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 811-4066
Cash Assets Trust
(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: 3/31
Date of reporting period: 9/30/04
FORM N-CSR
ITEM 1. REPORTS TO STOCKHOLDERS.
SEMI-ANNUAL
REPORT
SEPTEMBER 30, 2004
THE PACIFIC CAPITAL FUNDS
OF
CASH ASSETS TRUST
PACIFIC CAPITAL CASH ASSETS TRUST
PACIFIC CAPITAL TAX-FREE
CASH ASSETS TRUST
PACIFIC CAPITAL U.S. GOVERNMENT
SECURITIES CASH ASSETS TRUST
[Logo of The Pacific Capital Funds of Cash Assets Trust: a lion standing
on a twisted rope]
A CASH MANAGEMENT
INVESTMENT
SERVING INVESTORS SINCE 1984
THE PACIFIC CAPITAL FUNDS
OF CASH ASSETS TRUST
---------------------------------------------------
380 MADISON AVENUE, SUITE 2300 o NEW YORK, NY 10017
800-228-7496 o 212-697-6666
[Logo of The Pacific Capital Funds of Cash Assets Trust: a lion standing
on a twisted rope]
SEMI-ANNUAL REPORT
PACIFIC CAPITAL
CASH ASSETS TRUST
SCHEDULE OF INVESTMENTS
SEPTEMBER 30, 2004 (UNAUDITED)
FACE
AMOUNT COMMERCIAL PAPER (19.7%) VALUE
- ------------ ----------------------------------------------------------------- -------------
BANKS (8.3%)
$ 20,000,000 Abbey National North America LLC, 1.74%, 11/19/04 ............... $ 19,952,633
19,000,000 Societe Generale N.A., Inc., 1.69%, 12/10/04 .................... 18,937,564
-------------
38,890,197
-------------
BROKERAGE (3.9%)
18,000,000 Goldman Sachs & Co., 1.09%, 12/20/04 ............................ 17,956,400
-------------
FINANCE (4.3%)
20,000,000 General Electric Capital Corp., 1.80%, 12/14/04 ................. 19,926,000
-------------
INSURANCE (3.2%)
15,000,000 Prudential Funding LLC, 1.53%, 10/21/04 ......................... 14,987,250
-------------
Total Commercial Paper ........................................ 91,759,847
-------------
CORPORATE NOTE (3.2%)
INSURANCE (3.2%)
15,000,000 Peoples Benefit Life Insurance, Variable Rate Note, 1.81%,
10/01/04 (b) .................................................. 15,000,000
-------------
U.S. GOVERNMENT AGENCIES (77.1%)
FEDERAL FARM CREDIT BANK (15.1%)
70,000,000 1.65%, 10/01/04 ................................................. 70,000,000
-------------
FEDERAL HOME LOAN BANK (62.0%)
35,000,000 1.54%, 10/01/04 ................................................. 35,000,000
40,000,000 1.51%, 10/06/04 ................................................. 39,991,610
12,615,000 3.625%, 10/15/04 ................................................ 12,626,508
35,000,000 1.74%, 10/22/04 ................................................. 34,964,475
15,000,000 1.55%, 10/27/04 ................................................. 14,983,154
25,000,000 1.71%, 11/05/04 ................................................. 24,958,438
35,000,000 1.62%, 11/19/04 ................................................. 34,922,587
30,000,000 1.68%, 12/03/04 ................................................. 29,911,800
12,000,000 1.67%, 12/08/04 ................................................. 11,962,260
25,000,000 1.92%, 02/25/05 ................................................. 24,804,408
$ 25,000,000 1.94%, 03/11/05 ................................................. $ 24,783,433
-------------
288,908,673
-------------
Total U.S. Government Agencies ............................... 358,908,673
-------------
SHARES INVESTMENT COMPANY (0.1%)
- ------------ -----------------------------------------------------------------
537,363 One Group Government Money Market Fund,
Institutional Shares .......................................... 537,363
-------------
Total Investments (Amortized Cost $466,205,883) (a) 100.1% 466,205,883
Other assets less liabilities ..................... (0.1) (354,732)
----- -------------
Net assets ........................................ 100.0% $ 465,851,151
===== =============
(a) Cost for Federal tax purposes is identical.
(b) Illiquid security. Considered illiquid because it may not be sold, and may
be redeemed only upon at least ninety days' notice to the issuer. As this
security is a variable rate note, the rate shown represents the rate in effect
at September 30, 2004, and the maturity date reflects the next rate change date.
See accompanying notes to financial statements
PACIFIC CAPITAL
TAX-FREE CASH ASSETS TRUST
SCHEDULE OF INVESTMENTS
SEPTEMBER 30, 2004 (UNAUDITED)
RATING
FACE MOODY'S/
AMOUNT MUNICIPAL BONDS (100.0%) S&P VALUE
- ------------ ------------------------------------------------------ ---------- -------------
COLORADO (4.1%)
$ 6,400,000 Colorado Housing & Financial Authority Revenue
Bonds, Class I, Series A-1, Weekly Reset VRDO*,
SPA: FHLB, 1.70%, 10/01/30 .......................... VMIG1/A-1+ $ 6,400,000
-------------
HAWAII (24.9%)
17,300,000 Department of Budget and Finance of the State of
Hawaii Special Purpose Revenue Bonds
(The Queen's Health System), Series A,
Weekly Reset VRDO*, SPA: Bank of Nova
Scotia, 1.68%, 07/01/26 ............................. VMIG1/A-1 17,300,000
5,000,000 Hawaii State, Airports System Revenue Bonds,
Weekly Reset VRDO*, LOC: Societe
Generale, 1.72%, 07/01/13 ........................... VMIG1/A-1+ 5,000,000
4,000,000 Hawaii State, Housing Finance & Development Corp.
Revenue Bonds, (Affordable Rental Housing
Program), Series A, Weekly Reset VRDO*, LOC:
Banque Nationale Paris, 1.70%, 07/01/27 ............. VMIG1/NR 4,000,000
4,000,000 Hawaii State, Housing Finance & Development Corp.
