UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
Investment Company Act file number 811-6239
Tax-Free Fund for Utah
(Exact name of Registrant as specified in charter)380 Madison Avenue
New York, New York 10017
(Address of principal executive offices) (Zip code)
Joseph P. DiMaggio
380 Madison Avenue
New York, New York 10017
(Name and address of agent for service)
Registrant's telephone number, including area code: (212) 697-6666
Date of fiscal year end: 6/30/11
Date of reporting period: 6/30/11
FORM N-CSR
ITEM 1. REPORTS TO STOCKHOLDERS.
Semi-Annual Report |
December 31, 2011 |
TAX-FREE FUND FOR UTAH A tax-free income investment |
Serving Utah Investors For Two Decades Tax-Free Fund For Utah “Know Your Destination” |
February, 2012
Dear Fellow Shareholder:
With all the turmoil going on in the financial markets lately, many people are asking themselves, “Just where should I put my money?”
While that would appear to be an important question to ask, we believe a more prudent question is, “What are you saving for?”
If it were possible to know in advance just when to buy or sell a security to maximize profit, constantly switching your investment vehicle, trying to capture the latest trend, could very well be uncomplicated. Unfortunately, “timing” the market with any degree of consistency is nearly impossible.
We have generally found that for the average investor switching continuously from one security to another in the management of his/her investment portfolio tends to be fruitless. Indeed, it may often prove to be an ill-advised exercise. With the degree of volatility inherent in the markets, missing an upturn or downturn could adversely affect your performance.
We believe the most practical way for you to invest is to focus on your goals, your time frame for achieving these goals, and your risk tolerance, instead of concentrating on what the market is or isn’t doing on a short-term basis.
As an investor in Tax-Free Fund for Utah, we think it’s important for you to focus on your ultimate destination – capital preservation and tax-free income – the key objective of your Fund.
Since there may be many twists and turns on the road to financial health, what steps can you take to increase your odds of reaching your final destination safely?
· | Get assistance, if you need it – a financial professional can help answer your questions and get you going in the right direction. |
· | Develop a map – where are you now? Where do you want to be? How long do you want to take to get there? |
· | Make a plan and stick to it. |
· | Periodically visit with your financial advisor to discuss your ongoing goals and circumstances. |
NOT A PART OF THE SEMI-ANNUAL REPORT
· | Develop an asset allocation model – in other words, diversify and don’t put all of your eggs in one basket. |
· | Rebalance your portfolio periodically in line with your goals and timeline. |
· | Stay focused on the long-term. You won’t stress about the little bumps along the way as long as you are sure you are on the right road. |
But, there is more to investing in Tax-Free Fund for Utah than just capital preservation. If keeping what you have were your only objective, your piggy bank could serve as just an appropriate depository.
Therefore, it should come as no surprise that another benefit that you gain from being an investor in Tax-Free Fund for Utah is monthly double tax-free income.
To use an analogy, people who buy the Fund probably wouldn’t buy a cow hoping to sell it when its market price increases at some future date. They would buy the cow and keep it for its continuing stream of milk. In the case of Tax-Free Fund for Utah, the continuing stream is in the form of tax-free dividends.
If capital preservation and tax-free income is your destination, your investment in Tax-Free Fund for Utah puts you on a path with a fund that seeks this investment objective. As long as your financial plan is a sound one and is in line with your goals, it may be best not to get off the road looking for a short-cut. Chances are, you just may get lost.
Sincerely,
Lacy B. Herrmann Founder and Chairman Emeritus | Diana P. Herrmann President |
Consideration should be given to the risks of investing, including potential loss of value, market risk, interest rate risk, credit risk, and geographic concentration. Past performance does not guarantee future results. Investment return and principal value will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. For certain investors, some dividends may be subject to Federal and state taxes, including the Alternative Minimum Tax (AMT).
NOT A PART OF THE SEMI-ANNUAL REPORT
TAX-FREE FUND FOR UTAH
SCHEDULE OF INVESTMENTS
DECEMBER 31, 2011 (unaudited)
Rating | |||||||||
Principal | Moody’s, S&P | ||||||||
Amount | General Obligation Bonds (15.9%) | and Fitch | Value | ||||||
City, County and State (5.5%) | |||||||||
Anderson, Indiana San District | |||||||||
$ | 505,000 | 4.600%, 07/15/23 AMBAC Insured | A1/A-/NR | $ | 527,154 | ||||
Clark County, Nevada, Refunding | |||||||||
2,000,000 | 5.000%, 11/01/28 AGMC Insured | Aa1/AA+/AA | 2,115,580 | ||||||
Clark County, Nevada, Refunding, Series B | |||||||||
1,000,000 | 5.000%, 07/01/23 | Aa1/AA+/NR | 1,133,540 | ||||||
Coral Canyon, Utah Special Service District | |||||||||
120,000 | 4.850%, 07/15/17 | NR/NR/NR* | 117,103 | ||||||
580,000 | 5.700%, 07/15/18 | NR/NR/NR* | 573,777 | ||||||
Harris County, Texas Utility District #268 | |||||||||
905,000 | 4.375%, 09/01/27 Radian Insured | NR/NR/NR* | 900,385 | ||||||
Houston, Texas Public Improvement | |||||||||
1,000,000 | 5.000%, 03/01/29 | Aa2/AA/NR | 1,116,970 | ||||||
King County, Washington Unlimited Tax | |||||||||
1,000,000 | 4.500%, 12/01/25 AGMC Insured | Aa1/AA+/NR | 1,083,420 | ||||||
Laredo, Texas | |||||||||
500,000 | 4.500%, 02/15/24 NPFG Insured | Aa2/AA-/AA | 525,600 | ||||||
Las Vegas Valley, Nevada Water District Refunding | |||||||||
& Water Improvement | |||||||||
1,500,000 | 5.000%, 06/01/27 Series A NPFG-FGIC Insured | ||||||||
(pre-refunded) | Aa2/AA+/NR | 1,563,705 | |||||||
McKinney, Texas | |||||||||
1,700,000 | 4.500%, 08/15/23 Syncora Guarantee, Inc. Insured | Aa1/AA+/NR | 1,813,016 | ||||||
1,375,000 | 5.000%, 08/15/24 AMBAC Insured | Aa1/AA+/NR | 1,521,520 | ||||||
445,000 | 4.375%, 08/15/25 NPFG Insured | Aa1/AA+/NR | 476,177 | ||||||
Montgomery County, Texas | |||||||||
2,975,000 | 5.250%, 03/01/32 | Aa2/AA/NR | 3,282,080 | ||||||
Puerto Rico Commonwealth Refunding, Public | |||||||||
Improvement Series C | |||||||||
500,000 | 5.375%, 07/01/28 AGMC Insured | Aa3/AA-/BBB+ | 522,145 | ||||||
San Patricio County, Texas | |||||||||
450,000 | 4.600%, 04/01/25 AMBAC Insured | Aa3/NR/NR | 473,310 | ||||||
Texas State | |||||||||
165,000 | 4.500%, 08/01/22 | Aaa/AA+/AAA | 186,460 |
1
TAX-FREE FUND FOR UTAH
SCHEDULE OF INVESTMENTS (continued)
DECEMBER 31, 2011 (unaudited)
Rating | |||||||||
Principal | Moody’s, S&P | ||||||||
Amount | General Obligation Bonds (continued) | and Fitch | Value | ||||||
City, County and State (continued) | |||||||||
Washington State, Series D | |||||||||
$ | 2,000,000 | 5.000%, 01/01/29 AMBAC Insured | Aa1/AA+/AA+ | $ | 2,122,460 | ||||
Washington State Various Purpose, Series A | |||||||||
1,405,000 | 5.000%, 07/01/30 | Aa1/AA+/AA+ | 1,549,223 | ||||||
Total City, County and State | 21,603,625 | ||||||||
Local Public Property (4.3%) | |||||||||
Clark County, Nevada, Refunding, Series A | |||||||||
2,280,000 | 5.000%, 12/01/29 | Aa1/AA+/NR | 2,452,345 | ||||||
North Las Vegas, Nevada Building | |||||||||
4,440,000 | 5.000%, 05/01/28 NPFG Insured | A2/A+/A | 4,626,924 | ||||||
North Las Vegas, Nevada Refunding Ltd. Tax | |||||||||
1,000,000 | 5.000%, 06/01/36 | A2/A+/A | 1,014,950 | ||||||
Utah State, Series A | |||||||||
2,500,000 | 5.000%, 07/01/26 | Aaa/AAA/AAA | 2,994,675 | ||||||
Washoe County, Nevada Refunding Reno Sparks | |||||||||
Convention | |||||||||
2,000,000 | 5.000%, 07/01/28 | Aa2/AA/NR | 2,159,900 | ||||||
Williamson County, Texas | |||||||||
1,610,000 | 5.000%, 02/15/23 NPFG Insured | Aa1/AAA/NR | 1,735,387 | ||||||
1,445,000 | 5.000%, 02/15/23 NPFG Insured (pre-refunded) | Aa1/BBB/NR | 1,582,333 | ||||||
Total Local Public Property | 16,566,514 | ||||||||
School District (4.5%) | |||||||||
Alamo, Texas Community College District, Series A | |||||||||
1,000,000 | 5.000%, 08/15/37 | Aaa/AA+/NR | 1,000,690 | ||||||
Clark County, Nevada School District Series A | |||||||||
500,000 | 5.000%, 06/15/28 | Aa2/AA/AA- | 531,650 | ||||||
Comal, Texas Independent School District | |||||||||
2,000,000 | 5.000%, 02/01/33 NPFG Insured | Aaa/BBB/AAA | 2,154,640 | ||||||
Freemont County, Wyoming School District #14 | |||||||||
355,000 | 4.500%, 06/15/26 | NR/A+/BBB | 377,912 | ||||||
Granite School District, Utah, Salt Lake County | |||||||||
School Building | |||||||||
1,000,000 | 5.000%, 06/01/31 | Aaa/NR/AAA | 1,132,150 |
2
TAX-FREE FUND FOR UTAH
SCHEDULE OF INVESTMENTS (continued)
DECEMBER 31, 2011 (unaudited)
Rating | |||||||||
Principal | Moody’s, S&P | ||||||||
Amount | General Obligation Bonds (continued) | and Fitch | Value | ||||||
School District (continued) | |||||||||
Houston, Texas Independent School District | |||||||||
$ | 3,000,000 | 5.000%, 02/15/28 AGMC Insured | Aaa/AA+/NR | $ | 3,164,010 | ||||
Magnolia, Texas Independent School District | |||||||||
Schoolhouse | |||||||||
1,495,000 | 5.000%, 08/15/25 NPFG-FGIC Insured | A1/NR/NR | 1,620,012 | ||||||
Navasota, Texas Independent School District | |||||||||
475,000 | 5.000%, 08/15/23 NPFG-FGIC Insured | A1/NR/NR | 499,163 | ||||||
North East Independent School District , Texas | |||||||||
1,000,000 | 5.000%, 08/01/33 NPFG Insured | Aaa/AAA/NR | 1,058,550 | ||||||
Port Arthur, Texas Independent School District | |||||||||
School Building | |||||||||
2,000,000 | 5.250%, 02/15/30 NPFG-FGIC Insured | Aa3/NR/AA- | 2,075,920 | ||||||
Uintah County, Utah School District | |||||||||
455,000 | 4.250%, 02/01/24 | Aaa/NR/NR | 488,788 | ||||||
Wasatch County, Utah School District | |||||||||
880,000 | 5.000%, 06/01/25 State of Utah Guaranty | Aaa/NR/NR | 950,972 | ||||||
Washoe County, Nevada School District | |||||||||
200,000 | 4.625%, 06/01/23 NPFG-FGIC Insured | Aa2/AA/AA- | 205,270 | ||||||
Washoe County, Nevada School District Refunding | |||||||||
& School Improvement, Series A | |||||||||
2,000,000 | 5.000%, 06/01/30 | Aa2/AA/NR | 2,142,460 | ||||||
Total School District | 17,402,187 | ||||||||
Transportation (0.3%) | |||||||||
Texas State Transportation Commission Mobility Fund | |||||||||
1,140,000 | 5.000%, 04/01/27 Series A | Aaa/AA+/AAA | 1,284,461 | ||||||
Utilities (1.3%) | |||||||||
Central Utah Water Conservancy District Refunding, | |||||||||
Series B | |||||||||
765,000 | 5.000%, 04/01/28 | NR/AA+/AAA | 882,290 | ||||||
Las Vegas Valley, Nevada Water District Refunding | |||||||||
1,000,000 | 5.000%, 06/01/30 Series C | Aa2/AA+/NR | 1,079,340 |
3
TAX-FREE FUND FOR UTAH
SCHEDULE OF INVESTMENTS (continued)
DECEMBER 31, 2011 (unaudited)
Rating | |||||||||
Principal | Moody’s, S&P | ||||||||
Amount | General Obligation Bonds (continued) | and Fitch | Value | ||||||
Utilities (continued) | |||||||||
San Angelo, Texas Certificates of Participation | |||||||||
Obligation, Series A | |||||||||
$ | 2,765,000 | 5.000%, 02/15/30 | Aa2/AA/AA+ | $ | 3,033,067 | ||||
Total Utilities | 4,994,697 | ||||||||
