustments so that the presentation would be more comparable to the available industry figures, I reviewed profit margins from investment management alone, from investment management plus other fund services (excluding distribution) provided to the Funds by DeAM (principally shareholder services), and DeAM profits from all sources, including distribution. A later section comments on overall profitability.
Economies of scale — an expected decline in management cost per dollar of fund assets as fund assets grow — are very rarely quantified and documented because of inherent difficulties in collecting and analyzing relevant data. However, in virtually every investment category that I reviewed, larger funds tend to have lower fees and lower total expenses than smaller funds. To see how each DWS Scudder Fund compares with this industry observation, I reviewed:
The trend in Fund assets over the last five years and the accompanying trend in total expenses. This shows if the Fund has grown and, if so, whether total expense (management fees as well as other expenses) have declined as a percent of assets.
Whether the Fund has break-points in its management fee schedule, the extent of the fee reduction built into the schedule and the asset levels where the breaks take effect, and in the case of a sub-advised Fund how the Fund's break-points compare with those of the sub-advisory fee schedule.
How the Fund's contractual fee schedule compares with trends in the industry data. To accomplish this, I constructed a chart showing how actual latest-fiscal-year contractual fees of the Fund and of other similar funds relate to average fund assets, with the subject Fund's contractual fee schedule superimposed.
The quality-of-service evaluation focused on investment performance, which is the principal result of the investment management service. Each Fund's performance was reviewed over the past 1, 3, 5 and 10 years, as applicable, and compared with that of other funds in the same investment category and with a suitable market index.
In addition, I calculated and reviewed risk-adjusted returns relative to an index of similar mutual funds' returns and a suitable market index. The risk-adjusted returns analysis provides a way of determining the extent to which the Fund's return comparisons are mainly the product of investment value-added (or lack thereof) or alternatively taking considerably more or less risk than is typical in its investment category.
I also received and considered the history of portfolio manager changes for each Fund, as this provided an important context for evaluating the performance results.
While this evaluation was conducted mainly at the individual fund level, there are some issues relating to the reasonableness of fees that can alternatively be considered across the whole fund complex:
I reviewed DeAM's profitability analysis for all DWS Scudder funds, with a view toward determining if the allocation procedures used were reasonable and how profit levels compared with public data for other investment managers.
I considered whether DeAM and affiliates receive any significant ancillary or "fall-out" benefits that should be considered in interpreting the direct profitability results. These would be situations where serving as the investment manager of the Funds is beneficial to another part of the Deutsche Bank organization.
I considered how aggregated DWS Scudder Fund expenses had varied over the years, by asset class and in the context of trends in asset levels.
I reviewed the structure of the DeAM organization, trends in staffing levels, and information on compensation of investment management and other professionals compared with industry data.
Based on the process and analysis discussed above, which included reviewing a wide range of information from management and external data sources and considering among other factors the fees DeAM charges other clients, the fees charged by other fund managers, DeAM's costs and profits associated with managing the Funds, economies of scale, possible fall-out benefits, and the nature and quality of services provided, in my opinion the management fees charged the DWS Scudder Funds are reasonable.
This privacy statement is issued by DWS Scudder Distributors, Inc., Deutsche Investment Management Americas Inc., DeAM Investor Services, Inc., DWS Trust Company and the DWS Funds.
In the normal course of business, clients give us nonpublic personal information on applications and other forms, on our Web sites, and through transactions with us or our affiliates. Examples of the nonpublic personal information collected are name, address, Social Security number and transaction and balance information. To be able to serve our clients, certain of this client information is shared with affiliated and nonaffiliated third-party service providers such as transfer agents, custodians, and broker-dealers to assist us in processing transactions and servicing your account with us. In addition, we may disclose all of the information we collect to companies that perform marketing services on our behalf or to other financial institutions with which we have joint marketing agreements. The organizations described above that receive client information may only use it for the purpose designated by the DWS Scudder Companies listed in the first paragraph of this Privacy Statement.
We may also disclose nonpublic personal information about you to other parties as required or permitted by law. For example, we are required or we may provide information to government entities or regulatory bodies in response to requests for information or subpoenas, to private litigants in certain circumstances, to law enforcement authorities, or any time we believe it necessary to protect the firm.