Revenue Bonds (Rental Housing System), Series 89 A,
Weekly Reset VRDO*, LOC: Banque Nationale
Paris, 1.64%, 07/01/24 .............................. VMIG1/NR 4,000,000
8,500,000 Honolulu City & County, HI Multifamily Housing
Revenue Bonds (Moanalua Hillside Apartments), AMT,
Weekly Reset VRDO*, LOC:
FNMA, 1.74%, 09/15/32 ............................... NR/A-1+ 8,500,000
-------------
38,800,000
-------------
IDAHO (2.5%)
3,950,000 Idaho Health Facilities Authority Revenue Bonds
(St. Lukes Regional Medical Center Project),
Daily Reset VRDO*, LOC: Harris Trust &
Savings Bank, 1.72%, 05/01/22 ....................... VMIG1/NR 3,950,000
-------------
ILLINOIS (10.3%)
$ 3,000,000 Chicago, IL General Obligation Bonds, Series B,
Weekly Reset VRDO*, FGIC Insured,
1.70%, 01/01/37 ..................................... VMIG1/A-1+ $ 3,000,000
6,800,000 Chicago, IL Metropolitan Water Reclamation
District-Greater Chicago General Obligation
Bonds, Series A, Weekly Reset VRDO*, SPA:
Bank of America, 1.67%, 12/01/31 .................... VMIG1/A-1+ 6,800,000
6,300,000 Illinois Development Finance Authority Revenue
Bonds (YMCA of Metro Chicago Project), Daily
Reset VRDO*, LOC: Harris Trust & Savings
Bank, 1.72%, 06/01/29 ............................... NR/A-1+ 6,300,000
-------------
16,100,000
-------------
INDIANA (1.1%)
1,680,000 Indianapolis, IN Economic Development Revenue
Bonds (Jewish Federation Campus), Weekly
Reset VRDO*, LOC: Fifth Third Bank,
1.67%, 04/01/05 ..................................... VMIG1/NR 1,680,000
-------------
MICHIGAN (4.4%)
5,410,000 Eastern Michigan University,
MI University Revenue Bonds,
Daily Reset VRDO*, FGIC Insured,
1.72%, 06/01/27 ..................................... NR/A-1+ 5,410,000
1,400,000 Northern Michigan University Revenue Bonds,
Daily Reset VRDO*, FGIC Insured,
1.72%, 06/01/31 ..................................... VMIG1/A-1+ 1,400,000
-------------
6,810,000
-------------
MINNESOTA (3.1%)
3,875,000 Cohasset, MN Revenue Bonds (Minnesota Power &
Light Co. Project), Series A, Daily Reset VRDO*,
LOC: ABN Amro Bank N.V., 1.72%, 06/01/20 ............ NR/A-1+ 3,875,000
200,000 Cohasset, MN Revenue Bonds (Minnesota Power &
Light Co. Project), Series B, Daily Reset VRDO*,
LOC: ABN Amro Bank N.V., 1.72%, 06/01/13 ............ NR/A-1+ 200,000
$ 800,000 Cohasset, MN Revenue Bonds (Minnesota Power &
Light Co. Project), Series C, Daily Reset VRDO*,
LOC: ABN Amro Bank N.V., 1.72%, 06/01/13 ............ NR/A-1+ $ 800,000
-------------
4,875,000
-------------
MISSOURI (14.9%)
5,935,000 Kansas City, MO Industrial Development Authority
Revenue Bonds, (Ewing Marion Kaufman
Foundation), Daily Reset VRDO*,
1.72%, 04/01/27 ..................................... NR/A-1+ 5,935,000
975,000 Missouri State, Health & Educational Facilities
Authority Revenue Bonds (St. Louis University),
Series A, Daily Reset VRDO*, SPA: Bank of
America N.A., 1.77%, 10/01/09 ....................... VMIG1/A-1+ 975,000
5,355,000 Missouri State, Health & Educational Facilities
Authority Revenue Bonds (St. Louis University),
Series B, Daily Reset VRDO*, SPA: Bank of
America N.A., 1.77%, 10/01/24 ....................... VMIG1/A-1+ 5,355,000
2,800,000 Missouri State, Health & Educational Facilities
Authority Revenue Bonds (Washington University),
Series C, Daily Reset VRDO*, SPA: JP Morgan
Chase Bank, 1.63%, 09/01/30 ......................... VMIG1/A-1+ 2,800,000
1,000,000 Missouri State, Health & Educational Facilities
Authority Revenue Bonds (Washington University),
Series C, Daily Reset VRDO*, SPA: JP Morgan
Chase Bank, 1.63%, 03/01/40 ......................... VMIG1/A-1+ 1,000,000
2,100,000 Missouri State, Health & Educational Facilities
Authority Revenue Bonds (Washington University),
Series D, Daily Reset VRDO*, SPA: JP Morgan
Chase Bank, 1.63%, 09/01/30 ......................... VMIG1/A-1+ 2,100,000
5,000,000 University of Missouri, Curators of the University of
Missouri System Facilities Revenue Bonds, Series A,
Daily Reset VRDO*, 1.72%, 11/01/32 .................. VMIG1/A-1+ 5,000,000
-------------
23,165,000
-------------
MONTANA (3.6%)
$ 5,620,000 Montana State, Health Facilities Authority Revenue
Bonds, Series A, Weekly Reset VRDO*, FGIC
Insured, SPA: Wells Fargo, 1.69%, 12/01/15 .......... VMIG1/A-1+ $ 5,620,000
-------------
NEVADA (4.4%)
6,800,000 Clark County, NV Airport Revenue Bonds, Series C,
Weekly Reset VRDO*, FGIC Insured, SPA:
Landesbank Baden-Wurttm, 1.66%, 07/01/29 ............ VMIG1/A-1+ 6,800,000
-------------
NEW YORK (4.5%)
6,000,000 Long Island, NY Power Authority Revenue Bonds,
Series 1A, Weekly Reset VRDO*, LOC:
Bayerische Landesbank, 1.68%, 05/01/33 .............. VMIG1/A-1+ 6,000,000
1,000,000 New York, NY City Transitional Finance Authority
Revenue Bonds, Series 3, Daily Reset VRDO*,
SPA: Bank of New York, 1.71%, 11/01/22 .............. VMIG1/A-1+ 1,000,000
-------------
7,000,000
-------------
NORTH CAROLINA (5.8%)
5,070,000 Concord, NC Utility Systems Revenue Bonds, Series
B, Weekly Reset VRDO*, FSA Insured, SPA:
Wachovia Bank, 1.66%, 12/01/22 ...................... VMIG1/NR 5,070,000
Durham, NC General Obligation Bonds (Public
Improvement Project), Weekly Reset VRDO*,
SPA: Wachovia Bank of North Carolina,
1,150,000 1.70%, 02/01/09 .................................... VMIG1/A-1 1,150,000
1,270,000 1.32%, 02/01/12 .................................... VMIG1/A-1 1,270,000
1,475,000 1.70%, 02/01/13 .................................... VMIG1/A-1 1,475,000
-------------
8,965,000
-------------
OHIO (2.4%)
3,675,000 Ohio Housing Finance Agency Mortgage Revenue
Bonds (Residential Mortgage), Series E-AMT,
Weekly Reset VRDO*, SPA:FHLB,
1.73%, 09/01/34 ..................................... VMIG1/NR 3,675,000
-------------
TEXAS (4.4%)
6,800,000 Texas State, TX Turnpike Authority Central System
Revenue Bonds, Series B, Weekly Reset VRDO*,
AMBAC Insured, SPA: Bank of Nova Scotia,
1.66%, 08/15/42 ..................................... Aaa/A-1 6,800,000
-------------
UTAH (2.0%)
$ 3,150,000 University of Utah, Auxiliary & Campus Facilities
Revenue Bonds, Series A, Weekly Reset VRDO*,
SPA: Bank of Nova Scotia, 1.70%, 04/01/27 ........... VMIG1/A-1 $ 3,150,000
-------------
VIRGINIA (3.8%)
6,000,000 University of Virginia Revenue Bonds, Series A,
Weekly Reset VRDO*, 1.65%, 06/01/34 ................. VMIG1/A-1+ 6,000,000
-------------
WASHINGTON (3.8%)
6,000,000 Seattle, WA Water System Revenue Bonds, Series A,
Weekly Reset VRDO*, LOC: Bayerische
Landesbank, 1.68%, 03/01/32 ......................... VMIG1/A-1+ 6,000,000
-------------
Total Investments (Amortized Cost
$155,790,000) (a) ................................. 100.0% 155,790,000
Other assets less liabilities ....................... 0.0 34,450
----- -------------
Net assets .......................................... 100.0% $ 155,824,450
===== =============
* Variable rate demand obligation (VRDOs) are payable upon demand within the
same day for securities with daily liquidity or seven days for securities with
weekly liquidity.