Total General Obligation Bonds | 61,851,484 | ||||||||
Revenue Bonds (80.8%) | |||||||||
Airport (2.8%) | |||||||||
Alaska State International Airport Revenue | |||||||||
35,000 | 5.000%, 10/01/24 AMBAC Insured AMT | Aa3/NR/A+ | 35,022 | ||||||
Broward County, Florida Airport System Revenue | |||||||||
Refunding | |||||||||
1,000,000 | 5.375%, 10/01/29 Series O | A1/A+/A | 1,088,590 | ||||||
Clark County, Nevada Passenger Facility Charge | |||||||||
255,000 | 4.750%, 07/01/22 NPFG Insured AMT | Aa3/A+/A | 255,694 | ||||||
Clark County, Nevada Passenger Facilities Charge | |||||||||
Revenue Las Vegas-McCarran International Airport | |||||||||
1,500,000 | 5.000%, 07/01/30 | Aa3/A+/NR | 1,582,800 | ||||||
Hillsborough County, Florida Aviation Authority | |||||||||
2,185,000 | 5.250%, 10/01/23 NPFG Insured AMT | A1/A+/AA- | 2,282,735 | ||||||
Miami-Dade County, Florida Aviation Revenue | |||||||||
Miami International Airport, Series A-1 | |||||||||
1,675,000 | 5.000%, 10/01/22 | A2/A-/A | 1,868,010 | ||||||
600,000 | 5.000%, 10/01/24 NPFG-FGIC Insured AMT | A2/A-/A | 600,258 | ||||||
Orlando Florida Airport | |||||||||
1,950,000 | 5.500%, 10/01/23 AMT | Aa3/A+/AA- | 2,184,215 | ||||||
Reno-Tahoe, Nevada Airport Authority Revenue | |||||||||
Refunding | |||||||||
1,000,000 | 5.000%, 07/01/26 AGMC Insured | Aa3/NR/A | 1,026,030 | ||||||
Total Airport | 10,923,354 | ||||||||
Education (10.3%) | |||||||||
Florida State Board of Education Public Education | |||||||||
210,000 | 4.500%, 06/01/25 AGMC Insured | Aa1/AAA/AAA | 222,634 |
4
TAX-FREE FUND FOR UTAH
SCHEDULE OF INVESTMENTS (continued)
DECEMBER 31, 2011 (unaudited)
Rating | |||||||||
Principal | Moody’s, S&P | ||||||||
Amount | Revenue Bonds (continued) | and Fitch | Value | ||||||
Education (continued) | |||||||||
Franklin, Indiana Community Multi-School Building | |||||||||
Corp. First Mortgage | |||||||||
$ | 750,000 | 5.000%, 01/15/29 AGMC Insured | Aa3/AA-/NR | $ | 785,340 | ||||
Hammond, Indiana School Building Corp. First | |||||||||
Mortgage | |||||||||
1,030,000 | 5.000%, 07/15/31 NPFG Insured | Baa2/AA+/NR | 1,062,939 | ||||||
Hillsborough County, Florida School Board COP | |||||||||
510,000 | 4.250%, 07/01/26 NPFG Insured | Aa2/AA-/AA | 525,096 | ||||||
Laredo, Texas Independent School District Public | |||||||||
Facility Corp. | |||||||||
190,000 | 5.000%, 08/01/24 AMBAC Insured | NR/A/A+ | 190,112 | ||||||
Nevada System Higher Education COP | |||||||||
1,000,000 | 5.000%, 07/01/25 AMBAC Insured | NR/AA-/AA | 1,068,830 | ||||||
Salt Lake County, Utah Westminster College Project | |||||||||
825,000 | 4.750%, 10/01/20 | NR/BBB/NR | 851,177 | ||||||
870,000 | 4.750%, 10/01/21 | NR/BBB/NR | 891,419 | ||||||
2,300,000 | 5.000%, 10/01/22 | NR/BBB/NR | 2,353,314 | ||||||
1,250,000 | 5.000%, 10/01/25 | NR/BBB/NR | 1,266,050 | ||||||
600,000 | 5.000%, 10/01/27 | NR/BBB/NR | 604,902 | ||||||
2,025,000 | 5.125%, 10/01/28 | NR/BBB/NR | 2,038,871 | ||||||
Southern Utah University Revenue Refunding, | |||||||||
Auxiliary System Student Building Fee | |||||||||
875,000 | 4.000%, 05/01/19 | NR/AA/NR | 996,187 | ||||||
Texas A&M University Revenue | |||||||||
1,700,000 | 5.000%, 07/01/34 | Aaa/AAA/AAA | 1,946,653 | ||||||
Texas State University System Financing Revenue | |||||||||
2,000,000 | 5.250%, 03/15/25 | Aa2/AA-/AA | 2,287,820 | ||||||
Tyler, Texas Independent School District | |||||||||
325,000 | 5.000%, 02/15/26 AGMC Insured | Aa3/AA/AA+ | 343,665 | ||||||
University of Nevada (University Revenues) | |||||||||
115,000 | 4.500%, 07/01/24 ETM NPFG Insured | Aa2/BBB/NR | 120,943 | ||||||
75,000 | 4.500%, 07/01/24 NPFG Insured | Aa2/AA-/NR | 77,843 |
5
TAX-FREE FUND FOR UTAH
SCHEDULE OF INVESTMENTS (continued)
DECEMBER 31, 2011 (unaudited)
Rating | |||||||||
Principal | Moody’s, S&P | ||||||||
Amount | Revenue Bonds (continued) | and Fitch | Value | ||||||
Education (continued) | |||||||||
University of Nevada (University Revenues) | |||||||||
Community College | |||||||||
$ | 2,000,000 | 5.000%, 07/01/35 Series A AGMC Insured | Aa2/AA-/NR | $ | 2,044,240 | ||||
University of Utah COP | |||||||||
3,170,000 | 4.350%, 12/01/26 AMBAC Insured | Aa2/AA-/NR | 3,298,797 | ||||||
Utah State Board of Regents Auxiliary & Campus | |||||||||
Facility | |||||||||
1,000,000 | 4.125%, 04/01/20 NPFG Insured | Aa2/AA/NR | 1,058,230 | ||||||
Utah State Board of Regents Lease Revenue | |||||||||
410,000 | 4.500%, 05/01/20 AMBAC Insured | NR/AA/NR | 447,253 | ||||||
425,000 | 4.500%, 05/01/21 AMBAC Insured | NR/AA/NR | 462,697 | ||||||
450,000 | 4.625%, 05/01/22 AMBAC Insured | NR/AA/NR | 488,929 | ||||||
120,000 | 4.650%, 05/01/23 AMBAC Insured | NR/AA/NR | 129,431 | ||||||
Utah State Board of Regents Office Facility Revenue | |||||||||
450,000 | 5.050%, 02/01/20 NPFG Insured | Baa2/AA/NR | 450,954 | ||||||
360,000 | 5.125%, 02/01/22 NPFG Insured | Baa2/AA/NR | 360,706 | ||||||
1,045,000 | 5.000%, 04/01/23 NPFG Insured | Aa2/AA-/NR | 1,132,540 | ||||||
Warsaw, Indiana Multi-School Building Corp., First | |||||||||
Mortgage, Series B | |||||||||
1,800,000 | 5.450%, 01/15/28 | NR/AA+/NR | 1,996,470 | ||||||
Washington State Higher Education Facilities | |||||||||
Authority Revenue, Refunding, Gonzaga | |||||||||
University Project | |||||||||
950,000 | 5.000%, 04/01/24 Series B | A3/NR/NR | 1,031,519 | ||||||
Washington State Higher Education Facilities | |||||||||
Authority Revenue, Seattle University Project | |||||||||
1,250,000 | 5.250%, 11/01/27 AMBAC Insured | NR/A/NR | 1,351,937 | ||||||
Washington State University Revenue | |||||||||
735,000 | 4.600%, 10/01/29 AGMC Insured | Aa2/AA-/NR | 780,776 | ||||||
Wayne Township, Indiana Marion City School | |||||||||
Building Corp. | |||||||||
1,120,000 | 5.000%, 07/15/26 NPFG-FGIC Insured | NR/AA+/NR | 1,219,467 |
6
TAX-FREE FUND FOR UTAH
SCHEDULE OF INVESTMENTS (continued)
DECEMBER 31, 2011 (unaudited)
Rating | |||||||||
Principal | Moody’s, S&P | ||||||||
Amount | Revenue Bonds (continued) | and Fitch | Value | ||||||
Education (continued) | |||||||||
Weber State University, Utah Student Facilities | |||||||||
System | |||||||||
$ | 1,825,000 | 4.400%, 04/01/27 AGMC Insured | NR/AA/NR | $ | 1,895,828 | ||||
1,275,000 | 5.125%, 04/01/32 NPFG Insured | Baa2/AA/NR | 1,322,035 | ||||||
Zionsville, Indiana Community Schools Building | |||||||||
Corp. First Mortgage, Series Z | |||||||||
2,645,000 | 5.000%, 07/15/22 AGMC Insured | Aa3/AA-/NR | 2,825,389 | ||||||
Total Education | 39,930,993 | ||||||||
Education - Charter Schools (9.6%) | |||||||||
La Vernia, Texas Higher Education Finance Corp., | |||||||||
Jubilee Academy | |||||||||
3,480,300 | 6.500%, 03/15/38 | NR/NR/NR* | 3,115,947 | ||||||
Utah County, Utah Charter School Revenue | |||||||||
Lakeview Academy | |||||||||
260,000 | 5.350%, 07/15/17 Series A | NR/NR/NR* | 247,567 | ||||||
Utah County, Utah Charter School Revenue Lincoln | |||||||||
Academy | |||||||||
800,000 | 5.450%, 06/15/17 Series A | NR/NR/NR* | 774,744 | ||||||
Utah County, Utah Charter School Revenue | |||||||||
Renaissance Academy | |||||||||
275,000 | 5.350%, 07/15/17 Series A | NR/NR/NR* | 266,313 | ||||||
Utah County, Utah School Facility, Ranches | |||||||||
Academy | |||||||||
1,175,000 | 6.500%, 12/01/25 | NR/NR/NR* | 1,046,408 | ||||||
Utah State Charter School Finance Authority Entheos | |||||||||
Academy | |||||||||
5,750,000 | 6.750%, 08/15/38 | NR/NR/NR* | 5,158,670 | ||||||
Utah State Charter School Finance Authority Fast | |||||||||
Forward Academy | |||||||||
2,986,800 | 6.500%, 11/15/37 144A | NR/NR/NR* | 2,519,903 | ||||||
Utah State Charter School Finance Authority George | |||||||||
Washington Academy | |||||||||
1,000,000 | 6.750%, 07/15/28 | NR/BB+/NR* | 960,610 |
7
TAX-FREE FUND FOR UTAH
SCHEDULE OF INVESTMENTS (continued)
DECEMBER 31, 2011 (unaudited)
Rating | |||||||||
Principal | Moody’s, S&P | ||||||||
Amount | Revenue Bonds (continued) | and Fitch | Value | ||||||
Education - Charter Schools (continued) | |||||||||
Utah State Charter School Finance Authority Legacy | |||||||||
Preparatory Academy | |||||||||
$ | 5,580,000 | 6.750%, 06/15/38 | NR/NR/NR* | $ | 5,598,693 | ||||
7,670,000 | 7.250%, 06/15/39 | NR/NR/NR* | 7,675,906 | ||||||
Utah State Charter School Finance Authority, | |||||||||
Refunding & Improvement, Davinci Academy | |||||||||
Series 2011A | |||||||||
1,000,000 | 7.050%, 09/15/26 | NR/BBB-/NR | 1,022,910 | ||||||
Utah State Charter School Finance Authority | |||||||||
Rockwell Charter School | |||||||||
900,000 | 6.750%, 08/15/28 | NR/NR/NR* | 683,514 | ||||||
Utah State Charter School Finance Authority Ronald | |||||||||
Wilson Reagan Academy | |||||||||
1,110,000 | 5.750%, 02/15/22 Series A | NR/NR/NR* | 986,179 | ||||||
Utah State Charter School Finance Authority | |||||||||
Venture Academy | |||||||||
7,120,000 | 6.750%, 11/15/38 | NR/NR/NR* | 7,122,848 | ||||||
Total Education - Charter Schools | 37,180,212 | ||||||||
Healthcare (0.9% | |||||||||
Harris County, Texas Health Facility Development | |||||||||
Corp. | |||||||||
145,000 | 5.000%, 11/15/28 AMBAC Insured | NR/A-/NR | 140,968 | ||||||
Indiana Finance Authority Hospital Revenue, | |||||||||
Parkview Health System | |||||||||
1,650,000 | 5.875%, 05/01/29 | A1/A+/NR | 1,702,322 | ||||||
Tarrant County, Texas Cultural Education Facilities | |||||||||
Finance Corp. Hospital Refunding, Scott & White | |||||||||
Healthcare Project | |||||||||
1,000,000 | 5.250%, 08/15/25 | A1/A/AA- | 1,078,170 | ||||||
Washington State Health Care Facilities Authority | |||||||||
Revenue, Cooperative of Puget Sound | |||||||||
500,000 | 5.375%, 12/01/17 AMBAC Insured | NR/BBB-/A- | 505,055 | ||||||
Total Healthcare | 3,426,515 |
8
TAX-FREE FUND FOR UTAH
SCHEDULE OF INVESTMENTS (continued)
DECEMBER 31, 2011 (unaudited)
Rating | |||||||||
Principal | Moody’s, S&P | ||||||||
Amount | Revenue Bonds (continued) | and Fitch | Value | ||||||
Hospital (3.3%) | |||||||||
Campbell County, Wyoming Hospital District, | |||||||||
Hospital Revenue, Memorial Hospital Project | |||||||||
$ | 1,040,000 | 5.000%, 12/01/20 | NR/A-/NR | $ | 1,102,618 | ||||
1,000,000 | 5.500%, 12/01/34 | NR/A-/NR | 1,017,250 | ||||||
Harris County, Texas Health Facility Development | |||||||||
Corp. Christus Health Series A-6 | |||||||||
1,000,000 | 4.750%, 07/01/30 AGMC Insured | Aa3/AA-/NR | 1,037,480 | ||||||
King County, Washington Public Hospital District | |||||||||
No. 002, Refunding, Evergreen Healthcare | |||||||||
1,000,000 | 5.250%, 12/01/28 | Aa3/A+/NR | 1,071,930 | ||||||
Reno, Nevada Hospital Revenue, Washoe Medical | |||||||||
Center | |||||||||
725,000 | 5.000%, 06/01/23 AGMC Insured | Aa3/AA-/NR | 765,586 | ||||||
680,000 | 5.000%, 06/01/23 AGMC Insured | Aa3/AA-/NR | 718,066 | ||||||
Richmond, Indiana Hospital Revenue | |||||||||
250,000 | 5.000%, 01/01/19 | NR/A/A | 272,263 | ||||||
Riverton, Utah Hospital Revenue, Intermountain | |||||||||
Health Care Health Services, Inc. | |||||||||
825,000 | 5.000%, 08/15/36 | Aa1/AA+/NR | 868,676 | ||||||
2,000,000 | 5.000%, 08/15/41 | Aa1/AA+/NR | 2,099,240 | ||||||
Utah State Board of Regents Revenue Hospital - | |||||||||
University Utah, Series B | |||||||||
3,000,000 | 5.000%, 08/01/31 | Aa2/AA/NR | 3,209,070 | ||||||
Washington State Health Care Facilities Authority | |||||||||
Revenue, Refunding, Fred Hutchinson Cancer | |||||||||
