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: 3/31/05
FORM N-CSR
ITEM 1. REPORTS TO STOCKHOLDERS.
ANNUAL
REPORT
March 31, 2005
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
[Logo of The Pacific Capital Funds of Cash Assets Trust: a lion standing on a
twisted rope]
THE PACIFIC CAPITAL FUNDS
OF
CASH ASSETS TRUST
May, 2005
Dear Investor:
It gives us considerable pleasure to provide you with the Annual Report
for The Pacific Capital Funds of Cash Assets Trust for the fiscal year ended
March 31, 2005.
The enclosed Annual Report includes the three series of Cash Assets Trust
(the "Trust"): Pacific Capital Cash Assets Trust, Pacific Capital Tax-Free Cash
Assets Trust and Pacific Capital U.S. Government Securities Cash Assets Trust
and its two classes of shares: Original Shares and Service Shares. The Trust was
specifically created to meet the short-term investment needs of Hawaii Investors
and others.
---------------------------
Unlike the downturn in short-term rates that was inaugurated by the
Federal Reserve and experienced by your Trust during the previous fiscal year,
this year's report reflects the upward trend in rates indicated by the Federal
Reserve in terms of direction of Federal Funds rate. As we pointed out to you in
our last fiscal year-end letter, the Federal Reserve aggressively pursued the
course of lowering short-term rates to the lowest level in four decades. At
March 31, 2004, short-term rates were at the level of 1.00%. This low level
reflected the concern of the Federal Reserve in terms of a possible slow down of
a major nature in the U.S. economy.
Fortunately, this slow down did not occur. And, indeed, the consensus is
that the economy did well. Consequently, the Federal Reserve reversed its policy
and started to increase short-term rates on a measured basis during this past
fiscal year ended March 31, 2005. Concerns now appear to be focused upon
avoiding inflationary bias to our economy. Accordingly, the Federal Reserve has
stepped up its activity in raising short-term rates again to a more normal level
through a series of gradual increases in rates. As at March 31, 2005, short-term
rates had recovered to the level of 2.75%.
Looking forward, our current thinking is that rates will continue to move
to a higher level. The economy appears to be moving ahead at a level of
approximately 3% for Gross Domestic Product - the measure of all goods and
services produced in the U.S.
We are optimistic that the Pacific Capital Funds of Cash Assets Trust will
provide investors with much more attractive yields during the fiscal year ahead.
In managing the portfolios of the Trust, we will continue to be alert to market
opportunities in terms of seeking to produce a higher return competitive with
other short-term alternatives.
NOT A PART OF THE ANNUAL REPORT
You can be assured that in our desire to strive to achieve higher returns
for investors, the Asset Management Group of the Bank of Hawaii will continually
seek to manage investments in a cautious, but aggressive, manner. We believe
that there is absolutely no substitute for strict adherence to high quality of
securities which possess minimum credit risk. Safety of your cash reserves
remains of utmost concern to us. You can rest assured that the Investment
Adviser will continue to examine, with great diligence, the marketability and
creditworthiness of all securities in each of the Trust's portfolios.
We appreciate your continued use of the Pacific Capital Funds of Cash
Assets Trust. Every effort will be expended by all associated with the Trust to
merit your constant confidence.
Sincerely,
/s/ Diana P. Herrmann /s/ Lacy B. Herrmann
- ---------------------- --------------------
Diana P. Herrmann Lacy B. Herrmann
President Chairman Emeritus of the Board of Trustees
- --------------------------------------------------------------------------------
[Logo of KPMG: four solid rectangles with the letters KPMG in front]
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Trustees and Shareholders of
The Pacific Capital Funds of Cash Assets Trust:
We have audited the accompanying statements of assets and liabilities of
The Pacific Capital Funds of Cash Assets Trust (the "Trust") (comprised of
Pacific Capital Cash Assets Trust, Pacific Capital Tax-Free Cash Assets Trust,
and Pacific Capital U.S. Government Securities Cash Assets Trust) (the "Funds"),
including the schedules of investments, as of March 31, 2005, and the related
statements of operations for the year then ended, the statements of changes in
net assets for each of the two years in the period then ended, and the financial
highlights for each of the five years in the period then ended. These financial
statements and financial highlights are the responsibility of the Trust's
management. Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audits.