(a) Cost for Federal tax purposes is identical.
PORTFOLIO ABBREVIATIONS:
AMT - Alternative Minimum Tax
FGIC - Financial Guaranty Insurance Corporation
FHLB - Federal Home Loan Bank
FNMA - Federal National Mortgage Association
LOC - Letter of Credit
NR - Not Rated
SPA - Standby Bond Purchase Agreement
VRDO - Variable Rate Demand Obligation
See accompanying notes to financial statements
PACIFIC CAPITAL
U.S. GOVERNMENT SECURITIES CASH ASSETS TRUST
SCHEDULE OF INVESTMENTS
SEPTEMBER 30, 2004 (UNAUDITED)
FACE
AMOUNT U.S. GOVERNMENT AGENCIES (98.1%) VALUE
- ------------ ----------------------------------------------------------------- -------------
FEDERAL FARM CREDIT BANK (10.0%)
$ 80,000,000 1.65%, 10/01/04 ................................................. $ 80,000,000
12,000,000 1.02%, 10/12/04 ................................................. 11,996,260
-------------
91,996,260
-------------
FEDERAL HOME LOAN BANK (88.1%)
50,000,000 1.54%, 10/01/04 ................................................. 50,000,000
95,000,000 1.51%, 10/06/04 ................................................. 94,980,075
90,000,000 1.63%, 10/08/04 ................................................. 89,971,475
95,000,000 1.54%, 10/20/04 ................................................. 94,922,786
90,000,000 1.74%, 10/22/04 ................................................. 89,908,650
95,000,000 1.56%, 10/27/04 ................................................. 94,893,310
85,000,000 1.54%, 10/29/04 ................................................. 84,898,189
50,000,000 1.71%, 11/01/04 ................................................. 49,926,375
90,000,000 1.63%, 11/19/04 ................................................. 89,800,938
25,000,000 1.74%, 12/01/04 ................................................. 24,926,292
30,000,000 1.68%, 12/03/04 ................................................. 29,911,800
12,000,000 1.67%, 12/08/04 ................................................. 11,962,260
-------------
806,102,150
-------------
Total U.S. Government Agencies .............................. 898,098,410
-------------
SHARES INVESTMENT COMPANY (2.0%)
- ------------ -----------------------------------------------------------------
18,270,460 One Group Government Money Market Fund,
Institutional Shares .......................................... 18,270,460
-------------
Total Investments
(Amortized Cost $916,368,870) (a) .............. 100.1% 916,368,870
Other assets less liabilities .................... (0.1) (1,025,029)
----- -------------
Net assets ....................................... 100.0% $ 915,343,841
===== =============
(a) Cost for Federal tax purposes is identical.
See accompanying notes to financial statements
THE PACIFIC CAPITAL FUNDS
OF CASH ASSETS TRUST
STATEMENTS OF ASSETS AND LIABILITIES
SEPTEMBER 30, 2004 (UNAUDITED)
CASH TAX-FREE GOVERNMENT
FUND FUND FUND
------------ ------------- -------------
ASSETS:
Investments at value and amortized cost (note 2) ............. $466,205,883 $ 155,790,000 $ 916,368,870
Cash ......................................................... -- 412 --
Interest receivable .......................................... 235,295 226,975 12,831
Other assets ................................................. 31,304 11,867 62,422
------------ ------------- -------------
Total Assets .............................................. 466,472,482 156,029,254 916,444,123
------------ ------------- -------------
LIABILITIES:
Dividends payable ............................................ 436,800 137,461 809,864
Adviser and Administrator fees payable ....................... 98,254 20,036 138,034
Distribution fees payable .................................... 26,030 12,754 101,674
Accrued expenses ............................................. 60,247 34,553 50,710
------------ ------------- -------------
Total Liabilities ......................................... 621,331 204,804 1,100,282
------------ ------------- -------------
NET ASSETS ................................................... $465,851,151 $ 155,824,450 $ 915,343,841
============ ============= =============
NET ASSETS CONSIST OF:
Capital Stock - Authorized an unlimited number of shares,
par value $.01 per share .................................. $ 4,658,379 $ 1,558,223 $ 9,152,754
Additional paid-in capital ................................... 461,179,334 154,353,587 906,122,828
Undistributed (overdistributed) net investment income ........ 13,438 (87,360) 68,263
Accumulated net realized loss on investments ................. -- -- (4)
------------ ------------- -------------
$465,851,151 $ 155,824,450 $ 915,343,841
============ ============= =============
SHARES OF BENEFICIAL INTEREST:
Original Shares Class:
Net Assets ................................................ $343,185,401 $ 104,983,112 $ 355,340,336
============ ============= =============
Shares outstanding ........................................ 343,404,192 104,981,654 355,311,002
============ ============= =============
Net asset value per share ................................. $ 1.00 $ 1.00 $ 1.00
============ ============= =============
Service Shares Class:
Net Assets ................................................ $122,665,750 $ 50,841,338 $ 560,003,505
============ ============= =============
Shares outstanding ........................................ 122,433,749 50,840,615 559,964,442
============ ============= =============
Net asset value per share ................................. $ 1.00 $ 1.00 $ 1.00
============ ============= =============
See accompanying notes to financial statements.