595,000 | 5.000%, 01/01/18 | A2/A/NR | 660,819 | ||||||
Total Hospital | 12,822,998 | ||||||||
Housing (5.9%) | |||||||||
Alaska Housing Finance Corp. Housing Revenue | |||||||||
575,000 | 5.250%, 12/01/28 AMT | Aa2/AA+/AA+ | 583,067 | ||||||
Alaska Housing Finance Corp. Mortgage Revenue | |||||||||
Refunding, Series B | |||||||||
2,000,000 | 4.500%, 12/01/35 | Aaa/AAA/AAA | 2,014,480 |
9
Rating | |||||||||
Principal | Moody’s, S&P | ||||||||
Amount | Revenue Bonds (continued) | and Fitch | Value | ||||||
Housing (continued) | |||||||||
Florida Housing Finance Corp. | |||||||||
$ | 450,000 | 5.000%, 07/01/21 AMT | Aa1/AA+/AA+ | $ | 465,935 | ||||
390,000 | 6.000%, 07/01/28 | Aa1/AA+/AA+ | 410,943 | ||||||
Indianapolis, Indiana Multi-Family | |||||||||
395,000 | 4.850%, 01/01/21 AMT FNMA Insured | A1/NR/NR | 401,292 | ||||||
Miami-Dade County, Florida Housing Finance | |||||||||
Authority | |||||||||
535,000 | 5.000%, 11/01/23 AGMC Insured AMT | Aa3/AA+/A- | 541,276 | ||||||
North Dakota Housing Authority Home Mortgage | |||||||||
Revenue | |||||||||
340,000 | 5.400%, 07/01/23 AMT | Aa1/NR/NR | 356,351 | ||||||
Puerto Rico Housing Finance Authority | |||||||||
1,100,000 | 5.125%, 12/01/27 | NR/AA-/A+ | 1,171,258 | ||||||
South Dakota Housing Development Authority | |||||||||
45,000 | 6.000%, 05/01/28 | Aa1/AAA/NR | 45,637 | ||||||
Utah Housing Corporation Single Family Mortgage | |||||||||
25,000 | 5.250%, 07/01/23 AMT | Aa2/AA/AA | 25,011 | ||||||
825,000 | 5.125%, 07/01/24 AMT | Aa3/AA-/AA- | 829,372 | ||||||
670,000 | 5.000%, 07/01/25 AMT | Aa3/AA-/AA- | 667,742 | ||||||
345,000 | 5.100%, 01/01/26 AMT | Aa3/AA-/AA- | 346,811 | ||||||
95,000 | 5.650%, 07/01/27 AMT | Aa2/AA/AA | 95,357 | ||||||
1,300,000 | 5.250%, 01/01/28 AMT | Aa3/AA-/AA- | 1,320,059 | ||||||
605,000 | 5.200%, 01/01/28 AMT | Aa3/AA-/AA- | 612,750 | ||||||
1,800,000 | 5.800%, 07/01/28 AMT | Aa3/AA-/AA- | 1,867,698 | ||||||
660,000 | 5.700%, 07/01/28 AMT | Aa3/AA-/AA- | 681,938 | ||||||
465,000 | 5.500%, 07/01/28 AMT | Aa3/AA-/AA- | 476,388 | ||||||
795,000 | 6.100%, 01/01/29 AMT | Aa3/AA-/AA- | 798,816 | ||||||
1,270,000 | 5.250%, 07/01/28 Series A AMT | Aa3/AA-/AA- | 1,304,823 | ||||||
1,000,000 | 4.000%, 07/01/28 Series B-1 Class I | Aaa/AAA/AAA | 982,210 | ||||||
590,000 | 4.950%, 01/01/32 Series A Class II | Aa2/AA/AA | 602,880 | ||||||
985,000 | 4.625%, 07/01/32 Series B-1 Class II | Aa2/AA/AA | 998,465 | ||||||
2,280,000 | 4.500%, 01/01/24 Series A Class III | Aa3/AA-/AA- | 2,341,264 |
10
TAX-FREE FUND FOR UTAH
SCHEDULE OF INVESTMENTS (continued)
DECEMBER 31, 2011 (unaudited)
Rating | |||||||||
Principal | Moody’s, S&P | ||||||||
Amount | Revenue Bonds (continued) | and Fitch | Value | ||||||
Housing (continued) | |||||||||
Utah Housing Corporation Single Family Mortgage | |||||||||
(continued) | |||||||||
$ | 940,000 | 4.500%, 07/01/23 Series C | Aa3/AA-/AA- | $ | 973,849 | ||||
Utah State Housing Finance Agency | |||||||||
50,000 | 5.700%, 07/01/15 AMT | Aa3/AA-/AA- | 50,154 | ||||||
25,000 | 5.400%, 07/01/16 AMT | Aa2/NR/NR | 25,071 | ||||||
385,000 | 5.500%, 07/01/18 AMT | Aa3/AA-/AA- | 392,153 | ||||||
25,000 | 5.000%, 07/01/18 AMT | Aaa/AAA/NR | 25,015 | ||||||
5,000 | 5.400%, 07/01/20 AMT | Aaa/NR/NR | 5,000 | ||||||
140,000 | 5.600%, 07/01/23 AMT | Aa2/AA/AA | 140,097 | ||||||
Wyoming Community Development Authority | |||||||||
Homeownership Mortgage Revenue | |||||||||
1,000,000 | 4.625%, 06/01/28 Series A | Aa2/NR/NR | 1,021,570 | ||||||
Wyoming Community Development Authority | |||||||||
Housing Revenue | |||||||||
500,000 | 4.375%, 12/01/30 Series 2 | Aa1/AA+/NR | 506,825 | ||||||
Total Housing | 23,081,557 | ||||||||
Industrial Development & Pollution Control (0.8%) | |||||||||
Emery County, Utah Pollution Control Revenue | |||||||||
Pacificorp Projects | |||||||||
3,000,000 | 5.650%, 11/01/23 AMBAC Insured | A2/A/NR | 3,009,480 | ||||||
Lease (5.0%) | |||||||||
Clark County, Nevada Improvement District Revenue | |||||||||
665,000 | 5.125%, 12/01/19 | NR/NR/NR* | 607,205 | ||||||
Clark County, Nevada Improvement District Special | |||||||||
Local Improvement #128 (Summerlin) | |||||||||
500,000 | 5.000%, 02/01/21 Series A | NR/NR/NR* | 424,935 | ||||||
Middle Village, Florida Community Development | |||||||||
District Special Assessment Revenue | |||||||||
1,045,000 | 6.750%, 05/01/25 | NR/NR/NR* | 1,044,864 | ||||||
New Albany, Indiana Development Authority | |||||||||
500,000 | 4.250%, 02/01/22 | NR/A-/NR | 519,165 |
11
TAX-FREE FUND FOR UTAH
SCHEDULE OF INVESTMENTS (continued)
DECEMBER 31, 2011 (unaudited)
Rating | |||||||||
Principal | Moody’s, S&P | ||||||||
Amount | Revenue Bonds (continued) | and Fitch | Value | ||||||
Lease (continued) | |||||||||
Port Saint Lucie, Florida Special Assessment Revenue | |||||||||
Southwest Annexation District 1-B | |||||||||
$ | 500,000 | 5.000%, 07/01/27 NPFG Insured | Baa2/BBB/NR | $ | 512,770 | ||||
Red River, Texas Higher Education TCU Project | |||||||||
1,000,000 | 4.375%, 03/15/25 | Aa3/NR/AA- | 1,046,140 | ||||||
Salt Lake Valley, Utah Fire Service District Lease | |||||||||
Revenue | |||||||||
2,645,000 | 5.200%, 04/01/28 | Aa2/NR/AA+ | 2,874,824 | ||||||
1,000,000 | 5.250%, 04/01/30 | Aa2/NR/AA+ | 1,078,660 | ||||||
South Dakota State Building Authority Revenue | |||||||||
500,000 | 4.500%, 06/01/24 NPFG-FGIC Insured | NR/AA/NR | 537,415 | ||||||
Tooele County, Utah Municipal Building Authority | |||||||||
School District Lease Revenue | |||||||||
1,000,000 | 5.000%, 06/01/28 | A1/A+/NR | 1,045,630 | ||||||
Uintah County, Utah Municipal Building Authority | |||||||||
Lease Revenue | |||||||||
2,000,000 | 5.300%, 06/01/28 | NR/A+/NR | 2,153,760 | ||||||
Utah State Building Ownership Authority Lease | |||||||||
Revenue Refunding State Facilities Master Lease | |||||||||
Program | |||||||||
465,000 | 5.000%, 05/15/21 | Aa1/AA+/NR | 520,288 | ||||||
510,000 | 5.000%, 05/15/23 | Aa1/AA+/NR | 560,143 | ||||||
1,000,000 | 5.000%, 05/15/24 | Aa1/AA+/NR | 1,217,970 | ||||||
1,080,000 | 5.000%, 05/15/25 | Aa1/AA+/NR | 1,130,101 | ||||||
1,575,000 | 5.000%, 05/15/26 | Aa1/AA+/NR | 1,772,757 | ||||||
West Bountiful, Utah Courthouse Revenue | |||||||||
410,000 | 5.000%, 05/01/19 | NR/A/A+ | 434,305 | ||||||
West Valley City, Utah Municipal Building Authority | |||||||||
Lease Revenue Refunding | |||||||||
1,890,000 | 4.375%, 08/01/26 Series A NPFG-FGIC Insured | NR/A+/A+ | 1,969,002 | ||||||
Total Lease | 19,449,934 |
12
TAX-FREE FUND FOR UTAH
SCHEDULE OF INVESTMENTS (continued)
DECEMBER 31, 2011 (unaudited)
Rating | |||||||||
Principal | Moody’s, S&P | ||||||||
Amount | Revenue Bonds (continued) | and Fitch | Value | ||||||
Local Public Property (7.6%) | |||||||||
Carmel, Indiana Redevelopment Authority Lease | |||||||||
Rent Revenue | |||||||||
$ | 1,975,000 | 5.000%, 02/01/26 | Aa1/AA+/NR | $ | 2,146,647 | ||||
Herriman, Utah Special Assessment Towne Center | |||||||||
Assessment Area | |||||||||
1,045,000 | 4.875%, 11/01/23 | NR/A/NR | 1,104,575 | ||||||
1,150,000 | 5.000%, 11/01/25 | NR/A/NR | 1,199,209 | ||||||
1,975,000 | 5.000%, 11/01/29 | NR/A/NR | 2,003,973 | ||||||
Orange County, Florida Sales Tax Revenue | |||||||||
1,000,000 | 5.000%, 01/01/27 Series B NPFG-FGIC Insured | Aa3/AA/AA+ | 1,024,170 | ||||||
Orem, Utah Special Assessment | |||||||||
1,845,000 | 7.750%, 11/01/25 | NR/NR/NR* | 1,818,617 | ||||||
Riverton City, Utah Franchise & Sales Tax Revenue | |||||||||
1,585,000 | 5.000%, 06/01/31 AMBAC Insured | NR/AA-/AA | 1,677,104 | ||||||
Sevier County, Utah Municipal Building Authority | |||||||||
Lease Revenue Refunding | |||||||||
915,000 | 5.000%, 11/15/19 NPFG-FGIC Insured | NR/NR/NR* | 938,488 | ||||||
South Ogden City, Utah Sales Tax Revenue | |||||||||
Refunding | |||||||||
1,895,000 | 4.375%, 05/01/29 NPFG-FGIC Insured | Baa2/A+/NR | 1,936,444 | ||||||
Tooele County, Utah Municipal Building Authority | |||||||||
School District Lease Revenue | |||||||||
1,000,000 | 4.875%, 06/01/25 | A1/A+/NR | 1,060,580 | ||||||
Twin Creeks, Utah Special Services District | |||||||||
11,454,702 | 10.000%, 07/15/30 | NR/NR/NR* | 11,490,555 | ||||||
Uintah County, Utah Municipal Building Authority | |||||||||
Lease Revenue | |||||||||
1,005,000 | 5.500%, 06/01/37 | NR/A+/NR | 1,051,240 | ||||||
1,120,000 | 5.500%, 06/01/40 | NR/A+/NR | 1,169,638 | ||||||
Utah Transit Authority Sales Tax Revenue, Series A | |||||||||
1,000,000 | 5.000%, 06/15/28 | Aa2/AAA/AA | 1,108,350 | ||||||
Total Local Public Property | 29,729,590 |
13
TAX-FREE FUND FOR UTAH
SCHEDULE OF INVESTMENTS (continued)
DECEMBER 31, 2011 (unaudited)
Rating | |||||||||
Principal | Moody’s, S&P | ||||||||
Amount | Revenue Bonds (continued) | and Fitch | Value | ||||||
State Agency (1.0%) | |||||||||
Alaska State Sport Fishing Revenue Refunding | |||||||||
$ | 1,000,000 | 5.000%, 04/01/25 | A1/NR/A+ | $ | 1,071,180 | ||||
Utah Infrastructure Agency Telecommunications & | |||||||||
Franchise Tax, Series A | |||||||||
1,000,000 | 5.500%, 10/15/30 Series A AGMC Insured | Aa3/AA-/NR | 1,109,230 | ||||||
1,475,000 | 5.250%, 10/15/33 AGMC Insured | Aa3/AA-/NR | 1,567,630 | ||||||
Total State Agency | 3,748,040 | ||||||||
Tax Revenue (8.6%) | |||||||||
Bountiful City, Utah Sales Tax Refunding Bond | |||||||||
377,000 | 3.500%, 06/01/13 | NR/AA/NR | 389,422 | ||||||
832,000 | 4.000%, 06/01/17 | NR/AA/NR | 922,247 | ||||||
Brigham, Utah Special Assessment Voluntary | |||||||||
Assessment Area | |||||||||
1,140,000 | 5.250%, 08/01/23 | A1/NR/NR | 1,243,159 | ||||||
1,195,000 | 5.500%, 08/01/29 | A1/NR/NR | 1,269,353 | ||||||
Clark County, Nevada Improvement District | |||||||||
250,000 | 5.000%, 08/01/16 | NR/NR/NR* | 226,975 | ||||||
Coral Canyon, Utah Special Service District | |||||||||
50,000 | 5.000%, 07/15/13 | NR/NR/NR* | 50,204 | ||||||
250,000 | 5.500%, 07/15/18 | NR/NR/NR* | 244,643 | ||||||
Florida State Department of Environmental | |||||||||
Protection Revenue | |||||||||
1,250,000 | 5.250%, 07/01/20 NPFG Insured | A1/AA-/A | 1,293,125 | ||||||
Henderson, Nevada Local Improvement District | |||||||||
95,000 | 4.500%, 09/01/12 | NR/NR/NR* | 95,391 | ||||||
290,000 | 5.000%, 09/01/14 | NR/NR/NR* | 293,935 | ||||||
290,000 | 5.000%, 09/01/15 | NR/NR/NR* | 291,905 | ||||||
230,000 | 5.000%, 03/01/16 | NR/NR/NR* | 221,143 | ||||||
Holladay, Utah Redevelopment Agency | |||||||||
2,387,500 | 4.900%, 12/30/20 | NR/NR/NR* | 2,101,549 | ||||||
Jordanelle, Utah Special Service District | |||||||||
186,000 | 5.000%, 11/15/14 | NR/NR/NR* | 182,163 | ||||||
196,000 | 5.100%, 11/15/15 | NR/NR/NR* | 188,423 |
14
TAX-FREE FUND FOR UTAH
SCHEDULE OF INVESTMENTS (continued)
DECEMBER 31, 2011 (unaudited)
Rating | |||||||||
Principal | Moody’s, S&P | ||||||||
Amount | Revenue Bonds (continued) | and Fitch | Value | ||||||
Tax Revenue (continued) | |||||||||
Jordanelle, Utah Special Service District (continued) | |||||||||
$ | 206,000 | 5.200%, 11/15/16 | NR/NR/NR* | $ | 195,877 | ||||
216,000 | 5.300%, 11/15/17 | NR/NR/NR* | 202,714 | ||||||
228,000 | 5.400%, 11/15/18 | NR/NR/NR* | 212,482 | ||||||
240,000 | 5.500%, 11/15/19 | NR/NR/NR* | 220,944 | ||||||
253,000 | 5.600%, 11/15/20 | NR/NR/NR* | 230,501 | ||||||
268,000 | 5.700%, 11/15/21 | NR/NR/NR* | 240,983 | ||||||
283,000 | 5.800%, 11/15/22 | NR/NR/NR* | 252,292 | ||||||
299,000 | 6.000%, 11/15/23 | NR/NR/NR* | 268,033 | ||||||
La Verkin, Utah Sales and Franchise Tax Revenue | |||||||||