We conducted our audits in accordance with the standards of the Public
Company Accounting Oversight Board (United States). Those standards require that
we plan and perform the audit to obtain reasonable assurance about whether the
financial statements and financial highlights are free of material misstatement.
An audit includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements and financial highlights. Our
procedures included confirmation of securities owned as of March 31, 2005, by
correspondence with the custodian. An audit also includes assessing the
accounting principles used, and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of
each of the Funds comprising the Trust as of March 31, 2005, the results of
their operations for the year then ended, the changes in their net assets for
each of the two years in the period then ended, and the financial highlights for
each of the five years in the period then ended, in conformity with U.S.
generally accepted accounting principles.
KPMG LLTP
New York, New York
May 23, 2005
- --------------------------------------------------------------------------------
PACIFIC CAPITAL
CASH ASSETS TRUST
SCHEDULE OF INVESTMENTS
MARCH 31, 2005
FACE
AMOUNT COMMERCIAL PAPER (30.7%) VALUE
- ------------- -------------------------------------------------------------------- --------------
AUTOMOTIVE (3.8%)
$ 20,000,000 Toyota Motor Credit Corp., 2.66%, 4/25/05 .......................... $ 19,964,533
--------------
BANKS (3.7%)
20,000,000 Societe Generale N.A., Inc., 2.74%, 6/01/05 ........................ 19,907,144
--------------
BROKERAGE (11.2%)
20,000,000 ABN- Amro North America 2.86%, 5/23/05 ............................. 19,917,378
20,000,000 Bear Steans & Co. 2.92%, 6/02/05 ................................... 19,899,422
20,000,000 Morgan Stanley Dean Witter, 2.78%, 4/19/05 ......................... 19,972,200
--------------
59,789,000
--------------
CONGLOMERATE (4.5%)
24,000,000 General Electric Capital Corp., 2.76%, 6/13/05 ..................... 23,865,680
--------------
FINANCE (7.5%)
20,000,000 Abbey National North America Corp.2.88%, 7/18/05 ................... 19,827,200
20,000,000 AIG Funding, 2.58%, 4/04/05 ........................................ 19,995,700
--------------
39,822,900
--------------
Total Commercial Paper ............................................. 163,349,257
--------------
CERTIFICATES OF DEPOSIT (7.5%)
BANK (7.5%)
20,000,000 Bank of America 3.01%, 7/13/05 ..................................... 20,000,000
20,000,000 Wells Fargo 2.65%, 4/29/05 ......................................... 20,000,000
--------------
40,000,000
--------------
CORPORATE NOTE (2.8%)
INSURANCE (2.8%)
15,000,000 Peoples Benefit Life Insurance, Variable Rate Note, 2.84%,
4/01/05, (b) .................................................... 15,000,000
--------------
U.S. GOVERNMENT AGENCIES (50.5%)
FEDERAL HOME LOAN BANK (22.3%)
49,460,000 2.44%, 4/06/05 ..................................................... 49,443,239
12,000,000 2.07%, 4/13/05 ..................................................... 11,991,720
28,000,000 3.07%, 8/24/05 ..................................................... 27,654,336
30,000,000 3.14%, 9/16/05 ..................................................... 29,560,400
--------------
........................................................... 118,649,695
--------------
FEDERAL HOME LOAN MORTGAGE CORP. (3.8%)
20,000,000 2.63%, 5/10/05 ..................................................... 19,943,125
--------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION (24.4%)
$ 40,000,000 2.58%, 4/11/05 ..................................................... $ 39,971,333
20,000,000 2.62%, 5/04/05 ..................................................... 19,951,967
20,000,000 2.64%, 5/11/05 ..................................................... 19,941,445
50,000,000 2.84%, 5/25/05 ..................................................... 49,787,000
--------------
129,651,745
--------------
Total U.S. Government Agencies .................................. 268,244,565
--------------
REPURCHASE AGREEMENT (8.5%)
45,000,000 Bank of America 2.77%, 4/01/05 ..................................... 45,000,000
--------------
(Proceeds of $45,003,463 to be received at maturity, Collateral:
$46,330,000 FNMA Discount Note, due 7/20/05; Collateral
Fair Value $45,913,030)
SHARES INVESTMENT COMPANY (0.2%)
1,096,926 JP Morgan U.S. Government Money Market Fund,
Capital Shares .................................................. 1,096,926
--------------
Total Investments (Amortized Cost $532,690,748) (a) ... 100.2% 532,690,748
Other assets less liabilities ......................... (0.2) (970,074)
----- --------------
NET ASSETS ............................................ 100.0% $ 531,720,674
===== ==============
(a) Cost for Federal income tax and financial reporting 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 March 31, 2005, and the maturity date reflects the next rate
change date. Represents 2.8% of net assets.