THE PACIFIC CAPITAL FUNDS
OF CASH ASSETS TRUST
STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 2004 (UNAUDITED)
CASH TAX-FREE GOVERNMENT
FUND FUND FUND
----------- ----------- -----------
INVESTMENT INCOME:
Interest income ....................................... $ 2,638,714 $ 925,813 $ 5,195,386
----------- ----------- -----------
EXPENSES:
Investment Advis er fees (note 3) ..................... 744,960 246,637 1,381,382
Administrator fees (note 3) ........................... 310,739 86,955 314,897
Distribution fees (note 3) ............................ 152,054 68,688 621,446
Trustees' fees and expenses ........................... 43,303 24,430 61,138
Insurance ............................................. 22,151 8,421 43,287
Legal fees ............................................ 16,096 11,394 33,769
Fund accounting fees .................................. 14,245 13,760 13,766
Shareholders' reports ................................. 13,619 2,376 8,731
Registration fees and dues ............................ 13,498 2,013 6,368
Auditing and tax fees ................................. 13,239 10,723 14,240
Transfer and shareholder servicing agent fees ......... 5,799 5,449 5,335
Custodian fees ........................................ 3,460 6,279 2,280
Miscellaneous ......................................... 3,228 4,009 18,510
----------- ----------- -----------
Total expenses ........................................ 1,356,391 491,134 2,525,149
Advisory fees contractual reduction (note 3) .......... (491,568) (191,909) (997,133)
Administrative fees contractual reduction (note 3) .... (205,044) (67,660) (227,304)
Expenses paid indirectly (note 5) ..................... -- (912) --
----------- ----------- -----------
Net expenses .......................................... 659,779 230,653 1,300,712
----------- ----------- -----------
Net investment income .................................... 1,978,935 695,160 3,894,674
Net realized gain (loss) from securities transactions .... -- -- (4)
----------- ----------- -----------
Net change in net assets resulting from operations ....... $ 1,978,935 $ 695,160 $ 3,894,670
=========== =========== ===========
See accompanying notes to financial statements.
THE PACIFIC CAPITAL FUNDS
OF CASH ASSETS TRUST
STATEMENTS OF CHANGES IN NET ASSETS
CASH FUND TAX-FREE FUND
----------------------------------- -----------------------------------
Six Months Ended Six Months Ended
September 30, September 30,
2004 Year Ended 2004 Year Ended
(unaudited) March 31, 2004 (unaudited) March 31, 2004
---------------- --------------- ---------------- ---------------
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income ................ $ 1,978,935 $ 3,803,973 $ 695,160 $ 1,201,018
Net realized gain (loss)
from securities transactions ....... -- 1,319 -- 38
--------------- --------------- --------------- ---------------
Change in net assets
resulting from operations .......... 1,978,935 3,805,292 695,160 1,201,056
--------------- --------------- --------------- ---------------
DIVIDENDS TO SHAREHOLDERS
FROM NET INVESTMENT INCOME:
Original Shares .................... (1,520,817) (3,014,705) (511,860) (891,803)
Service Shares ..................... (458,118) (789,268) (183,300) (309,215)
--------------- --------------- --------------- ---------------
Total dividends to shareholders
from net investment income ......... (1,978,935) (3,803,973) (695,160) (1,201,018)
--------------- --------------- --------------- ---------------
CAPITAL SHARE TRANSACTIONS
(at $1.00 per share):
Proceeds from shares sold:
Original Shares ...................... 442,351,639 710,757,056 114,692,751 127,920,769
Service Shares ....................... 204,620,554 356,252,712 37,174,698 63,986,710
--------------- --------------- --------------- ---------------
646,972,193 1,067,009,768 151,867,449 191,907,479
--------------- --------------- --------------- ---------------
Reinvested dividends:
Original Shares ...................... 37,490 61,263 27,200 69,733
Service Shares ....................... 426,238 802,624 166,348 320,397
--------------- --------------- --------------- ---------------
463,728 863,887 193,548 390,130
--------------- --------------- --------------- ---------------
Cost of shares redeemed:
Original Shares ...................... (386,232,990) (784,672,808) (108,520,598) (159,333,530)
Service Shares ....................... (201,563,060) (361,048,456) (36,161,705) (70,987,619)
--------------- --------------- --------------- ---------------
(587,796,050) (1,145,721,264) (144,682,303) (230,321,149)
--------------- --------------- --------------- ---------------
Change in net assets
from capital share transactions ...... 59,639,871 (77,847,609) 7,378,694 (38,023,540)
--------------- --------------- --------------- ---------------
Total change in net assets ........... 59,639,871 (77,846,290) 7,378,694 (38,023,502)
NET ASSETS:
Beginning of period .................. 406,211,280 484,057,570 148,445,756 186,469,258
--------------- --------------- --------------- ---------------
End of period ........................ $ 465,851,151 $ 406,211,280 $ 155,824,450 $ 148,445,756
=============== =============== =============== ===============
GOVERNMENT FUND
-----------------------------------
Six Months Ended
September 30,
2004 Year Ended
(unaudited) March 31, 2004
---------------- ---------------
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income ................ $ 3,894,674 $ 6,140,224
Net realized gain (loss)
from securities transactions ....... (4) 421
--------------- ---------------
Change in net assets
resulting from operations .......... 3,894,670 6,140,645
--------------- ---------------
DIVIDENDS TO SHAREHOLDERS
FROM NET INVESTMENT INCOME:
Original Shares .................... (1,884,918) (2,775,205)
Service Shares ..................... (2,009,756) (3,365,022)
--------------- ---------------
Total dividends to shareholders
from net investment income ......... (3,894,674) (6,140,227)
--------------- ---------------
CAPITAL SHARE TRANSACTIONS
(at $1.00 per share):
Proceeds from shares sold:
Original Shares ...................... 494,258,254 1,035,054,356
Service Shares ....................... 1,126,852,930 1,762,487,853
--------------- ---------------
1,621,111,184 2,797,542,209
--------------- ---------------
Reinvested dividends:
Original Shares ...................... 11,573 46,240
Service Shares ....................... 1,853,189 3,380,896
--------------- ---------------
1,864,762 3,427,136
--------------- ---------------
Cost of shares redeemed:
Original Shares ...................... (402,394,170) (1,041,701,880)
Service Shares ....................... (1,143,780,523) (1,638,518,517)
--------------- ---------------
(1,546,174,693) (2,680,220,397)
--------------- ---------------
Change in net assets
from capital share transactions ...... 76,801,253 120,748,948
--------------- ---------------
Total change in net assets ........... 76,801,249 120,749,366
NET ASSETS:
Beginning of period .................. 838,542,592 717,793,226
--------------- ---------------
End of period ........................ $ 915,343,841 $ 838,542,592
=============== ===============
See accompanying notes to financial statements.
THE PACIFIC CAPITAL FUNDS
OF CASH ASSETS TRUST
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
1. ORGANIZATION
Cash Assets Trust (the "Trust") was organized on May 7, 1984 as a
Massachusetts business trust and is registered under the Investment Company Act
of 1940 (the "1940 Act") as an open-end investment company.