571,000 | 5.100%, 07/15/27 | NR/NR/NR* | 498,100 | ||||||
Lehi, Utah Sales Tax | |||||||||
790,000 | 5.000%, 06/01/24 AGMC Insured | Aa3/AA-/NR | 836,571 | ||||||
Mesquite, Nevada New Special Improvement District | |||||||||
175,000 | 4.750%, 08/01/12 | NR/NR/NR* | 172,867 | ||||||
205,000 | 4.900%, 08/01/13 | NR/NR/NR* | 198,391 | ||||||
125,000 | 5.250%, 08/01/17 | NR/NR/NR* | 113,591 | ||||||
285,000 | 5.350%, 08/01/19 | NR/NR/NR* | 245,907 | ||||||
120,000 | 5.400%, 08/01/20 | NR/NR/NR* | 101,963 | ||||||
450,000 | 5.500%, 08/01/25 | NR/NR/NR* | 356,261 | ||||||
North Ogden, Utah Sales Tax Revenue | |||||||||
195,000 | 5.000%, 11/01/24 Syncora Guarantee, Inc. Insured | NR/A+/AA | 208,527 | ||||||
Payson City, Utah Sales Tax Revenue | |||||||||
445,000 | 5.000%, 08/01/21 AGMC Insured | Aa3/AA-/NR | 498,293 | ||||||
Riverton City, Utah Franchise & Sales Tax Revenue | |||||||||
750,000 | 5.000%, 06/01/24 AMBAC Insured | NR/AA-/AA | 814,950 | ||||||
Salt Lake City, Utah Sales Tax | |||||||||
1,060,000 | 5.000%, 02/01/23 | NR/AAA/NR | 1,154,287 | ||||||
1,115,000 | 5.000%, 02/01/24 | �� | NR/AAA/NR | 1,211,046 | |||||
South Weber City, Utah | |||||||||
525,000 | 5.000%, 01/15/24 NPFG Insured | Baa2/A/AA- | 551,428 | ||||||
Springville, Utah Special Assessment Revenue | |||||||||
397,000 | 5.500%, 01/15/17 | NR/NR/NR* | 367,975 |
15
TAX-FREE FUND FOR UTAH
SCHEDULE OF INVESTMENTS (continued)
DECEMBER 31, 2011 (unaudited)
Rating | |||||||||
Principal | Moody’s, S&P | ||||||||
Amount | Revenue Bonds (continued) | and Fitch | Value | ||||||
Tax Revenue (continued) | |||||||||
Springville, Utah Special Assessment Revenue | |||||||||
(continued) | |||||||||
$ | 420,000 | 5.650%, 01/15/18 | NR/NR/NR* | $ | 379,063 | ||||
442,000 | 5.800%, 01/15/19 | NR/NR/NR* | 394,410 | ||||||
380,000 | 5.900%, 01/15/20 | NR/NR/NR* | 336,053 | ||||||
Uintah County, Utah Municipal Building Authority | |||||||||
Lease Revenue | |||||||||
500,000 | 5.000%, 06/01/24 | NR/A+/NR | 541,495 | ||||||
Utah Transit Authority Sales Tax Revenue, Series A | |||||||||
6,560,000 | 5.000%, 06/15/36 AGMC Insured | a2/AAA/AA | 7,064,333 | ||||||
Vernal City, Utah Sales Tax Revenue | |||||||||
515,000 | 4.750%, 09/01/31 AGMC Insured | NR/AA/NR | 552,518 | ||||||
300,000 | 4.875%, 09/01/34 AGMC Insured | NR/AA/NR | 318,978 | ||||||
Wasatch County, Utah Building Authority | |||||||||
130,000 | 5.000%, 10/01/15 | A1/NR/NR | 135,854 | ||||||
135,000 | 5.000%, 10/01/16 | A1/NR/NR | 141,410 | ||||||
Wasatch County, Utah Sales Tax | |||||||||
205,000 | 5.000%, 12/01/16 AMBAC Insured | NR/A+/NR | 210,881 | ||||||
210,000 | 5.000%, 12/01/17 AMBAC Insured | NR/A+/NR | 215,834 | ||||||
225,000 | 5.000%, 12/01/18 AMBAC Insured | NR/A+/NR | 230,942 | ||||||
Washington City, Utah Sales Tax | |||||||||
680,000 | 5.250%, 11/15/17 AMBAC Insured | NR/A/NR | 721,963 | ||||||
Weber County, Utah Sales Tax | |||||||||
385,000 | 5.000%, 07/01/23 AMBAC Insured | A1/NR/NR | 397,778 | ||||||
West Valley City, Utah Redevelopment Agency | |||||||||
1,625,000 | 5.000%, 03/01/21 | NR/A-/NR | 1,728,139 | ||||||
320,000 | 5.000%, 03/01/22 | NR/A-/NR | 339,021 | ||||||
350,000 | 5.000%, 03/01/23 | NR/A-/NR | 368,753 | ||||||
1,000,000 | 5.000%, 03/01/24 | NR/A-/NR | 1,049,280 | ||||||
Total Tax Revenue | 33,294,325 | ||||||||
Transportation (4.1%) | |||||||||
Central Puget Sound, Washington Regional | |||||||||
Transportation Authority Sales Tax | |||||||||
2,000,000 | 5.000%, 11/01/25 Series A AMBAC Insured | Aa2/AAA/NR | 2,195,260 | ||||||
1,050,000 | 4.750%, 02/01/28 NPFG-FGIC Insured | Aa1/AAA/NR | 1,050,945 |
16
TAX-FREE FUND FOR UTAH
SCHEDULE OF INVESTMENTS (continued)
DECEMBER 31, 2011 (unaudited)
Rating | |||||||||
Principal | Moody’s, S&P | ||||||||
Amount | Revenue Bonds (continued) | and Fitch | Value | ||||||
Transportation (continued) | |||||||||
Indiana Finance Authority Highway Revenue | |||||||||
$ | 1,950,000 | 4.500%, 12/01/25 NPFG-FGIC Insured | Aa1/AA+/AA+ | $ | 2,066,006 | ||||
North Texas Turnpike Authority Revenue | |||||||||
2,000,000 | 6.100%, 01/01/28 | A2/A-/NR | 2,265,580 | ||||||
Utah Transit Authority Sales Tax Revenue Refunding, | |||||||||
Series A | |||||||||
5,185,000 | zero coupon, 06/15/23 NPFG Insured | A1/A-/A+ | 3,209,048 | ||||||
Utah Transit Authority Sales Tax Revenue, Series A | |||||||||
2,000,000 | 5.000%, 06/15/27 | Aa2/AAA/AA | 2,229,060 | ||||||
Utah Transit Authority Sales Tax & Transportation | |||||||||
Revenue | |||||||||
1,450,000 | 4.125%, 06/15/22 AGMC Insured | Aa2/AAA/AA | 1,548,658 | ||||||
195,000 | 5.250%, 06/15/32 AGMC Insured | Aa2/AAA/AA | 239,142 | ||||||
Washoe County, Nevada Highway Revenue | |||||||||
1,000,000 | 5.500%, 02/01/28 | A1/A+/NR | 1,105,840 | ||||||
Total Transportation | 15,909,539 | ||||||||
Utility (15.0%) | |||||||||
Central Weber, Utah Sewer Improvement District | |||||||||
Revenue Refunding, Series A | |||||||||
1,000,000 | 5.000%, 03/01/28 AGMC Insured | NR/AA-/AA | 1,106,330 | ||||||
2,000,000 | 4.375%, 03/01/30 AGMC Insured | NR/AA-/AA | 2,091,340 | ||||||
4,000,000 | 5.000%, 03/01/33 AGMC Insured | NR/AA-/AA | 4,298,880 | ||||||
Clark County, Washington Public Utility District | |||||||||
No. 001 Generating Refunding | |||||||||
1,000,000 | 5.000%, 01/01/24 | A2/A/A+ | 1,108,160 | ||||||
Cowlitz County, Washington Public Utility District | |||||||||
Electric Revenue | |||||||||
650,000 | 4.500%, 09/01/26 NPFG Insured | A1/A-/A | 671,184 | ||||||
Davie, Florida Water & Sewer Revenue | |||||||||
1,000,000 | 5.000%, 10/01/32 AGMC Insured | Aa3/AA-/NR | 1,064,170 | ||||||
Eagle Mountain, Utah Gas & Electric | |||||||||
1,385,000 | 4.250%, 06/01/20 Radian Insured | NR/NR/NR* | 1,330,916 | ||||||
1,440,000 | 5.000%, 06/01/21 Radian Insured | NR/NR/NR* | 1,449,331 | ||||||
1,515,000 | 5.000%, 06/01/22 Radian Insured | NR/NR/NR* | 1,519,636 |
17
TAX-FREE FUND FOR UTAH
SCHEDULE OF INVESTMENTS (continued)
DECEMBER 31, 2011 (unaudited)
Rating | |||||||||
Principal | Moody’s, S&P | ||||||||
Amount | Revenue Bonds (continued) | and Fitch | Value | ||||||
Utility (continued) | |||||||||
El Paso, Texas Solid Waste Disposal System Revenue | |||||||||
$ | 1,540,000 | 5.125%, 08/15/28 AGMC Insured | Aa3/AA-/NR | $ | 1,588,833 | ||||
Herriman City, Utah Water Revenue Refunding | |||||||||
1,210,000 | 4.500%, 01/01/33 AMBAC Insured | NR/A/NR | 1,241,351 | ||||||
Houston, Texas Utility System Revenue, Refunding | |||||||||
1,165,000 | 5.125%, 05/15/28 Series A NPFG Insured | Aa2/AA/AA- | 1,240,177 | ||||||
Intermountain Power Agency, Utah Power Supply | |||||||||
Revenue, Refunding | |||||||||
1,000,000 | 4.250%, 07/01/19 Series B | A1/A+/AA- | 1,070,680 | ||||||
1,000,000 | 5.000%, 07/01/21 Series A AGMC Insured | Aa3/AA-/AA- | 1,053,930 | ||||||
250,000 | 5.250%, 07/01/23 | A1/A+/AA- | 263,753 | ||||||
Jacksonville Electric Authority, Florida Electric | |||||||||
System Revenue | |||||||||
500,000 | 5.000%, 10/01/26 | Aa3/A+/AA- | 515,850 | ||||||
King County, Washington Sewer Revenue | |||||||||
660,000 | 5.000%, 01/01/33 AGMC Insured | Aa2/AA+/NR | 703,956 | ||||||
Laredo, Texas Waterworks Sewer System Revenue | |||||||||
Series 2010 | |||||||||
1,450,000 | 5.000%, 03/01/24 | A1/AA-/AA- | 1,650,492 | ||||||
Lower Colorado River Authority, Texas | |||||||||
5,000 | 5.250%, 05/15/29 (pre-refunded) | A1/NR/NR | 6,418 | ||||||
Lower Colorado River Authority, Texas Revenue, | |||||||||
Refunding | |||||||||
1,530,000 | 5.250%, 05/15/29 | A1/A/NR | 1,690,864 | ||||||
Lower Colorado River Authority, Texas Transmission | |||||||||
Contract Revenue, Refunding | |||||||||
1,065,000 | 5.000%, 05/15/33 AMBAC Insured | A2/A/A+ | 1,077,226 | ||||||
Manti City, Utah Electric System Revenue | |||||||||
603,000 | 5.750%, 02/01/17 | NR/NR/NR* | 668,492 | ||||||
Miami-Dade County, Florida Water and Sewer | |||||||||
Revenue System | |||||||||
1,500,000 | 5.000%, 10/01/29 AGMC Insured | Aa2/AA-/AA- | 1,664,490 |
18
TAX-FREE FUND FOR UTAH
SCHEDULE OF INVESTMENTS (continued)
DECEMBER 31, 2011 (unaudited)
Rating | |||||||||
Principal | Moody’s, S&P | ||||||||
Amount | Revenue Bonds (continued) | and Fitch | Value | ||||||
Utility (continued) | |||||||||
Orem, Utah Water & Storm Sewer Revenue | |||||||||
$ | 1,000,000 | 5.000%, 07/15/26 | NR/AA/AA+ | $ | 1,115,880 | ||||
1,250,000 | 5.250%, 07/15/28 | NR/AA/AA+ | 1,408,500 | ||||||
Pleasant Grove City, Utah Storm Water Revenue | |||||||||
860,000 | 4.750%, 07/15/36 AGMC Insured | Aa3/AA-/AA- | 906,844 | ||||||
Port St. Lucie, Florida Utility System Revenue | |||||||||
1,200,000 | 5.250%, 09/01/26 NPFG Insured | Aa3/NR/AA- | 1,261,164 | ||||||
Salt Lake & Sandy, Utah Metropolitan Water District, | |||||||||
Water Revenue, Refunding | |||||||||
650,000 | 5.000%, 07/01/31 Series A | NR/AA+/AA+ | 715,540 | ||||||
Santa Clara, Utah Electric Revenue | |||||||||
1,005,000 | 4.250%, 08/01/26 CIFG Insured | Aa3/NR/NR | 914,037 | ||||||
Sarasota, Florida Utility System Revenue Refunding | |||||||||
1,455,000 | 5.000%, 10/01/27 | NR/AA+/AA | 1,612,184 | ||||||
South Valley, Utah Water Reclamation Facility | |||||||||
Sewer Revenue | |||||||||
2,110,000 | 5.000%, 08/15/24 AMBAC Insured | NR/A/NR | 2,224,467 | ||||||
425,000 | 5.000%, 08/15/30 AMBAC Insured | NR/A/NR | 437,988 | ||||||
South Weber City, Utah Water Revenue | |||||||||
730,000 | 5.000%, 06/01/35 AGMC Insured | NR/AA-/NR | 772,566 | ||||||
930,000 | 5.000%, 06/01/40 AGMC Insured | NR/AA-/NR | 979,504 | ||||||
Southern Utah Valley Power System | |||||||||
210,000 | 5.250%, 09/15/13 NPFG Insured | Baa2/BBB/NR | 215,920 | ||||||
225,000 | 5.250%, 09/15/14 NPFG Insured | Baa2/BBB/NR | 230,771 | ||||||
235,000 | 5.250%, 09/15/15 NPFG Insured | Baa2/BBB/NR | 240,480 | ||||||
185,000 | 5.125%, 09/15/21 NPFG Insured | Baa2/BBB/NR | 188,535 | ||||||
St. George, Utah Electric Revenue | |||||||||
3,750,000 | 5.000%, 06/01/38 AGMC Insured | Aa3/NR/NR | 3,933,975 | ||||||
Tacoma, Washington Solid Waste Utility Revenue | |||||||||
1,000,000 | 5.000%, 12/01/23 Syncora Guarantee, Inc. Insured | A2/AA/AA- | 1,081,090 | ||||||
Tallahassee, Florida Consolidated Utility System | |||||||||
Revenue | |||||||||
1,870,000 | 5.000%, 10/01/32 | Aa1/AA+/AA+ | 1,996,543 |
19
TAX-FREE FUND FOR UTAH
SCHEDULE OF INVESTMENTS (continued)
DECEMBER 31, 2011 (unaudited)
Rating | |||||||||
Principal | Moody’s, S&P | ||||||||
Amount | Revenue Bonds (continued) | and Fitch | Value | ||||||
Utility (continued) | |||||||||
Tallahassee, Florida Energy System Revenue | |||||||||
Refunding | |||||||||
$ | 1,500,000 | 5.000%, 10/01/28 | Aa3/AA/AA- | $ | 1,628,280 | ||||
Utah Assessed Municipal Power System | |||||||||
1,000,000 | 5.000%, 04/01/21 AGMC Insured | Aa3/AA-/NR | 1,025,580 | ||||||
Utah Water Conservancy District | |||||||||
1,400,000 | 5.250%, 01/15/27 | NR/A/NR | 1,512,504 | ||||||
Washington, Utah Electric Revenue | |||||||||
985,000 | 5.000%, 09/01/21 Syncora Guarantee, Inc. Insured | Baa1/NR/NR | 1,040,574 | ||||||
1,000,000 | 5.000%, 09/01/24 Syncora Guarantee, Inc. Insured | Baa1/NR/NR | 1,027,700 | ||||||
White City, Utah Water Improvement District | |||||||||
Revenue | |||||||||
500,000 | 5.000%, 02/01/23 AGMC Insured | Aa3/NR/NR | 549,185 | ||||||
700,000 | 5.000%, 02/01/25 AGMC Insured | Aa3/NR/NR | 756,840 | ||||||
840,000 | 5.000%, 02/01/27 AGMC Insured | Aa3/NR/NR | 898,876 | ||||||
Wyoming Municipal Power Agency Power Supply | |||||||||