PORTFOLIO DISTRIBUTION (UNAUDITED)
Commercial Paper....................................... 30.7%
Certificates of Deposit................................ 7.5
Corporate Note......................................... 2.8
U.S. Government Agencies............................... 50.4
Investment Company..................................... 0.2
Repurchase Agreement................................... 8.4
-----
100.0%
=====
See accompanying notes to financial statements.
PACIFIC CAPITAL
TAX-FREE CASH ASSETS TRUST
SCHEDULE OF INVESTMENTS
MARCH 31, 2005
RATING
FACE MOODY'S/
AMOUNT MUNICIPAL BONDS (99.9%) S&P VALUE
- --------------- ------------------------------------------------------- ---------- --------------
COLORADO (3.7%)
Colorado Housing & Financial Authority Revenue
Bonds, Class I, Series A-1, Weekly Reset VRDO*,
SPA: FHLB
$ 7,600,000 2.27%, 10/01/30........................................ VMIG1/A-1+ $ 7,600,000
--------------
HAWAII (22.3%)
City and County of Honolulu, Hawaii (Mandatory
Put 12/01/05)
5,000,000 2.28%, 12/01/20........................................ VMIG1/A-1+ 5,000,000
City and County of Honolulu, Hawaii Prerefunded
11/01/05 @ 101
1,010,000 5.00%, 11/01/12........................................ Aaa/AAA 1,033,487
City and County of Honolulu, Hawaii Commercial
Paper, LOC Hessen-Thuringen Girozentrale
4,000,000 1.87%, 06/09/05........................................ P1/A-1+ 4,000,000
City and County of Honolulu, Hawaii Commercial
Paper, LOC Hessen-Thuringen Girozentrale
10,000,000 2.00%, 06/02/05........................................ P1/A-1+ 10,000,000
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
22,575,000 2.28%, 07/01/26........................................ VMIG1/A-1 22,575,000
Department of Budget and Finance of the State
Special Purpose Revenue Bonds (The Queen's
Health System) Series A, Weekly VRDO*, SPA:
Bank of Nova Scotia
1,900,000 2.19%, 07/01/29........................................ VMIG1/A-1+ 1,900,000
HAWAII (CONTINUED)
State of Hawaii Hawaii State Reveune Refunding
Series DC
$ 1,500,000 3.00%, 09/01/05........................................ Aa3/AA- $ 1,506,243
--------------
46,014,730
--------------
IDAHO (3.9%)
Idaho Health Facilities Authority Revenue Bonds
(St. Lukes Regional Medical Center Project), Daily
Reset VRDO*, LOC: Harris Trust & Savings Bank
7,950,000 2.29%, 05/01/22........................................ VMIG1/NR 7,950,000
--------------
ILLINOIS (9.8%)
Chicago, IL General Obligation Bonds, Series B,
Weekly Reset VRDO*, FGIC Insured
3,000,000 2.29%, 01/01/37........................................ VMIG1/A-1+ 3,000,000
Chicago, IL Metropolitan Water Reclamation District-
Greater Chicago General Obligation Bonds, Series A,
Weekly Reset VRDO*, SPA: Bank of America
9,500,000 2.29%, 12/01/31........................................ VMIG1/A-1+ 9,500,000
Illinois Development Finance Authority Revenue
Bonds (YMCA of Metro Chicago Project), Daily
Reset VRDO*, LOC: Harris Trust & Savings Bank
7,600,000 2.30%, 06/01/29........................................ NR/A-1+ 7,600,000
--------------
20,100,000
--------------
INDIANA (0.8%)
Indianapolis, IN Economic Development Revenue
Bonds (Jewish Federation Campus), Weekly Reset
VRDO*, LOC: Fifth Third Bank
1,680,000 2.30%, 04/01/05........................................ VMIG1/NR 1,680,000
--------------
MICHIGAN (4.1%)
Eastern Michigan University, MI University Revenue
Bonds, Daily Reset VRDO*, FGIC Insured
$ 7,035,000 2.29%, 06/01/27........................................ NR/A-1+ $ 7,035,000
Northern Michigan University Revenue Bonds, Daily
Reset VRDO*, FGIC Insured
1,400,000 2.29%, 06/01/31........................................ VMIG1/A-1+ 1,400,000
--------------
8,435,000
--------------
MINNESOTA (2.4%)
Cohasset, MN Revenue Bonds (Minnesota Power &
Light Co. Project), Series A, Daily Reset VRDO*,
LOC: ABN Amro Bank N.V.