The Trust consists of the following three investment portfolios (referred
to individually as a "Fund" and collectively as the "Funds"): Pacific Capital
Cash Assets Trust ("Cash Fund") (a diversified portfolio which commenced
operations on December 5, 1984), Pacific Capital Tax-Free Cash Assets Trust
("Tax-Free Fund") (a non-diversified portfolio which commenced operations on
April 4, 1989), and Pacific Capital U.S. Government Securities Cash Assets Trust
("Goverment Fund") (a diversified portfolio which commenced operations on April
4, 1989). The Trust is authorized to issue for each Fund an unlimited number of
shares of $0.01 par value in two classes of shares; the Original Shares Class
and the Service Shares Class. The Original Shares Class includes all currently
outstanding shares of each Fund that were issued prior to January 20, 1995, the
date on which the Capital structure was changed to include two classes rather
than one. The two classes of shares are substantially identical, except that
Service Shares bear the fees that are payable under the Trust's Distribution
Plan.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies followed by
the Funds in the preparation of their financial statements. The policies are in
conformity with U.S. generally accepted accounting principles.
a) PORTFOLIO VALUATION: Each Fund's portfolio securities are valued by the
amortized cost method permitted in accordance with Rule 2a-7 under the
1940 Act, which, after considering accrued interest thereon, approximates
market. Under this method, a portfolio security is valued at cost adjusted
for amortization of premiums and accretion of discounts. Amortization of
premiums and accretion of discounts are included in interest income.
b) 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 premiums and accretion of discounts as discussed in the
preceding paragraph.
c) DETERMINATION OF NET ASSET VALUE AND CALCULATION OF EXPENSES: The net
asset value per share for each class of the Funds' shares is determined as
of 4:00 p.m. New York time on each day that the New York Stock Exchange
and the custodian are open by dividing the value of the assets of the Fund
allocable to that class less Fund liabilities allocable to the class and
any liabilities charged directly to the class, exclusive of surplus, by
the total number of shares of the class outstanding.
d) MULTIPLE CLASS ALLOCATIONS: Investment income, realized and unrealized
gains and losses, if any, and expenses other than class specific expenses,
are allocated daily to each class of shares based upon the proportion of
net assets of each class. Class specific expenses are borne by the
affected class. Service fee payments under Rule 12b-1 are borne solely by
and charged to the Service Shares based on net assets of that class.
e) FEDERAL INCOME TAXES: It is the policy of each Fund to qualify as a
regulated investment company by complying with the provisions of the
Internal Revenue Code applicable to certain investment companies. Each
Fund intends to make distributions of income and securities profits
sufficient to relieve it from all, or substantially all, Federal income
and excise taxes.
f) REPURCHASE AGREEMENTS: It is each Fund's policy to monitor closely the
creditworthiness of all firms with which it enters into repurchase
agreements, and to take possession of, or otherwise perfect its security
interest in, securities purchased under agreements to resell. The
securities purchased under agreements to resell are marked to market every
business day in order to compare the value of the collateral to the amount
of the "loan" (repurchase agreements being defined as "loans" in the 1940
Act), including the accrued interest earned thereon. If the value of the
collateral is less than 102% of the loan plus the accrued interest
thereon, additional collateral is required from the borrower.
g) USE OF ESTIMATES: The preparation of financial statements in conformity
with U.S. generally accepted accounting principles 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.
3. FEES AND RELATED PARTY TRANSACTIONS
a) MANAGEMENT ARRANGEMENTS:
The Asset Management Group of Bank of Hawaii (the "Adviser"), serves as
Investment Adviser to the Funds. In this role, under Investment Advisory
Agreements, the Adviser supervises the Funds' investments and provides various
services. Aquila Investment Management LLC the ("Administrator"), a wholly-owned
subsidiary of Aquila Management Corporation, the Trust's founder and sponsor,
serves as the Administrator for the Trust under an Administration Agreement with
the Trust. The Administrator provides all administrative services to the Funds
other than those relating to the investment portfolios. Specific details as to
the nature and extent of the services provided by the Adviser and the
Administrator are more fully defined in the Prospectus and Statement of
Additional Information of the Funds. For their services, the Adviser and the
Administrator each receive a fee which is payable monthly and computed as of the
close of business each day on the net assets of each Fund at the following
annual rates:
Cash Fund - On net assets up to $325 million, the fee is paid to the
Adviser and the Administrator at the annual rate of 0.33% and 0.17%,
respectively, and on net assets above that amount at the annual rate
of 0.43% and 0.07%, respectively.
Tax-Free Fund - On net assets up to $95 million, the fee is paid to
the Adviser and the Administrator at the annual rate of 0.27% and
0.13%, respectively, and on net assets above that amount at the
annual rate of 0.33% and 0.07%, respectively.
Government Fund - On net assets up to $60 million, the fee is paid
to the Adviser and the Administrator at the annual rate of 0.27% and
0.13%, respectively, and on net assets above that amount at the
annual rate of 0.33% and 0.07%, respectively.
The Adviser and the Administrator each agrees that the above fees shall be
reduced, but not below zero, by an amount equal to its proportionate share
(determined on the basis of the respective fees computed as described above) of
the amount, if any, by which the total expenses of a Fund in any fiscal year,
exclusive of taxes, interest and brokerage fees, shall exceed the lesser of (i)
2.5% of the first $30 million of average annual net assets of the Fund plus 2%
of the next $70 million of such assets and 1.5% of its average annual net assets
in excess of $100 million, or (ii) 25% of the Fund's total annual investment
income. The payment of the above fees at the end of any month will be reduced or
postponed so that at no time will there be any accrued but unpaid
liability under this expense limitation. Advisory and administrative fees in a
given fiscal year may be recouped prior to the end of such year if interest
rates were to increase. Contractual reduction of fees, if any, is calculated on
a fiscal year basis.
For the period April 1, 2002 through September 30, 2004, advisory and
administrative fees have been contractually reduced (see ii above) due to the
low interest rate environment. For the six months ended September 30, 2004:
Cash Fund incurred advisory and administration fees of $744,960 and
$310,739; due to the expense limitation, such fees were reduced by
$491,568 and $205,044, respectively.
Tax-Free Fund incurred advisory and administration fees of $246,637
and $86,955; due to the expense limitation, such fees were reduced
by $191,909 and $67,660, respectively.
Government Fund incurred advisory and administration fees of
$1,381,382 and $314,897; due to the expense limitation, such fees
were reduced by $997,133 and $227,304, respectively.
b) DISTRIBUTION AND SERVICE FEES:
Each Fund has adopted a Distribution Plan (the "Plan") pursuant to Rule
12b-1 under the 1940 Act. A part of the Plan authorizes payment of certain
distribution or service fees by the Service Shares Class of the Fund. Such
payments are made to "Designated Payees" - broker-dealers, other financial
institutions and service providers who have entered into appropriate agreements
with the Distributor and which have rendered assistance in the distribution
and/or retention of the Funds' Service Shares or in the servicing of Service
Share accounts. The total payments under this part of a Fund's Plan may not
exceed 0.25% of its average annual assets represented by Service Shares. No such
payments will be made by the Original Share Class. Specific details about each
Plan are more fully defined in the Prospectus and Statement of Additional
Information of the Funds.
Under a Distribution Agreement, Aquila Distributors, Inc. (the
"Distributor") serves as the exclusive distributor of the Funds' shares. No
compensation or fees are paid to the Distributor for such share distribution.
c) OTHER RELATED PARTY TRANSACTIONS:
For the six months ended September 30, 2004, the following amounts were
accrued for legal fees: Cash Fund $16,096; Tax-Free Fund $11,394; Government
Fund $33,769. Of these amounts, $14,767, $10,997 and $32,085, respectively, were
allocable to Hollyer Brady Barrett &Hines LLP, counsel to the Fund, for legal
services in conjunction with the Fund's ongoing operations. The Secretary of the
Fund is a Partner of Hollyer Brady Barrett & Hines LLP.