System Revenue | |||||||||
720,000 | 5.500%, 01/01/28 Series A | A2/A-/NR | 785,815 | ||||||
Total Utility | 58,537,801 | ||||||||
Water and Sewer (5.9%) | |||||||||
Eagle Mountain, Utah Water and Sewer | |||||||||
690,000 | 4.750%, 11/15/25 NPFG Insured | Baa2/A+/AA- | 729,696 | ||||||
Jordan Valley, Utah Water Conservancy District | |||||||||
Revenue | |||||||||
1,000,000 | 5.000%, 10/01/31 Series B | NR/AA+/AA | 1,110,810 | ||||||
6,000,000 | 5.000%, 10/01/35 Series B | NR/AA+/AA | 6,526,980 | ||||||
Murray City, Utah Sewer and Water | |||||||||
440,000 | 5.000%, 10/01/19 AMBAC Insured | Aa3/NR/NR | 461,199 | ||||||
Ogden City, Utah Sewer & Water Revenue | |||||||||
750,000 | 4.625%, 06/15/38 AGMC Insured | Aa3/NR/NR | 773,370 | ||||||
Pleasant Grove City, Utah Water Revenue | |||||||||
450,000 | 4.300%, 12/01/20 NPFG Insured | Baa2/BBB+/NR | 479,030 | ||||||
760,000 | 4.625%, 12/01/23 AGMC Insured | NR/AA-/NR | 843,501 |
20
TAX-FREE FUND FOR UTAH
SCHEDULE OF INVESTMENTS (continued)
DECEMBER 31, 2011 (unaudited)
Rating | |||||||||||
Principal | Moody’s, S&P | ||||||||||
Amount | Revenue Bonds (continued) | and Fitch | Value | ||||||||
Water and Sewer (continued) | |||||||||||
Pleasant Grove City, Utah Water Revenue (continued) | |||||||||||
$ | 1,000,000 | 5.250%, 12/01/29 AGMC Insured | NR/AA-/NR | $ | 1,105,200 | ||||||
1,370,000 | 5.000%, 12/01/31 Series B NPFG Insured | Baa2/BBB+/NR | 1,418,073 | ||||||||
Rapid City, South Dakota Water Revenue | |||||||||||
500,000 | 5.000%, 11/01/29 | Aa3/NR/NR | 551,990 | ||||||||
1,500,000 | 5.250%, 11/01/39 | Aa3/NR/NR | 1,626,885 | ||||||||
Santa Clara, Utah Storm Drain Revenue | |||||||||||
877,000 | 5.100%, 09/15/26 | NR/NR/NR* | 749,931 | ||||||||
Upper Trinity Regional Water District, Texas | |||||||||||
205,000 | 4.500%, 08/01/20 AMBAC Insured | A3/A-/NR | 214,315 | ||||||||
Utah Water Finance Agency Revenue | |||||||||||
200,000 | 5.250%, 07/01/16 AMBAC Insured | NR/NR/NR* | 202,606 | ||||||||
310,000 | 5.000%, 10/01/17 AMBAC Insured | NR/NR/NR* | 315,465 | ||||||||
510,000 | 5.000%, 07/01/18 AMBAC Insured | A1/NR/NR | 532,792 | ||||||||
105,000 | 5.000%, 10/01/20 AMBAC Insured (pre-refunded) | NR/NR/NR* | 108,655 | ||||||||
830,000 | 4.500%, 10/01/22 AMBAC Insured | Aa3/NR/NR | 879,717 | ||||||||
765,000 | 5.125%, 07/01/23 AMBAC Insured | NR/NR/NR* | 769,116 | ||||||||
870,000 | 4.500%, 10/01/23 AMBAC Insured | Aa3/NR/NR | 916,841 | ||||||||
2,645,000 | 4.500%, 10/01/28 AMBAC Insured | Aa3/NR/NR | 2,777,091 | ||||||||
Total Water and Sewer | 23,093,263 | ||||||||||
Total Revenue Bonds | 314,137,601 | ||||||||||
Total Investments (cost $366,807,727 - note 4) | 96.7% | 375,989,085 | |||||||||
Other assets less liabilities | 3.3 | 12,926,526 | |||||||||
Net Assets | 100.0% | $ | 388,915,611 | ||||||||
* | Any security not rated (NR) by any of the Nationally Recognized Statistical Rating Organizations (“NRSRO” or credit rating agency) has been determined by the Investment Adviser to have sufficient quality to be ranked in the top four credit ratings if a credit rating were to be assigned by a NRSRO. |
21
TAX-FREE FUND FOR UTAH
SCHEDULE OF INVESTMENTS (continued)
DECEMBER 31, 2011 (unaudited)
Percent of | ||||
Portfolio Distribution by Quality Rating | Investments1 | |||
Aaa of Moody’s or AAA of S&P and Fitch | 10.7% | |||
Aa of Moody’s or AA of S&P and Fitch | 49.1 | |||
A of Moody’s or S&P and Fitch | 17.8 | |||
Baa of Moody’s or BBB of S&P | 3.8 | |||
Ba1 of Moody’s or BB+ of S&P | 0.2 | |||
Not rated* | 18.4 | |||
100.0% | ||||
1 Calculated using the highest rating of the three NRSROs. | ||||
PORTFOLIO ABBREVIATIONS: | ||||
AGMC - Assured Guaranty Municipal Corp. | ||||
AMBAC - American Municipal Bond Assurance Corp. | ||||
AMT - Alternative Minimum Tax | ||||
CIFG - CDC IXIS Financial Guaranty | ||||
COP - Certificates of Participation | ||||
ETM - Escrowed to Maturity | ||||
FGIC - Financial Guaranty Insurance Co. | ||||
FNMA - Federal National Mortgage Association | ||||
NPFG - National Public Finance Guarantee | ||||
NR - Not Rated |
See accompanying notes to financial statements.
22
TAX-FREE FUND FOR UTAH
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 2011 JUNE (unaudited)
ASSETS | ||||
Investments at value (cost $366,807,727) | $ | 375,989,085 | ||
Cash | 10,547,323 | |||
Interest receivable | 5,243,373 | |||
Receivable for Fund shares sold | 1,375,001 | |||
Other assets | 30,982 | |||
Total assets | 393,185,764 | |||
LIABILITIES | ||||
Payable for investment securities purchased | 2,096,600 | |||
Dividends payable | 1,256,803 | |||
Payable for Fund shares redeemed | 405,008 | |||
Deferred income | 321,751 | |||
Management fees payable | 143,480 | |||
Distribution and service fees payable | 11,083 | |||
Accrued expenses | 35,428 | |||
Total liabilities | 4,270,153 | |||
NET ASSETS | $ | 388,915,611 | ||
Net Assets consist of: | ||||
Capital Stock - Authorized an unlimited number of shares, par value $0.01 per share | $ | 385,257 | ||
Additional paid-in capital | 380,475,310 | |||
Net unrealized appreciation on investments (note 4) | 9,181,358 | |||
Accumulated net realized loss on investments | (1,272,179 | ) | ||
Undistributed net investment income | 145,865 | |||
$ | 388,915,611 | |||
CLASS A | ||||
Net Assets | $ | 233,345,749 | ||
Capital shares outstanding | 23,125,756 | |||
Net asset value and redemption price per share | $ | 10.09 | ||
Maximum offering price per share (100/96 of $10.09 adjusted to nearest cent) | $ | 10.51 | ||
CLASS C | ||||
Net Assets | $ | 88,353,433 | ||
Capital shares outstanding | 8,759,608 | |||
Net asset value and offering price per share | $ | 10.09 | ||
Redemption price per share (*a charge of 1% is imposed on the redemption | ||||
proceeds of the shares, or on the original price, whichever is lower, if redeemed | ||||
during the first 12 months after purchase) | $ | 10.09 | * | |
CLASS Y | ||||
Net Assets | $ | 67,216,429 | ||
Capital shares outstanding | 6,640,379 | |||
Net asset value, offering and redemption price per share | $ | 10.12 |
See accompanying notes to financial statements.
23
TAX-FREE FUND FOR UTAH
STATEMENT OF OPERATIONS
SIX MONTHS ENDED DECEMBER 31, 2011 (unaudited)
Investment Income: | ||||||||
Interest income | $ | 8,817,930 | ||||||
Other income | 38,949 | |||||||
8,856,879 | ||||||||
Expenses: | ||||||||
Management fee (note 3) | $ | 926,377 | ||||||
Distribution and service fees (note 3) | 646,982 | |||||||
Transfer and shareholder servicing agent fees | 104,351 | |||||||
Trustees’ fees and expenses (note 7) | 77,992 | |||||||
Legal fees | 46,973 | |||||||
Shareholders’ reports and proxy statements | 33,373 | |||||||
Custodian fees (note 6) | 15,530 | |||||||
Registration fees and dues | 13,342 | |||||||
Fund accounting fees | 13,164 | |||||||
Auditing and tax fees | 12,400 | |||||||
Insurance | 7,740 | |||||||
Chief compliance officer (note 3) | 1,853 | |||||||
Miscellaneous | 25,308 | |||||||
Total expenses | 1,925,385 | |||||||
Management fee waived (note 3) | (99,788 | ) | ||||||
Net expenses | 1,825,597 | |||||||
Net investment income | 7,031,282 | |||||||
Realized and Unrealized Gain (Loss) on Investments: | ||||||||
Net realized gain from securities transactions | 584,159 | |||||||
Change in unrealized depreciation on investments | 12,213,131 | |||||||
Net realized and unrealized gain (loss) on investments | 12,797,290 | |||||||
Net change in net assets resulting from operations | $ | 19,828,572 |
See accompanying notes to financial statements.
24
TAX-FREE FUND FOR UTAH
STATEMENTS OF CHANGES IN NET ASSETS
Six Months Ended | ||||||||
December 31, 2011 | Year Ended | |||||||
(unaudited) | June 30, 2011 | |||||||
OPERATIONS: | ||||||||
Net investment income | $ | 7,031,282 | $ | 15,669,819 | ||||
Net realized gain (loss) from securities transactions | 584,159 | 616,769 | ||||||
Change in unrealized appreciation (depreciation) on investments | 12,213,131 | (4,341,103 | ) | |||||
Change in net assets from operations | 19,828,572 | 11,945,485 | ||||||
DISTRIBUTIONS TO SHAREHOLDERS (note 10): | ||||||||
Class A Shares: | ||||||||
Net investment income | (4,403,263 | ) | (10,072,186 | ) | ||||
Class C Shares: | ||||||||
Net investment income | (1,314,407 | ) | (3,272,455 | ) | ||||
Class Y Shares: | ||||||||
Net investment income | (1,267,556 | ) | (2,727,358 | ) | ||||
Change in net assets from distributions | (6,985,226 | ) | (16,071,999 | ) | ||||
CAPITAL SHARE TRANSACTIONS (note 8): | ||||||||
Proceeds from shares sold | 70,183,215 | 90,761,022 | ||||||
Reinvested dividends and distributions | 3,520,058 | 9,574,958 | ||||||
Cost of shares redeemed | (48,798,806 | ) | (124,122,693 | ) | ||||
Change in net assets from capital share transactions | 24,904,467 | (23,786,713 | ) | |||||
Change in net assets | 37,747,813 | (27,913,227 | ) | |||||
NET ASSETS: | ||||||||
Beginning of period | 351,167,798 | 379,081,025 | ||||||
End of period* | $ | 388,915,611 | $ | 351,167,798 | ||||
* Includes undistributed net investment income, respectively, of: | $ | 145,865 | $ | 99,809 |
See accompanying notes to financial statements.
25
TAX-FREE FUND FOR UTAH
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2011 (unaudited)
1. Organization
Tax-Free Fund For Utah (the “Fund”), a non-diversified, open-end investment company, was organized on December 12, 1990 as a Massachusetts business trust and commenced operations on July 24, 1992. The Fund is authorized to issue an unlimited number of shares and, since its inception to May 21, 1996, offered only one class of shares. On that date, the Fund began offering two additional classes of shares, Class C and Class Y Shares. All shares outstanding prior to that date were designated as Class A Shares and are sold at net asset value plus a sales charge of varying size (depending upon a variety of factors) paid at the time of purchase and bear a distribution fee. Class C Shares are sold at net asset value with no sales charge payable at the time of purchase but with a level charge for service and distribution fees for six years thereafter. Class C Shares automatically convert to Class A Shares after six years. Class Y Shares are sold only through institutions acting for investors in a fiduciary, advisory, agency, custodial or similar capacity, and are not offered directly to retail customers. Class Y Shares are sold at net asset value with no sales charge, no redemption fee, no contingent deferred sales charge (“CDSC”) and no distribution fee. On October 31, 1997, the Fund established Class I Shares which are offered and sold only through financial intermediaries and are not offered directly to retail customers. Class I Shares are sold at net asset value with no sales charge and no redemption fee or CDSC, although a financial intermediary may charge a fee for effecting a purchase or other transaction on behalf of its customers. Class I Shares may carry a distribution and a service fee. As of the report date, there were no Class I Shares outstanding. All classes of shares represent interests in the same portfolio of investments and are identical as to rights and privileges but differ with respect to the effect of sales charges, the distribution and/or service fees borne by each class, expenses specific to each class, voting rights on matters affecting a single class and the exchange privileges of each class.