3,875,000 2.29%, 06/01/20........................................ NR/A-1+ 3,875,000
Cohasset, MN Revenue Bonds (Minnesota Power &
Light Co. Project), Series B, Daily Reset VRDO*,
LOC: ABN Amro Bank N.V.
200,000 2.29%, 06/01/13........................................ NR/A-1+ 200,000
Cohasset, MN Revenue Bonds (Minnesota Power &
Light Co. Project), Series C, Daily Reset VRDO*,
LOC: ABN Amro Bank N.V.
800,000 2.29%, 06/01/13........................................ NR/A-1+ 800,000
--------------
4,875,000
--------------
MISSOURI (14.7%)
Kansas City, MO Industrial Development Authority
Revenue Bonds, (Ewing Marion Kaufman
Foundation), Daily Reset VRDO*
7,110,000 2.29%, 04/01/27........................................ NR/A-1+ 7,110,000
MISSOURI (CONTINUED)
Kansas City, MO Industrial Development Authority
Revenue Bonds, (Ewing Marion Kauffman
Foundation), Daily Reset VRDO*
$ 2,000,000 2.29%, 04/01/27........................................ .. NR/A-1+ $ 2,000,000
Missouri State, Health & Educational Facilities Authority
Revenue Bonds (St. Louis University), Series A,
Daily Reset VRDO*, SPA: Bank of America N.A.
1,485,000 2.34%, 10/01/09........................................... VMIG1/A-1+ 1,485,000
Missouri State, Health & Educational Facilities Authority
Revenue Bonds (St. Louis University), Series B,
Daily Reset VRDO*, SPA: Bank of America N.A.
5,155,000 2.34%, 10/01/24........................................... VMIG1/A-1+ 5,155,000
Missouri State, Health & Educational Facilities Authority
Revenue Bonds (Washington University), Series C,
Daily Reset VRDO*, SPA: JP Morgan Chase Bank
2,800,000 2.29%, 09/01/30........................................... VMIG1/A-1+ 2,800,000
Missouri State, Health & Educational Facilities Authority
Revenue Bonds (Washington University), Series C,
Daily Reset VRDO*, SPA: JP Morgan Chase Bank
1,000,000 2.29%, 03/01/40........................................... VMIG1/A-1+ 1,000,000
Missouri State, Health & Educational Facilities Authority
Revenue Bonds (Washington University), Series D,
Daily Reset VRDO*, SPA: JP Morgan Chase Bank
2,100,000 2.29%, 09/01/30........................................... VMIG1/A-1+ 2,100,000
University of Missouri, Curators of the University of
Missouri System Facilities Revenue Bonds,
Series A, Daily Reset VRDO*
8,500,000 2.30%, 11/01/32........................................... VMIG1/A-1+ 8,500,000
-------------
30,150,000
-------------
MONTANA (3.7%)
Montana State, Health Facilities Authority Revenue
Bonds, Series A, Weekly Reset VRDO*, FGIC
Insured SPA: Wells Fargo
$ 7,655,000 2.30%, 12/01/15........................................... VMIG1/A-1+ $ 7,655,000
-------------
NEVADA (4.1%)
Clark County, NV Airport Revenue Bonds, Series C,
Weekly Reset VRDO*, FGIC Insured, SPA:
Landesbank Baden-Wurttm
8,500,000 2.28%, 07/01/29........................................... VMIG1/A-1+ 8,500,000
-------------
NEW YORK (5.6%)
Long Island, NY Power Authority Revenue Bonds,
Series 1A, Weekly Reset VRDO*, LOC:
Bayerische Landesbank
7,500,000 2.28%, 05/01/33........................................... VMIG1/A-1+ 7,500,000
New York, NY City Transitional Finance Authority
Revenue Bonds, Series 3, Daily Reset VRDO*,
SPA: Bank of New York
4,100,000 2.28%, 11/01/22........................................... VMIG1/A-1+ 4,100,000
-------------
11,600,000
-------------