4. GUARANTEES OF CERTAIN COMMERCIAL PAPER
Various banks and other institutions have issued irrevocable letters of
credit or guarantees for the benefit of the holders of certain commercial paper.
Payment at maturity of principal and interest of certain commercial paper held
by the Funds is supported by such letters of credit or guarantees.
5. EXPENSES
The Funds have negotiated an expense offset arrangement with their
custodian, wherein they receive credit toward the reduction of custodian fees
and other expenses whenever there are uninvested cash balances. The Statements
of Operations reflect the total expenses before any offset, the amount of offset
and the net expenses. It is the general intention of the Funds to invest, to the
extent practicable, some or all of cash balances in income-producing assets
rather than leave cash on deposit.
6. PORTFOLIO ORIENTATION
Since the Tax-Free Fund has a significant portion of its investments in
obligations of issuers within Hawaii, it is subject to possible risks associated
with economic, political, or legal developments or industrial or regional
matters specifically affecting Hawaii and whatever effects these may have upon
Hawaii issuers' ability to meet their obligations.
7. INCOME TAX INFORMATION AND DISTRIBUTIONS
The Funds declare dividends daily from net investment income and make
payments monthly in additional shares at the net asset value per share, in cash,
or a combination of both, at the shareholder's option.
The tax character of distributions paid during 2004 and 2003 were as
follows:
CASH FUND TAX-FREE FUND GOVERNMENT FUND
-------------------------- -------------------------- --------------------------
2004 2003 2004 2003 2004 2003
----------- ----------- ----------- ----------- ----------- -----------
Net tax-exempt income ... $ -- $ -- $ 1,201,018 $ 1,772,705 $ -- $ --
Ordinary income ......... 3,508,396 6,248,680 37,174 12 5,586,258 8,577,138
Capital gain ............ -- -- -- -- -- --
----------- ----------- ----------- ----------- ----------- -----------
Total ................... $ 3,508,396 $ 6,248,680 $ 1,238,192 $ 1,772,717 $ 5,586,258 $ 8,577,138
=========== =========== =========== =========== =========== ===========
As of March 31, 2004, the components of distributable earning on a tax
basis were as follows:
TAX-FREE GOVERNMENT
CASH FUND FUND FUND
---------- ---------- ----------
Undistributed ordinary income ........ $ 296,896 $ -- $ 554,387
Undistributed tax-exempt income ...... -- -- --
---------- ---------- ----------
$ 296,896 $ -- $ 554,387
========== ========== ==========
RECLASSIFICATION OF CAPITAL ACCOUNTS
On the statements of assets and liabilities, as a result of certain
differences in the computation of net investment income and net realized capital
gains under federal income tax rules and regulations versus generally accepted
accounting principles, a reclassification has been made to increase (decrease)
undistributed net investment income (distributions in excess of net investment
income), accumulated net realized gain (loss) on investments and additional
paid-in capital for the Funds as follows:
TAX-FREE GOVERNMENT
CASH FUND FUND FUND
---------- ---------- ----------
Paid-in Capital ....................... $ -- $ (37,136) $ --
Undistributed net investment income ... 1,319 37,174 421
Accumulated net realized gain (loss) .. (1,319) (38) (421)
These reclassifications are primarily due to taxable distributions in
excess of net investment income for the Tax-Free Fund and dividend
redesignations for the Cash Fund and the Government Fund. Net assets are not
affected by these changes.
PACIFIC CAPITAL
CASH ASSETS TRUST
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
ORIGINAL SHARES
----------------------------------------------------------------------
Six Months
Ended Year Ended March 31,
9/30/04 ------------------------------------------------------
(unaudited) 2004 2003 2002 2001 2000
----------- ------ ------ ------ ------ ------
Net asset value, beginning of period ............ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------ ------ ------ ------ ------ ------
Income from investment operations:
Net investment income ........................ .005 0.01 0.01 0.03 0.06 0.05
------ ------ ------ ------ ------ ------
Less distributions:
Dividends from net investment income ......... (.005) (0.01) (0.01) (0.03) (0.06) (0.05)
------ ------ ------ ------ ------ ------
Net asset value, end of period .................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
====== ====== ====== ====== ====== ======
Total return .................................... 0.50%* 0.90% 1.35% 2.52% 5.90% 4.89%
Ratios/supplemental data
Net assets, end of period (in millions) ...... $ 343 $ 287 $ 361 $ 353 $ 364 $ 513
Ratio of expenses to average net assets ...... 0.24%** 0.21% 0.36% 0.58% 0.57% 0.56%
Ratio of net investment income to
average net assets ........................ 1.01%** 0.90% 1.34% 2.51% 5.77% 4.80%
The expense and net investment income ratios without the effect of the Adviser's and Administrator's contractual cap on
fees were (note 3):
Ratio of expenses to average net assets ...... 0.57%** 0.57% 0.58% -- -- --
Ratio of net investment income to
average net assets ........................ 0.68%** 0.54% 1.12% -- -- --
The expense ratios after giving effect to the expense offset for uninvested cash balances were:
Ratio of expenses to average net assets ...... 0.24%** 0.21% 0.36% 0.57% 0.57% 0.56%
SERVICE SHARES
----------------------------------------------------------------------
Six Months
Ended Year Ended March 31,
9/30/04 ------------------------------------------------------
(unaudited) 2004 2003 2002 2001 2000
----------- ------ ------ ------ ------ ------
Net asset value, beginning of period ............ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------ ------ ------ ------ ------ ------
Income from investment operations:
Net investment income ........................ 0.004 0.01 0.01 0.02 0.05 0.05
------ ------ ------ ------ ------ ------
Less distributions:
Dividends from net investment income ......... (0.004) (0.01) (0.01) (0.02) (0.05) (0.05)
------ ------ ------ ------ ------ ------
Net asset value, end of period .................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
====== ====== ====== ====== ====== ======
Total return .................................... 0.38%* 0.65% 1.09% 2.27% 5.63% 4.63%
Ratios/supplemental data
Net assets, end of period (in millions) ...... $ 123 $ 119 $ 123 $ 146 $ 221 $ 174
Ratio of expenses to average net assets ...... 0.49%** 0.46% 0.61% 0.83% 0.82% 0.81%
Ratio of net investment income to
average net assets ........................ 0.75%** 0.65% 1.10% 2.36% 5.49% 4.53%
The expense and net investment income ratios without the effect of the Adviser's and Administrator's contractual cap on
fees were (note 3):
Ratio of expenses to average net assets ...... 0.82%** 0.82% 0.83% -- -- --
Ratio of net investment income to
average net assets ........................ 0.42%** 0.29% 0.88% -- -- --
The expense ratios after giving effect to the expense offset for uninvested cash balances were:
Ratio of expenses to average net assets ...... 0.49%** 0.46% 0.61% 0.82% 0.82% 0.81%
- ----------
* Not annualized.