2. Significant Accounting Policies
The following is a summary of significant accounting policies followed by the Fund in the preparation of its financial statements. The policies are in conformity with accounting principles generally accepted in the United States of America for investment companies.
a) | Portfolio valuation: Municipal securities which have remaining maturities of more than 60 days are valued each business day based upon information provided by a nationally prominent independent pricing service and periodically verified through other pricing services. In the case of securities for which market quotations are readily available, securities are valued by the pricing service at the mean of bid and asked quotations. If a market quotation or a valuation from the pricing service is not readily available, the security is valued at fair value determined in good faith under procedures established by and under the general supervision of the Board of Trustees. Securities which mature in 60 days or less are valued at amortized cost if their term to maturity at purchase is 60 days or less, or by amortizing their unrealized appreciation or depreciation on the 61st day prior to maturity, if their term to maturity at purchase exceeds 60 days. |
26
TAX-FREE FUND FOR UTAH
NOTES TO FINANCIAL STATEMENTS (continued)
DECEMBER 31, 2011 (unaudited)
b) | Fair Value Measurements: The Fund follows a fair value hierarchy that distinguishes between market data obtained from independent sources (observable inputs) and the Fund's own market assumptions (unobservable inputs). These inputs are used in determining the value of the Fund's investments and are summarized in the following fair value hierarchy: |
Level 1 - Unadjusted quoted prices in active markets for identical assets or liabilities that the Fund has the ability to access.
Level 2 - Observable inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. These inputs may include quoted prices for the identical instrument on an inactive market, prices for similar instruments, interest rates, prepayment speeds, credit risk, yield curves, default rates and similar data.
Level 3 - Unobservable inputs for the asset or liability, to the extent relevant observable inputs are not available, representing the Fund's own assumptions about the assumptions a market participant would use in valuing the asset or liability, based on the best information available.
The inputs or methodology used for valuing securities are not an indication of the risk associated with investing in those securities
The following is a summary of the valuation inputs, representing 100% of the Fund's investments, used to value the Fund's net assets as of December 31, 2011:
Valuation Inputs | Investments in Securities | ||||
Level 1 – Quoted Prices | $ | — | |||
Level 2 – Other Significant Observable Inputs — | |||||
Municipal Bonds* | 375,989,085 | ||||
Level 3 – Significant Unobservable Inputs | — | ||||
Total | $ | 375,989,085 |
*See schedule of investments for a detailed listing of securities.
c) | Subsequent events: In preparing these financial statements, the Fund has evaluated events and transactions for potential recognition or disclosure through the date these financial statements were issued. |
d) | Securities transactions and related investment income: Securities transactions are recorded on the trade date. Realized gains and losses from securities transactions are reported on the identified cost basis. Interest income is recorded daily on the accrual basis and is adjusted for amortization of premium and accretion of original issue and market discount. In connection with certain bonds, fee income is recognized by the Fund on a daily basis over the life of the bonds. |
27
TAX-FREE FUND FOR UTAH
NOTES TO FINANCIAL STATEMENTS (continued)
DECEMBER 31, 2011 (unaudited)
e) | Federal income taxes: It is the policy of the Fund to continue to qualify as a regulated investment company by complying with the provisions of the Internal Revenue Code applicable to certain investment companies. The Fund intends to make distributions of income and securities profits sufficient to relieve it from all, or substantially all, Federal income and excise taxes. |
Management has reviewed the tax positions for each of the open tax years (2008-2010) or expected to be taken in the Fund’s 2011 tax returns and has concluded that there are no significant uncertain tax positions that would require recognition in the financial statements. | |
f) | Multiple class allocations: All income, expenses (other than class-specific expenses), and realized and unrealized gains or losses are allocated daily to each class of shares based on the relative net assets of each class. Class-specific expenses, which include distribution and service fees and any other items that are specifically attributed to a particular class, are also charged directly to such class on a daily basis. |
g) | Use 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 increases and decreases in net assets from operations during the reporting period. Actual results could differ from those estimates. |
h) | Accounting pronouncements: In May 2011, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2011-04, “Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and International Financial Reporting Standards (“IFRS”). ASU No. 2011-04 clarifies existing requirements for measuring fair value and for disclosure about fair value measurements in converged guidance of the FASB and the International Accounting Standards Board. The amendments are effective during interim and annual periods beginning after December 15, 2011. In December 2011, FASB issued ASU No. 2011-11 related to disclosures about offsetting assets and liabilities. The amendments in this ASU require an entity to disclose information about offsetting and related arrangements to enable users of its financial statements to understand the effect of those arrangements on its financial position. The ASU is effective for annual reporting periods beginning on or after January 1, 2013, and interim periods within those annual periods. The guidance requires retrospective application for all comparative periods presented. Management is currently evaluating the impact these updates and amendments may have on the Fund's financial statements. |
3. Fees and Related Party Transactions
a) Management Arrangements:
Aquila Investment Management LLC (the “Manager”), a wholly-owned subsidiary of Aquila Management Corporation, the Fund’s founder and sponsor, serves as the Manager for the Fund under an
28
TAX-FREE FUND FOR UTAH
NOTES TO FINANCIAL STATEMENTS (continued)
DECEMBER 31, 2011 (unaudited)
Advisory and Administration Agreement with the Fund. Under the Advisory and Administration Agreement, the Manager provides all investment management and administrative services to the Fund. The Manager’s services include providing the office of the Fund and all related services as well as managing relationships with all the various support organizations to the Fund such as the shareholder servicing agent, custodian, legal counsel, fund accounting agent, auditors and distributor. For its services, the Manager is entitled to receive a fee which is payable monthly and computed as of the close of business each day at the annual rate of 0.50 of 1% on the Fund’s net assets.
For the six months ended December 31, 2011, the Fund incurred management fees of $926,377 of which $99,788 was waived. The Manager has contractually undertaken to waive fees and/or reimburse Fund expenses so that total Fund expenses will not exceed 0.83% for Class A Shares, 1.63% for Class C Shares, 0.99% for Class I Shares (none of which are currently outstanding) or 0.63% for Class Y Shares. These expense limitations are in effect until October 31, 2012. Prior to October 31, 2012, the Manager may not terminate the arrangement without the approval of the Board of Trustees.
On January 7, 2011, the Securities and Exchange Commission announced a settlement with two former portfolio managers of the Fund concerning fees paid by the issuers of certain bonds held by the Fund, that among other things required them to pay a total of $589,578 in disgorgement and prejudgment interest to the Fund over a one-year period. This entire amount was paid to the Fund by September 23, 2011. Furthermore, this settlement superceded the prior agreement of the Manager to pay the Fund $520,626 in installments (with interest) over a maximum period of 58 months, under which the Manager had paid $160,000 to the Fund. In addition, it was determined that the $160,000 that had been paid by the Manager to the Fund would be returned to the Manager from the receipt of the settlement proceeds. The entire $160,000 was returned to the Manager by September 30, 2011.
Under a Compliance Agreement with the Manager, the Manager is compensated for Chief Compliance Officer related services provided to enable the Fund to comply with Rule 38a-1 of the Investment Company Act of 1940.
Specific details as to the nature and extent of the services provided by the Manager are more fully defined in the Fund’s Prospectus and Statement of Additional Information.
b) Distribution and Service Fees:
The Fund has adopted a Distribution Plan (the “Plan”) pursuant to Rule 12b-1 (the “Rule”) under the Investment Company Act of 1940. Under one part of the Plan, with respect to Class A Shares, the Fund is authorized to make distribution fee payments to broker-dealers or others (“Qualified Recipients”) selected by Aquila Distributors, Inc. (the “Distributor”) including, but not limited to, any principal underwriter of the Fund, with which the Distributor has entered into written agreements contemplated by the Rule and which have rendered assistance in the distribution and/or retention of the Fund’s shares or servicing of shareholder accounts. The Fund makes payment of this distribution fee at the annual rate of 0.20% of the
29
TAX-FREE FUND FOR UTAH
NOTES TO FINANCIAL STATEMENTS (continued)
DECEMBER 31, 2011 (unaudited)
Fund’s average net assets represented by Class A Shares. For the six months ended December 31, 2011, distribution fees on Class A Shares amounted to $224,455, of which the Distributor retained $7,111.
Under another part of the Plan, the Fund is authorized to make payments with respect to Class C Shares to Qualified Recipients which have rendered assistance in the distribution and/or retention of the Fund’s Class C shares or servicing of shareholder accounts. These payments are made at the annual rate of 0.75% of the Fund’s average net assets represented by Class C Shares and for the six months ended December 31, 2011, amounted to $316,895. In addition, under a Shareholder Services Plan, the Fund is authorized to make service fee payments with respect to Class C Shares to Qualified Recipients for providing personal services and/or maintenance of shareholder accounts. These payments are made at the annual rate of 0.25% of the Fund’s average net assets represented by Class C Shares and for the six months ended December 31, 2011 amounted to $105,632. The total of these payments with respect to Class C Shares amounted to $422,527, of which the Distributor retained $87,683.
Specific details about the Plans are more fully defined in the Fund’s Prospectus and Statement of Additional Information.
Under a Distribution Agreement, the Distributor serves as the exclusive distributor of the Fund’s shares.Through agreements between the Distributor and various brokerage and advisory firms (“intermediaries”), the Fund’s shares are sold primarily through the facilities of these intermediaries having offices within Utah, with the bulk of any sales commissions inuring to such intermediaries. For the six months ended December 31, 2011, total commissions on sales of Class A Shares amounted to $460,092, of which the Distributor received $38,559.
4. Purchases and Sales of Securities
During the six months ended December 31, 2011, purchases of securities and proceeds from the sales of securities aggregated $51,167,169 and $28,634,756, respectively.
At December 31, 2011, the aggregate tax cost for all securities was $366,685,922. At December 31, 2011, the aggregate gross unrealized appreciation for all securities in which there is an excess of value over tax cost amounted to $12,608,251 and aggregate gross unrealized depreciation for all securities in which there is an excess of tax cost over value amounted to $3,305,088, for a net unrealized appreciation of $9,303,163.
5. Portfolio Orientation
At least 50% of the Fund’s assets will always consist of obligations of Utah-based issuers. At December 31, 2011, the Fund had 58% of its net assets invested in municipal obligations of issuers within Utah. The Fund is also permitted to invest in tax-free municipal obligations of non-Utah-based issuers that are exempt from regular Federal income taxes and, pursuant to an administrative determination of the Utah State Tax Commission issued under statutory authority, the interest on which is currently exempt from
30
TAX-FREE FUND FOR UTAH
NOTES TO FINANCIAL STATEMENTS (continued)
DECEMBER 31, 2011 (unaudited)
Utah individual income taxes. Since the Fund invests principally and may invest entirely in double tax-free municipal obligations of issuers within Utah, it is subject to possible risks associated with economic, political, or legal developments or industrial or regional matters specifically affecting Utah and whatever effects these may have upon Utah issuers’ ability to meet their obligations.
6. Expenses
The Fund has negotiated an expense offset arrangement with its custodian wherein it receives credit toward the reduction of custodian fees and other Fund expenses whenever there are uninvested cash balances. The Statement of Operations reflects the total expenses before any offset, the amount of offset and the net expenses.
7. Trustees’ Fees and Expenses
At December 31, 2011 there were 9 Trustees, one of whom is affiliated with the Manager and is not paid any fees. The total amount of Trustees’ service fees (for carrying out their responsibilities) and attendance fees paid during the six months ended December 31, 2011 was $61,056. Attendance fees are paid to those in attendance at regularly scheduled quarterly Board Meetings and meetings of the Independent Trustees held prior to each quarterly Board Meeting, as well as additional meetings (such as Audit, Nominating, Shareholder and special meetings). Trustees are reimbursed for their expenses such as travel, accommodations, and meals incurred in connection with attendance at Board Meetings and the Annual Meeting of Shareholders. For the six months ended December 31, 2011, such meeting-related expenses amounted to $16,936.
31
TAX-FREE FUND FOR UTAH
NOTES TO FINANCIAL STATEMENTS (continued)
DECEMBER 31, 2011 (unaudited)
8. Capital Share Transactions
Transactions in Capital Shares of the Fund were as follows:
Six Months Ended December 31, 2011 | Year Ended | |||||||||||||||
(unaudited) | June 30, 2011 | |||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||
Class A Shares: | ||||||||||||||||
Proceeds from shares sold | 3,579,300 | $ | 35,563,407 | 4,193,949 | $ | 40,949,761 | ||||||||||
Reinvested distributions | 216,353 | 2,147,590 | 611,153 | 5,947,989 | ||||||||||||
Cost of shares redeemed | (2,480,963 | ) | (24,631,310 | ) | (6,624,373 | ) | (63,577,122 | ) | ||||||||
Net change | 1,314,690 | 13,079,687 | (1,819,271 | ) | (16,679,372 | ) | ||||||||||
Class C Shares: | ||||||||||||||||
Proceeds from shares sold | 2,220,305 | 22,060,978 | 2,478,584 | 24,310,498 | ||||||||||||
Reinvested distributions | 75,799 | 751,991 | 218,150 | 2,120,788 | ||||||||||||
Cost of shares redeemed | (2,009,140 | ) | (19,914,639 | ) | (3,292,796 | ) | (31,692,159 | ) | ||||||||
Net change | 286,964 | 2,898,330 | (596,062 | ) | (5,260,873 | ) | ||||||||||
Class Y Shares: | ||||||||||||||||
Proceeds from shares sold | 1,258,723 | 12,558,830 | 2,605,011 | 25,500,763 | ||||||||||||
Reinvested distributions | 62,364 | 620,477 | 154,518 | 1,506,181 | ||||||||||||
Cost of shares redeemed | (426,772 | ) | (4,252,857 | ) | (2,990,607 | ) | (28,853,412 | ) | ||||||||
Net change | 894,315 | 8,926,450 | (231,078 | ) | (1,846,468 | ) | ||||||||||
Total transactions in Fund | ||||||||||||||||
shares | 2,495,969 | $ | 24,904,467 | (2,646,411 | ) | $ | (23,786,713 | ) |
9. Securities Traded on a When-Issued Basis
The Fund may purchase or sell securities on a when-issued basis. When-issued transactions arise when securities are purchased or sold by the Fund with payment and delivery taking place in the future in order to secure what is considered to be an advantageous price and yield to the Fund at the time of entering into the transaction. Beginning on the date the Fund enters into a when-issued transaction, cash or other liquid securities are segregated in an amount equal to or greater than the value of the when-issued transaction. These transactions are subject to market fluctuations and their current value is determined in the same manner as for other securities.
32
TAX-FREE FUND FOR UTAH
NOTES TO FINANCIAL STATEMENTS (continued)
DECEMBER 31, 2011 (unaudited)
10. Income Tax Information and Distributions
The Fund declares dividends daily from net investment income and makes payments monthly. Net realized capital gains, if any, are distributed annually and are taxable. These distributions are paid in additional shares at the net asset value per share, in cash, or in a combination of both, at the shareholder’s option.
The Fund intends to maintain, to the maximum extent possible, the tax-exempt status of interest payments received from portfolio municipal securities in order to allow dividends paid to shareholders from net investment income to be exempt from regular Federal and State of Utah income taxes. Due to differences between financial statement reporting and Federal income tax reporting requirements, distributions made by the Fund may not be the same as the Fund’s net investment income, and/or net realized securities gains. In this regard, the Fund increased undistributed net investment income in the amount of $388,887 and decreased additional paid-in capital in the amount of $388,887 at June 30, 2011. These adjustments had no impact on the Fund’s aggregate net assets at June 30, 2011. Further, a small portion of the dividends may, under some circumstances, be subject to taxes at ordinary income rates. For certain shareholders some dividend income may, under some circumstances, be subject to the alternative minimum tax.
At June 30, 2011, the Fund had a capital loss carryover of $1,856,338 of which $402,073 expires in 2017 and $1,454,265 expires in 2018. Carryovers are available to offset future net realized gains on securities transactions to the extent provided for in the Internal Revenue Code. To the extent that this loss is used to offset future realized capital gains, it is probable that the gains so offset will not be distributed.
The tax character of distributions:
Year Ended June 30, | ||||||||
2011 | 2010 | |||||||
Net tax-exempt income | $ | 15,590,252 | $ | 13,804,462 | ||||
Ordinary income | 481,747 | 539,386 | ||||||
$ | 16,071,999 | $ | 14,343,848 |
As of June 30, 2011, the components of distributable earnings on a tax basis were as follows:
Undistributed tax-exempt income | $ | 168,913 | ||
Accumulated net realized loss | (1,856,338 | ) | ||
Unrealized depreciation | (2,931,964 | ) | ||
Other temporary differences | (168,913 | ) | ||
$ | (4,788,302 | ) |
The difference between book basis and tax basis undistributed income is due to the timing difference in recognizing dividends paid.
33
TAX-FREE FUND FOR UTAH
NOTES TO FINANCIAL STATEMENTS (continued)
DECEMBER 31, 2011 (unaudited)
11. Ongoing Development
Since December 2007, the three major credit rating agencies (Standard & Poor’s, Moody’s and Fitch) downgraded or eliminated ratings of the majority of the municipal bond insurance companies due to loss of capital from investments in subprime mortgages. Only a few insurers are now deemed to be investment grade. Thus, while certain bonds have insurance, some are no longer rated based upon the ratings of their insurers. Furthermore, because the ability of many of the Fund’s insurers to pay claims has been downgraded, the protection of such insurance has been diminished, and there is no assurance that some of them may be relied upon for payment.
34
TAX-FREE FUND FOR UTAH
FINANCIAL HIGHLIGHTS
For a share outstanding throughout each period
Class A | ||||||||||||||||||||||||
Six Months | ||||||||||||||||||||||||
Ended | Year Ended June 30, | |||||||||||||||||||||||
12/31/11 | ||||||||||||||||||||||||
(unaudited) | 2011 | 2010 | 2009 | 2008 | 2007 | |||||||||||||||||||
Net asset value, beginning of period | $ | 9.74 | $ | 9.80 | $ | 9.35 | $ | 9.73 | $ | 9.91 | $ | 9.87 | ||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||
Net investment income | 0.20 | (1) | 0.42 | (1) | 0.43 | (1) | 0.44 | (1) | 0.41 | (1) | 0.40 | (2) | ||||||||||||
Net gain (loss) on securities (both realized | ||||||||||||||||||||||||
and unrealized) | 0.35 | (0.05 | ) | 0.47 | (0.37 | ) | (0.17 | ) | 0.05 | |||||||||||||||
Total from investment operations | 0.55 | 0.37 | 0.90 | 0.07 | 0 24 | 0.45 | ||||||||||||||||||
Less distributions (note 10): | ||||||||||||||||||||||||
Dividends from net investment income | (0.20 | ) | (0.43 | ) | (0.45 | ) | (0.45 | ) | (0.42 | ) | (0.41 | ) | ||||||||||||
Distributions from capital gains | – | – | – | – | – | – | ||||||||||||||||||
Total distributions | (0.20 | ) | (0.43 | ) | (0.45 | ) | (0.45 | ) | (0.42 | ) | (0.41 | ) | ||||||||||||
Net asset value, end of period | $ | 10.09 | $ | 9.74 | $ | 9.80 | $ | 9.35 | $ | 9.73 | $ | 9.91 | ||||||||||||
Total return (not reflecting sales charge) | 5.65 | %(3) | 3.87 | % | 9.74 | % | 0.91 | % | 2.45 | % | 4.60 | % | ||||||||||||
Ratios/supplemental data | ||||||||||||||||||||||||
Net assets, end of period (in millions) | $ | 233 | $ | 212 | $ | 232 | $ | 166 | $ | 158 | $ | 149 | ||||||||||||
Ratio of expenses to average net assets | 0.84 | %(4) | 0.83 | % | 0.80 | % | 0.75 | % | 0.63 | % | 0.68 | % | ||||||||||||
Ratio of net investment income to average | ||||||||||||||||||||||||
net assets | 3.96 | %(4) | 4.31 | % | 4.43 | % | 4.80 | % | 4.09 | % | 3.89 | % | ||||||||||||
Portfolio turnover rate | 8 | %(3) | 25 | % | 9 | % | 25 | % | 19 | % | 17 | % | ||||||||||||
The expense and net investment income ratios without the effect of the contractual expense cap were (note 3): | ||||||||||||||||||||||||
Ratio of expenses to average net assets | 0.89 | %(4) | 0.87 | % | 0.87 | % | 0.87 | % | 0.90 | % | 0.96 | % | ||||||||||||
Ratio of net investment income to average | ||||||||||||||||||||||||
net assets | 3.91 | %(4) | 4.28 | % | 4.37 | % | 4.68 | % | 3.82 | % | 3.61 | % | ||||||||||||
The expense ratios after giving effect to the contractual expense cap and expense offset for uninvested cash balances were (note 3): | ||||||||||||||||||||||||
Ratio of expenses to average net assets | 0.84 | %(4) | 0.83 | % | 0.80 | % | 0.74 | % | 0.61 | % | 0.66 | % |
_____________________
(1) Per share amounts have been calculated using the daily average shares method.
(2) Per share amounts have been calculated using the monthly average shares method.
(3) Not annualized.
(4) Annualized.
See accompanying notes to financial statements.
35
TAX-FREE FUND FOR UTAH
FINANCIAL HIGHLIGHTS (continued)
For a share outstanding throughout each period
Class C | Class Y | |||||||||||||||||||||||||||||||||||||||||||||||
Six Months | Six Months | |||||||||||||||||||||||||||||||||||||||||||||||
Ended | Year Ended June 30, | Ended | Year Ended June 30, | |||||||||||||||||||||||||||||||||||||||||||||
12/31/11 | 12/31/11 | |||||||||||||||||||||||||||||||||||||||||||||||
(unaudited) | 2011 | 2010 | 2009 | 2008 | 2007 | (unaudited) | 2011 | 2010 | 2009 | 2008 | 2007 | |||||||||||||||||||||||||||||||||||||
Net asset value, beginning of period | $ | 9.74 | $ | 9.79 | $ | 9.34 | $ | 9.72 | $ | 9.91 | $ | 9.87 | $ | 9.77 | $ | 9.83 | $ | 9.38 | $ | 9.76 | $ | 9.94 | $ | 9.90 | ||||||||||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||||||||||||||||||||||||||
Net investment income | 0.16 | (1) | 0.34 | (1) | 0.35 | (1) | 0.37 | (1) | 0.33 | (1) | 0.32 | (2) | 0.21 | (1) | 0.44 | (1) | 0.45 | (1) | 0.46 | (1) | 0.43 | (1) | 0.41 | (2) | ||||||||||||||||||||||||
Net gain (loss) on securities (both | ||||||||||||||||||||||||||||||||||||||||||||||||
realized and unrealized) | 0.35 | (0.04 | ) | 0.47 | (0.37 | ) | (0.18 | ) | 0.05 | 0.35 | (0.05 | ) | 0.47 | (0.37 | ) | (0.17 | ) | 0.07 | ||||||||||||||||||||||||||||||
Total from investment operations | 0.51 | 0.30 | 0.82 | – | 0.15 | 0.37 | 0.56 | 0.39 | 0.92 | 0.09 | 0.26 | 0.48 | ||||||||||||||||||||||||||||||||||||
Less distributions (note 10): | ||||||||||||||||||||||||||||||||||||||||||||||||
Dividends from net investment income | (0.16 | ) | (0.35 | ) | (0.37 | ) | (0.38 | ) | (0.34 | ) | (0.33 | ) | (0.21 | ) | (0.45 | ) | (0.47 | ) | (0.47 | ) | (0.44 | ) | (0.44 | ) | ||||||||||||||||||||||||
Distributions from capital gains | – | – | – | – | – | – | – | – | – | – | – | – | ||||||||||||||||||||||||||||||||||||
Total distributions | (0.16 | ) | (0.35 | ) | (0.37 | ) | (0.38 | ) | (0.34 | ) | (0.33 | ) | (0.21 | ) | (0.45 | ) | (0.47 | ) | (0.47 | ) | (0.44 | ) | (0.44 | ) | ||||||||||||||||||||||||
Net asset value, end of period | $ | 10.09 | $ | 9.74 | $ | 9.79 | $ | 9.34 | $ | 9.72 | $ | 9.91 | $ | 10.12 | $ | 9.77 | $ | 9.83 | $ | 9.38 | $ | 9.76 | $ | 9.94 | ||||||||||||||||||||||||
Total return | 5.23 | %(3)(4) | 3.15 | %(3) | 8.87 | %(3) | 0.10 | %(3) | 1.53 | %(3) | 3.77 | %(3) | 5.75 | %(4) | 4.08 | % | 9.94 | % | 1.13 | % | 2.67 | % | 4.80 | % | ||||||||||||||||||||||||
Ratios/supplemental data | ||||||||||||||||||||||||||||||||||||||||||||||||
Net assets, end of period (in millions) | $ | 88 | $ | 83 | $ | 89 | $ | 50 | $ | 32 | $ | 31 | $ | 67 | $ | 56 | $ | 59 | $ | 44 | $ | 49 | $ | 47 | ||||||||||||||||||||||||
Ratio of expenses to average net assets | 1.64 | %(5) | 1.63 | % | 1.60 | % | 1.55 | % | 1.43 | % | 1.48 | % | 0.64 | %(5) | 0.63 | % | 0.60 | % | 0.55 | % | 0.43 | % | 0.48 | % | ||||||||||||||||||||||||
Ratio of net investment income to average net assets | 3.14 | %(5) | 3.51 | %. | 3.60 | % | 3.99 | % | 3.29 | % | 3.10 | % | 4.15 | %(5) | 4.51 | % | 4.64 | % | 5.00 | % | 4.29 | % | 4.09 | % | ||||||||||||||||||||||||
Portfolio turnover rate | 8 | %(4) | 25 | % | 9 | % | 25 | % | 19 | % | 17 | % | 8 | %(4) | 25 | % | 9 | % | 25 | % | 19 | % | 17 | % | ||||||||||||||||||||||||
The expense and net investment income ratios without the effect of the contractual expense cap were (note 3): | ||||||||||||||||||||||||||||||||||||||||||||||||
Ratio of expenses to average net assets | 1.69 | %(5) | 1.67 | % | 1.66 | % | 1.67 | % | 1.70 | % | 1.76 | % | 0.69 | %(5) | 0.67 | % | 0.67 | % | 0.67 | % | 0.70 | % | 0.76 | % | ||||||||||||||||||||||||
Ratio of net investment income to average net assets | 3.09 | %(5) | 3.48 | % | 3.54 | % | 3.88 | % | 3.02 | % | 2.81 | % | 4.10 | %(5) | 4.47 | % | 4.57 | % | 4.88 | % | 4.02 | % | 3.81 | % | ||||||||||||||||||||||||
The expense ratios after giving effect to the contractual expense cap and expense offset for uninvested cash balances were (note 3): | ||||||||||||||||||||||||||||||||||||||||||||||||
Ratio of expenses to average net assets | 1.64 | %(5) | 1.63 | % | 1.60 | % | 1.54 | % | 1.42 | % | 1.46 | % | 0.64 | %(5) | 0.63 | % | 0.60 | % | 0.54 | % | 0.42 | % | 0.46 | % |
(1) Per share amounts have been calculated using the daily average shares method.
(2) Per share amounts have been calculated using the monthly average shares method.
(3) Not reflecting CDSC.
(4) Not annualized.
(5) Annualized.
See accompanying notes to financial statements.
36
Analysis of Expenses (unaudited)
As a shareholder of the Fund, you may incur two types of costs: (1) transaction costs, including front-end sales charges with respect to Class A shares or contingent deferred sales charges (“CDSC”) with respect to Class C shares; and (2) ongoing costs, including management fees; distribution and/or service (12b-1) fees; and other Fund expenses. The table below is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
The table below is based on an investment of $1,000 invested on July 1, 2011 and held for the six months ended December 31, 2011.
Actual Expenses
This table provides information about actual account values and actual expenses. You may use the information provided in this table, together with the amount you invested, to estimate the expenses that you paid over the period. To estimate the expenses you paid on your account, divide your ending account value by $1,000 (for example, an $8,600 ending account value divided by $1,000 = 8.6), then multiply the result by the number under the heading entitled “Expenses Paid During the Period”.
Six months ended December 31, 2011
Actual | ||||
Total Return | Beginning | Ending | Expenses | |
Without | Account | Account | Paid During | |
Sales Charges(1) | Value | Value | the Period(2) | |
Class A | 5.65% | $1,000.00 | $1,056.50 | $4.34 |
Class C | 5.23% | $1,000.00 | $1,052.30 | $8.46 |
Class Y | 5.75% | $1,000.00 | $1,057.50 | $3.31 |
(1) | Assumes reinvestment of all dividends and capital gain distributions, if any, at net asset value and does not reflect the deduction of the applicable sales charges with respect to Class A shares or the applicable contingent deferred sales charges ("CDSC") with respect to Class C shares. Total return is not annualized, as it may not be representative of the total return for the year. |
(2) | Expenses are equal to the annualized expense ratio of 0.84%, 1.64% and 0.64% for the Fund's Class A, C and Y shares, respectively, multiplied by the average account value over the period, multiplied by 184/366 (to reflect the one-half year period). |
37
Analysis of Expenses (unaudited) (continued)
Hypothetical Example for Comparison Purposes
The table below provides information about hypothetical account values and hypothetical expenses based on the actual expense ratio and an assumed rate of return of 5.00% 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 the information provided in this table to compare the ongoing costs of investing in the Fund and other mutual funds. To do so, compare this 5.00% hypothetical example relating to the Fund with the 5.00% hypothetical examples that appear in the shareholder reports of other mutual funds.
Please note that the expenses shown in the table below are meant to highlight your ongoing costs only and do not reflect any transactional costs with respect to Class A shares. The example does not reflect the deduction of contingent deferred sales charges (“CDSC”) with respect to Class C shares. Therefore, the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different mutual funds. In addition, if these transaction costs were included, your costs would have been higher.