** Annualized.
See accompanying notes to financial statements
PACIFIC CAPITAL
TAX-FREE CASH ASSETS TRUST
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
ORIGINAL SHARES
----------------------------------------------------------------------
Six Months
Ended Year Ended March 31,
9/30/04 ------------------------------------------------------
(unaudited) 2004 2003 2002 2001 2000
----------- ------ ------ ------ ------ ------
Net asset value, beginning of period ............ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------ ------ ------ ------ ------ ------
Income from investment operations:
Net investment income ........................ 0.005 0.01 0.01 0.02 0.04 0.03
------ ------ ------ ------ ------ ------
Less distributions:
Dividends from net investment income ......... (0.005) (0.01) (0.01) (0.02) (0.04) (0.03)
------ ------ ------ ------ ------ ------
Net asset value, end of period .................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
====== ====== ====== ====== ====== ======
Total return .................................... 0.46%* 0.84% 1.15% 2.00% 3.58% 2.95%
Ratios/supplemental data
Net assets, end of period (in millions) ...... $ 105 $ 99 $ 130 $ 100 $ 101 $ 100
Ratio of expenses to average net assets ...... 0.20%** 0.17% 0.28% 0.51% 0.53% 0.52%
Ratio of net investment income to
average net assets ........................ 0.91%** 0.84% 1.13% 1.94% 3.50% 2.93%
The expense and net investment income ratios without the effect of the Adviser's and Administrator's contractual cap on
fees were (note 3):
Ratio of expenses to average net assets ...... 0.51%** 0.52% 0.50% -- -- --
Ratio of net investment income to
average net assets ........................ 0.60%** 0.50% 0.90% -- -- --
The expense ratios after giving effect to the expense offset for uninvested cash balances were:
Ratio of expenses to average net assets ......... 0.19%** 0.17% 0.27% 0.51% 0.53% 0.52%
SERVICE SHARES
----------------------------------------------------------------------
Six Months
Ended Year Ended March 31,
9/30/04 ------------------------------------------------------
(unaudited) 2004 2003 2002 2001 2000
----------- ------ ------ ------ ------ ------
Net asset value, beginning of period ............ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------ ------ ------ ------ ------ ------
Income from investment operations:
Net investment income ........................ 0.003 0.01 0.01 0.02 0.03 0.03
------ ------ ------ ------ ------ ------
Less distributions:
Dividends from net investment income ......... (0.003) (0.01) (0.01) (0.02) (0.03) (0.03)
------ ------ ------ ------ ------ ------
Net asset value, end of period .................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
====== ====== ====== ====== ====== ======
Total return .................................... 0.34%* 0.59% 0.90% 1.75% 3.32% 2.70%
Ratios/supplemental data
Net assets, end of period (in millions) ...... $ 51 $ 50 $ 56 $ 52 $ 54 $ 51
Ratio of expenses to average net assets ...... 0.45%** 0.42% 0.53% 0.77% 0.78% 0.77%
Ratio of net investment income to
average net assets ........................ 0.67%** 0.59% 0.89% 1.77% 3.26% 2.66%
The expense and net investment income ratios without the effect of the Adviser's and Administrator's contractual cap on
fees were (note 3):
Ratio of expenses to average net assets ...... 0.76%** 0.77% 0.76% -- -- --
Ratio of net investment income to
average net assets ........................ 0.35%** 0.25% 0.66% -- -- --
The expense ratios after giving effect to the expense offset for uninvested cash balances were:
Ratio of expenses to average net assets ......... 0.44%** 0.42% 0.52% 0.77% 0.78% 0.77%
- ----------
* Not annualized.
** Annualized.
See accompanying notes to financial statements.
PACIFIC CAPITAL
U.S. GOVERNMENT SECURITIES CASH ASSETS TRUST
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
ORIGINAL SHARES
----------------------------------------------------------------------
Six Months
Ended Year Ended March 31,
9/30/04 ------------------------------------------------------
(unaudited) 2004 2003 2002 2001 2000
----------- ------ ------ ------ ------ ------
Net asset value, beginning of period ............ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------ ------ ------ ------ ------ ------
Income from investment operations:
Net investment income ........................ 0.005 0.01 0.01 0.03 0.06 0.05
------ ------ ------ ------ ------ ------
Less distributions:
Dividends from net investment income ......... (0.005) (0.01) (0.01) (0.03) (0.06) (0.05)
------ ------ ------ ------ ------ ------
Net asset value, end of period .................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
====== ====== ====== ====== ====== ======
Total return .................................... 0.53%* 0.96% 1.34% 2.73% 5.88% 4.83%
Ratios/supplemental data
Net assets, end of period (in millions) ...... $ 355 $ 263 $ 270 $ 306 $ 151 $ 166
Ratio of expenses to average net assets ...... 0.16%** 0.11% 0.25% 0.45% 0.47% 0.49%
Ratio of net investment income to
average net assets ........................ 1.07%** 0.96% 1.34% 2.47% 5.73% 4.73%
The expense and net investment income ratios without the effect of the Adviser's and Administrator's contractual cap on
fees were (note 3):
Ratio of expenses to average net assets ...... 0.45%** 0.46% 0.46% -- -- --
Ratio of net investment income to
average net assets ........................ 0.79%** 0.62% 1.12% -- -- --
The expense ratios after giving effect to the expense offset for uninvested cash balances were:
Ratio of expenses to average net assets ...... 0.16%** 0.11% 0.24% 0.45% 0.47% 0.49%
SERVICE SHARES
----------------------------------------------------------------------
Six Months
Ended Year Ended March 31,
9/30/04 ------------------------------------------------------
(unaudited) 2004 2003 2002 2001 2000
----------- ------ ------ ------ ------ ------
Net asset value, beginning of period ............ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------ ------ ------ ------ ------ ------
Income from investment operations:
Net investment income ........................ 0.004 0.01 0.01 0.02 0.05 0.04
------ ------ ------ ------ ------ ------
Less distributions:
Dividends from net investment income ......... (0.004) (0.01) (0.01) (0.02) (0.05) (0.04)
------ ------ ------ ------ ------ ------
Net asset value, end of period .................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
====== ====== ====== ====== ====== ======
Total return .................................... 0.40%* 0.71% 1.09% 2.48% 5.62% 4.56%
Ratios/supplemental data
Net assets, end of period (in millions) ...... $ 560 $ 575 $ 448 $ 457 $ 332 $ 293
Ratio of expenses to average net assets ...... 0.41%** 0.36% 0.49% 0.70% 0.72% 0.74%
Ratio of net investment income to
average net assets ........................ 0.81%** 0.71% 1.08% 2.39% 5.47% 4.50%
The expense and net investment income ratios without the effect of the Adviser's and Administrator's contractual cap on
fees were (note 3):
Ratio of expenses to average net assets ...... 0.70%** 0.71% 0.71% -- -- --
Ratio of net investment income to
average net assets ........................ 0.52%** 0.36% 0.86% -- -- --
The expense ratios after giving effect to the expense offset for uninvested cash balances were:
Ratio of expenses to average net assets ...... 0.41%** 0.36% 0.49% 0.70% 0.72% 0.74%
- ----------
* Not annualized.
** Annualized.
See accompanying notes to financial statements.
- --------------------------------------------------------------------------------
ANALYSIS OF EXPENSES (UNAUDITED)
As a shareholder of the Trust, you may incur ongoing costs, including
management fees; distribution (12b-1) fees; and other Trust expenses. The tables
below are intended to help you understand your ongoing costs (in dollars) of
investing in the Trust and to compare these costs with the ongoing costs of
investing in other mutual funds.
The tables below are based on an investment of $1,000 invested on April 1,
2004 and held for the six months ended September 30, 2004.
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".
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 2004
BEGINNING ENDING EXPENSES
ACTUAL ACCOUNT ACCOUNT PAID DURING
TOTAL RETURN(1) VALUE VALUE THE PERIOD(2)
- --------------------------------------------------------------------------------
CASH FUND
Original Shares 0.50% $1,000 $1,005.00 $1.21
Service Shares 0.38% $1,000 $1,003.80 $2.46
- --------------------------------------------------------------------------------
TAX-FREE FUND
Original Shares 0.46% $1,000 $1,004.60 $0.95
Service Shares 0.34% $1,000 $1,003.40 $2.21
- --------------------------------------------------------------------------------
GOVERNMENT FUND
Original Shares 0.53% $1,000 $1,005.30 $0.80
Service Chares 0.40% $1,000 $1,004.00 $2.06
- --------------------------------------------------------------------------------
(1) ASSUMES REINVESTMENT OF ALL DIVIDENDS. 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 0.24% AND 0.49%,
RESPECTIVELY, FOR CASH FUND ORIGINAL SHARES AND SERVICE SHARES, 0.19% AND
0.44%, RESPECTIVELY, FOR TAX-FREE FUND ORIGINAL SHARES AND SERVICE SHARES,
AND 0.16% AND 0.41%, RESPECTIVELY, FOR GOVERNMENT FUND ORIGINAL SHARES AND
SERVICE SHARES, RESPECTIVELY, MULTIPLIED BY THE AVERAGE ACCOUNT VALUE OVER
THE PERIOD, MULTIPLIED BY 183/365 (TO REFLECT THE ONE-HALF YEAR PERIOD).
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
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 Trust'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 Trust and other mutual funds. To do so, compare this 5.00%
hypothetical example relating to the Trust with the 5.00% hypothetical examples
that appear in the shareholder reports of other mutual funds.
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 2004
HYPOTHETICAL
ANNUALIZED BEGINNING ENDING EXPENSES
TOTAL ACCOUNT ACCOUNT PAID DURING
RETURN VALUE VALUE THE PERIOD
- --------------------------------------------------------------------------------
CASH FUND
Original Shares 5.00% $1,000 $1,023.87 $1.22
Service Shares 5.00% $1,000 $1,022.61 $2.48
- --------------------------------------------------------------------------------
TAX-FREE FUND
Original Shares 5.00% $1,000 $1,024.12 $0.96
Service Shares 5.00% $1,000 $1,022.86 $2.23
- --------------------------------------------------------------------------------
GOVERNMENT FUND
Original Shares 5.00% $1,000 $1,024.27 $0.81
Service Chares 5.00% $1,000 $1,023.01 $2.08
- --------------------------------------------------------------------------------
(1) EXPENSES ARE EQUAL TO THE ANNUALIZED EXPENSE RATIO OF 0.24% AND 0.49%,
RESPECTIVELY, FOR CASH FUND ORIGINAL SHARES AND SERVICE SHARES, 0.19% AND
0.44%, RESPECTIVELY, FOR TAX-FREE FUND ORIGINAL SHARES AND SERVICE SHARES,
AND 0.16% AND 0.41%, RESPECTIVELY, FOR GOVERNMENT FUND ORIGINAL SHARES AND
SERVICE SHARES, RESPECTIVELY, MULTIPLIED BY THE AVERAGE ACCOUNT VALUE OVER
THE PERIOD, MULTIPLIED BY 183/365 (TO REFLECT THE ONE-HALF YEAR PERIOD).
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PROXY VOTING RECORD. The Trust 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, 2004 with
respect to which the Trust was entitled to vote. Applicable regulations require
us to inform you that the foregoing proxy voting information is available on the
SEC website at http://www.sec.gov.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
INFORMATION AVAILABLE (UNAUDITED)
Much of the information that the funds in the Aquilasm Group of Funds
produce is automatically sent to you and all other shareholders. Specifically,
you are routinely sent the entire list of portfolio securities of your fund
twice a year in the semi-annual and annual reports you receive. You should know,
however, that we prepare, and have available, portfolio listings at the end of
each month.
Whenever you may be interested in seeing a listing of your trust's
portfolio other than in your shareholder reports, please check our website
(www.aquilafunds.com) or call us at 1-800-228-7496.
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INVESTMENT ADVISER
Asset Management Group of Bank of Hawaii
P.O. Box 3170 o Honolulu, Hawaii 96802
ADMINISTRATOR
Aquila Investment Management LLC
380 Madison Avenue, Suite 2300 o New York, New York 10017
BOARD OF TRUSTEES
Theodore T. Mason, Chairman
Thomas W. Courtney
Richard W. Gushman, II
Diana P. Herrmann
Stanley W. Hong
Russell K. Okata
Douglas Philpotts
Oswald K. Stender
CHAIRMAN EMERITUS AND FOUNDER
Lacy B. Herrmann
OFFICERS
Diana P. Herrmann, Vice Chair and President
Charles E. Childs, III, Executive Vice President
Sherri Foster, Vice President
Joseph P. DiMaggio, Chief Financial Officer and Treasurer
Edward M.W. Hines, Secretary
DISTRIBUTOR
Aquila Distributors, Inc.
380 Madison Avenue, Suite 2300 o New York, New York 10017
TRANSFER AND SHAREHOLDER SERVICING AGENT
PFPC Inc.
760 Moore Road o King of Prussia, Pennsylvania 19406
CUSTODIAN
Bank One Trust Company, N.A.
1111 Polaris Parkway o Columbus, Ohio 43240
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
KPMG LLP
757 Third Avenue o New York, New York 10017
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. [RESERVED]
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR
CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 8. [RESERVED]
ITEM 9. 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 fling 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 tat information required to be disclosed in the
registrant's reports that are filed under the Securities Exchange
Act of 1934 are accumulated and communicated t 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 10. 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.
CASH ASSETS TRUST
By: /s/ Diana P. Herrmann
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Vice Chair, Trustee and President
December 6, 2004
By: /s/ Joseph P. DiMaggio
- -----------------------------------
Chief Financial Officer and Treasurer
December 6, 2004
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
Vice Chair, Trustee and President
December 6, 2004
By: /s/ Joseph P. DiMaggio
- -----------------------------------
Joseph P. DiMaggio
Chief Financial Officer and Treasurer
December 6, 2004
CASH ASSETS TRUST
EXHIBIT INDEX
(a)(1) Aquila Group of Funds Code of Ethics for Principal Executive
and Senior Financial Officers under Section 406 of the Sarbanes-Oxley
Act of 2002.
(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.