Six months ended December 31, 2011
Hypothetical | ||||
Annualized | Beginning | Ending | Expenses | |
Total | Account | Account | Paid During | |
Return | Value | Value | the Period(1) | |
Class A | 5.00% | $1,000.00 | $1,020.91 | $4.27 |
Class C | 5.00% | $1,000.00 | $1,016.89 | $8.31 |
Class Y | 5.00% | $1,000.00 | $1,021.92 | $3.25 |
(1) | Expenses are equal to the annualized expense ratio of 0.84%, 1.64% and 0.64% for the Fund's Class A, C and Y shares, respectively, multiplied by the average account value over the period, multiplied by 184/366 (to reflect the one-half year period). |
38
Shareholder Meeting Results (unaudited)
The Annual Meeting of Shareholders of Tax-Free Fund For Utah (the “Fund”) was held on October 12, 2011. The holders of shares representing 93% of the total net asset value of the shares entitled to vote were present in person or by proxy. At the meeting, the following matters were voted upon and approved by the shareholders (the resulting votes for each matter are presented below).
1. | To elect Trustees. |
Dollar Amount of Votes: | ||||||||||||
Trustee | For | Withheld | ||||||||||
Tucker Hart Adams | $ | 322,849,367 | $ | 5,768,368 | ||||||||
Ernest Calderón | $ | 327,965,712 | $ | 652,023 | ||||||||
Thomas A. Christopher | $ | 328,080,304 | $ | 537,432 | ||||||||
Gary C. Cornia | $ | 324,401,021 | $ | 4,216,715 | ||||||||
Grady Gammage, Jr. | $ | 326,893,524 | $ | 1,724,212 | ||||||||
Diana P. Herrmann | $ | 328,159,821 | $ | 457,915 | ||||||||
Lyle W. Hillyard | $ | 323,229,843 | $ | 5,387,893 | ||||||||
John C. Lucking | $ | 327,359,073 | $ | 1,258,663 | ||||||||
Anne J. Mills | $ | 326,444,782 | $ | 2,172,944 |
2. | To ratify the selection of Tait, Weller & Baker LLP as the Fund’s independent registered publicaccounting firm. |
Dollar Amount of Votes: | ||||||||||||
For | Against | Abstain | ||||||||||
$ | 326,419,841 | $ | 1,884,834 | $ | 313,041 |
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Information Available (unaudited)
Much of the information that the funds in the Aquila Group of Funds produce is automatically sent to you and all other shareholders. Specifically, you are routinely sent your Fund’s entire list of portfolio securities twice a year in the semi-annual and annual reports you receive. Additionally, under Fund policies, the Manager publicly discloses the complete schedule of the Fund’s portfolio holdings, as of each calendar quarter, generally by the 15th day after the end of each calendar quarter. Such information remains accessible until the next schedule is made publicly available.
You may obtain a copy of the Fund’s portfolio holdings schedule for the most recently completed period by visiting the Fund’s website at www.aquilafunds.com. The Fund may also disclose other portfolio holdings as of a specified date (currently the Fund discloses its five largest holdings by value as of the close of the last business day of each calendar month in a posting to its website on approximately the 5th business day following the month end). This information remains on the website until the next such posting. Whenever you wish to see a listing of your Fund’s portfolio other than in your shareholder reports, please check our website at www.aquilafunds.com or call us at 1-800-437-1020.
The Fund additionally files a complete list of its portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. Forms N-Q are available free of charge on the SEC website at www.sec.gov. You may also review or, for a fee, copy the forms at the SEC’s Public Reference Room in Washington, D.C. or by calling 1-800-SEC-0330.
Proxy Voting Record (unaudited)
The Fund does not invest in equity securities. Accordingly, there were no matters relating to a portfolio security considered at any shareholder meeting held during the 12 months ended June 30, 2011 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 www.sec.gov.
Federal Tax Status of Distributions (unaudited)
This information is presented in order to comply with a requirement of the Internal Revenue Code and no action on the part of shareholders is required.
For the fiscal year ended June 30, 2011, $15,590,252 of dividends paid by Tax-Free Fund For Utah, constituting 97% of total dividends paid during the fiscal year ended June 30, 2011, were exempt-interest dividends, and the balance was ordinary dividend income.
Prior to February 15, 2012, shareholders were mailed the appropriate tax form(s) which contained information on the status of distributions paid for the 2011 calendar year.
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Additional Information (unaudited)
Renewal of the Advisory and Administration Agreement
Aquila Investment Management LLC (the “Manager”) serves as the investment adviser to the Fund pursuant to an Advisory and Administration Agreement (the “Advisory Agreement”). In order for the Manager to remain the investment adviser of the Fund, the Trustees of the Fund must determine annually whether to renew the Advisory Agreement for the Fund.
Contract review materials were provided to the Trustees in November 2011. In addition, the Trustees took into account the information related to the Fund provided to the Trustees at each regularly scheduled meeting.
At a meeting held in December, 2011, based on their evaluation of the information provided by the Manager, the Trustees of the Fund, including the independent Trustees voting separately, unanimously approved the renewal of the Advisory Agreement until December 31, 2012. In considering the renewal of the Advisory Agreement, the Trustees considered various factors that they determined were relevant, including the factors described below. The Trustees did not identify any single factor as the controlling factor in determining to approve the renewal of the Advisory Agreement.
The nature, extent, and quality of the services provided by the Manager.
The Trustees considered the nature, extent and quality of the services that had been provided by the Manager to the Fund, taking into account the investment objectives and strategies of the Fund. The Trustees reviewed the terms of the Advisory Agreement. The Trustees also reviewed the Manager’s investment approach for the Fund and its research process. The Trustees considered the personnel of the Manager who provide investment management services to the Fund. The Manager has employed Mr. Todd W. Curtis and Mr. James Thompson as co-portfolio managers for the Fund and has established facilities for credit analysis of the Fund’s portfolio securities. Mr. Thompson, based in Salt Lake City, Utah, has provided local information regarding specific holdings in the Fund’s portfolio, a particular advantage as to holdings with less than the highest ratings from the rating agencies. The portfolio managers have also been available to and have met with the brokerage and financial planner community and with investors and prospective investors to provide them with information generally about the Fund’s portfolio, with which to assess the Fund as an investment vehicle for residents of Utah in light of prevailing interest rates and local economic conditions.
The Trustees considered that the Manager had provided all advisory and administrative services to the Fund that the Trustees deemed necessary or appropriate, including the specific services that the Trustees have determined are required for the Fund, given that it seeks to provide shareholders with as high a level of current income exempt from Utah state and regular Federal income taxes as is consistent with preservation of capital.
The Manager has additionally provided all administrative services to the Fund and provided the Fund with personnel (including Fund officers) and other resources that are necessary for the Fund’s business management and operations. The Trustees considered the nature and extent of the
41
Manager’s supervision of third-party service providers, including the Fund’s shareholder servicing agent and custodian.
Based on these considerations, the Trustees concluded that the nature, extent and quality of services that had been provided by the Manager to the Fund were satisfactory and consistent with the terms of the Advisory Agreement.
The investment performance of the Fund and the Manager.
The Trustees reviewed each aspect of the Fund’s performance and compared its performance with that of its competitors, its peer group (i.e., Morningstar single-state intermediate tax-free municipal bond funds nationwide), and its benchmark index, the Barclays Capital Quality Intermediate Municipal Bond Index. It was noted that the materials provided by the Manager indicated that the Fund had investment performance that was comparable overall to that of its Morningstar peer group and its competitors, compared to which the Fund outperformed in some periods and in others it underperformed, but that the Fund’s performance exceeded the performance of its benchmark index. The Trustees noted that, unlike the Fund’s returns, the performance of the benchmark index did not reflect any fees, expenses or sales charges. The Trustees also noted that the Fund was the only Utah state-specific tax-free municipal bond fund in the State. In addition, the group of competitive funds included funds whose investment objectives and risk profiles differed from that of the Fund. The Trustees considered these results to be consistent with the investment objectives of the Fund.
The Trustees concluded that the performance of the Fund was satisfactory compared to that of the funds with differing investment characteristics when those differences were taken into account. Evaluation of this factor indicated to the Trustees that renewal of the Advisory Agreement would be appropriate.
The costs of the services to be provided and profits to be realized by the Manager and its affiliates from the relationship with the Fund.
The information provided by the Manager in connection with renewal contained advisory fee and expense data for the Fund and its competitors as well as data for its Morningstar peer group, including data for all such front-end sales charge funds of a comparable asset size. The materials also showed the profitability to the Manager and to Aquila Distributors, Inc. (the “Distributor”) of its services to the Fund.
The Board noted that the Manager was currently waiving a portion of its fees and had been since the Fund’s inception. Additionally, it was noted that the Manager had contractually undertaken to waive fees and/or reimburse Fund expenses during the period November 1, 2011 through October 31, 2012 so that total Fund expenses would not exceed 0.83 of 1% for Class A Shares. The Manager had indicated that it intended to continue waiving fees as necessary in order that the Fund would remain competitive.
The Trustees compared the advisory fee and expense data with respect to the Fund to similar data about other funds that they found to be relevant. The Trustees concluded that the advisory fee and
42
expenses of the Fund were similar to and were reasonable as compared to those advisory fees and expenses being paid by the Fund’s Morningstar peer group and that the advisory fee was reasonable in relation to the nature and quality of the services provided by the Manager to the Fund.
The Trustees considered information provided by the Manager regarding the profitability of the Manager with respect to the advisory services provided by the Manager to the Fund, including the methodology used by the Manager in allocating certain of its costs to the management of the Fund. The Trustees also considered information regarding the profitability of the Distributor with respect to distribution services provided to the Fund. The Trustees concluded that profitability to the Manager with respect to the advisory services provided to the Fund did not argue against approval of the fees to be paid under the Advisory Agreement.
The extent to which economies of scale would be realized as the Fund grows.
Data provided to the Trustees showed that the Fund’s asset size had declined during the past year due to the turmoil in the municipal bond market. Additionally, the Trustees noted that the Manager continued to waive a portion of its fees. Evaluation of these factors indicated to the Trustees that the Advisory Agreement should be renewed without addition of breakpoints at this time.
Benefits derived or to be derived by the Manager and its affiliates from the relationship with the Fund.
The Trustees observed that, as is generally true of most fund complexes, the Manager and its affiliates, by providing services to a number of funds including the Fund, were able to spread costs as they would otherwise be unable to do. The Trustees noted that while that produces efficiencies and increased profitability for the Manager and its affiliates, it also makes their services available to the Fund at favorable levels of quality and cost which are more advantageous to the Fund than would otherwise have been possible.
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Founders
Lacy B. Herrmann, Chairman Emeritus
Aquila Management Corporation
Manager
AQUILA INVESTMENT MANAGEMENT LLC
380 Madison Avenue, Suite 2300
New York, New York 10017
Board of Trustees
Gary C. Cornia, Chair
Tucker Hart Adams
Ernest Calderón
Thomas A. Christopher
Grady Gammage, Jr.
Diana P. Herrmann
Lyle W. Hillyard
John C. Lucking
Anne J. Mills
Officers
Diana P. Herrmann, President
Charles E. Childs, III, Executive Vice President and Secretary
Marie E. Aro, Senior Vice President
Paul G. O’Brien, Senior Vice President
Todd W. Curtis, Vice President and Co-Portfolio Manager
James T. Thompson, Vice President and Co-Portfolio Manager
M. Kayleen Willis, Vice President
Robert S. Driessen, Chief Compliance Officer
Joseph P. DiMaggio, Chief Financial Officer and Treasurer
Distributor
AQUILA DISTRIBUTORS, INC.
380 Madison Avenue, Suite 2300
New York, New York 10017
Transfer and Shareholder Servicing Agent
BNY MELLON
4400 Computer Drive
Westborough, Massachusetts 01581
Custodian
JPMORGAN CHASE BANK, N.A.
1111 Polaris Parkway
Columbus, Ohio 43240
Further information is contained in the Prospectus,
which must precede or accompany this report.
ITEM 2. | CODE OF ETHICS. |
Not applicable.
ITEM 3. | AUDIT COMMITTEE FINANCIAL EXPERT. |
Not applicable.
ITEM 4. | PRINCIPAL ACCOUNTANT FEES AND SERVICES. |
Not applicable.
ITEM 5. | AUDIT COMMITTEE OF LISTED REGISTRANTS. |
Not applicable.
ITEM 6. | SCHEDULE OF INVESTMENTS. |
Included in Item 1 above
ITEM 7. | DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END 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. |
The Board of Directors of the Registrant has adopted a Nominating Committee Charter which provides that the Nominating Committee (the 'Committee') may consider and evaluate nominee candidates properly submitted by shareholders if a vacancy among the Independent Trustees of the Registrant occurs and if, based on the Board's then current size, composition and structure, the Committee determines that the vacancy should be filled. The Committee will consider candidates submitted by shareholders on the same basis as it considers and evaluates candidates recommended by other sources. A copy of the qualifications and procedures that must be met or followed by shareholders to properly submit a nominee candidate to the Committee may be obtained by submitting a request in writing to the Secretary of the Registrant.
ITEM 11. | CONTROLS AND PROCEDURES. |
(a) Based on their evaluation of the registrant's disclosure controls and procedures (as defined in Rule 30a-2(c) under the Investment Company Act of 1940) as of a date within 90 days of the filing of this report, the registrant's chief financial and executive officers have concluded that the disclosure controls and procedures of the registrant are appropriately designed to ensure that information required to be disclosed in the registrant's reports that are filed under the Securities Exchange Act of 1934 are accumulated and communicated to registrant's management, including its principal executive officer(s) and principal financial officer(s), to allow timely decisions regarding required disclosure and is recorded, processed, summarized and reported, within the time periods specified in the rules and forms adopted by the Securities and Exchange Commission.
(b) There have been no significant changes in registrant's internal controls or in other factors that could significantly affect registrant's internal controls subsequent to the date of the most recent evaluation, including no significant deficiencies or material weaknesses that required corrective action.
ITEM 12. | EXHIBITS. |
(a)(2) Certifications of principal executive officer and principal financial officer as required by Rule 30a-2(a) under the Investment Company Act of 1940.
(b) Certifications of principal executive officer and principal financial officer as required by Rule 30a-2(b) under the Investment Company Act of 1940.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
TAX-FREE FUND FOR UTAH
By: | /s/ Diana P. Herrmann | |
President and Trustee March 5, 2012 | ||
By: | /s/ Joseph P. DiMaggio | |
Chief Financial Officer and Treasurer March 5, 2012 |
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
By: | /s/ Diana P. Herrmann | |
Diana P. Herrmann President and Trustee March 5, 2012 | ||
By: | /s/ Joseph P. DiMaggio | |
Joseph P. DiMaggio Chief Financial Officer and Treasurer March 5, 2012 |
TAX-FREE FUND FOR UTAH
EXHIBIT INDEX
(a) (2) Certifications of principal executive officer and principal financial officer as required by Rule 30a-2(a) under the Investment Company Act of 1940.
(b) Certification of chief executive officer and chief financial officer as required by Rule 30a-2(b) of the Investment Company Act of 1940.