NORTH CAROLINA (10.6%)
Charlotte, NC VRDO*
8,965,000 2.28%, 07/01/16........................................... VMIG1/A-1+ 8,965,000
Concord, NC Utility Systems Revenue Bonds,
Series B, Weekly Reset VRDO*, FSA Insured, SPA:
Wachovia Bank
6,065,000 2.28%, 12/01/22........................................... VMIG1/NR 6,065,000
Durham, NC Public Improvement General
Obligation Bonds VRDO*
2,975,000 2.31%, 02/01/11........................................... VMIG1/A-1** 2,975,000
NORTH CAROLINA (CONTINUED)
Durham, NC General Obligation Bonds (Public
Improvement Project), Weekly Reset VRDO*, SPA:
Wachovia Bank of North Carolina
$ 1,150,000 2.31%, 02/01/09........................................ VMIG1/A-1** $ 1,150,000
1,270,000 2.31%, 02/01/12........................................ VMIG1/A-1** 1,270,000
1,475,000 2.31%, 02/01/13........................................ VMIG1/A-1** 1,475,000
-------------
21,900,000
-------------
OHIO (1.6%)
Ohio Housing Finance Agency Mortgage Revenue
Bonds (Residential Mortgage), Series E-AMT,
Weekly Reset VRDO*, SPA: FHLB
3,245,000 2.31%, 09/01/34........................................ VMIG1/NR 3,245,000
-------------
TEXAS (4.1%)
Texas State, TX Turnpike Authority Central System
Revenue Bonds, Series B, Weekly Reset VRDO*,
AMBAC Insured, SPA: Bank of Nova Scotia
8,500,000 2.28%, 08/15/42........................................ Aaa/A-1 8,500,000
-------------
UTAH (1.5%)
University of Utah, Auxiliary & Campus Facilities
Revenue Bonds, Series A, Weekly Reset VRDO*,
SPA: Bank of Nova Scotia
3,150,000 2.27%, 04/01/27........................................ VMIG1/A-1 3,150,000
-------------
VIRGINIA (2.9%)
University of Virginia Revenue Bonds, Series A,
Weekly Reset VRDO*
6,000,000 2.22%, 06/01/34........................................ VMIG1/A-1+ 6,000,000
-------------
WASHINGTON (4.1%)
Seattle, WA Water System Revenue Bonds, Series A,
Weekly Reset VRDO*, LOC: Bayerische Landesbank
$ 8,500,000 2.28%, 03/01/32........................................ VMIG1/A-1+ $ 8,500,000
-------------
Total Investments (Amortized Cost
$205,854,730) (a)................................. 99.9% 205,854,730
Other assets less liabilities....................... 0.1 225,665
----- -------------
NET ASSETS.......................................... 100.0% $ 206,080,395
===== =============
* Variable rate demand obligations (VRDOs) are payable upon demand within
the same day for securities with daily liquidity or seven days for
securities with weekly liquidity.
** On April 14, 2005, the S&P rating changed to A-1+. (a) Cost for Federal
income tax and financial reporting purposes is identical.
PORTFOLIO DISTRIBUTION (UNAUDITED)
Colorado 3.7% Nevada 4.1%
Hawaii 22.4 New York 5.6
Idaho 3.9 North Carolina 10.6
Illinois 9.8 Ohio 1.6
Indiana 0.8 Texas 4.1
Michigan 4.1 Utah 1.5
Minnesota 2.4 Virginia 2.9
Missouri 14.7 Washington 4.1
Montana 3.7 -----
100.0%
=====
PORTFOLIO ABBREVIATIONS:
AMBAC - American Municipal Bond Assurance Corp.
AMT - Alternative Minimum Tax
FGIC - Financial Guaranty Insurance Corporation
FHLB - Federal Home Loan Bank
FSA - Financial Security Assurance
LOC - Letter of Credit
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
MARCH 31, 2005
FACE
AMOUNT U.S. GOVERNMENT AGENCIES (100.0%) VALUE
- --------------- --------------------------------------------------------- --------------
FEDERAL FARM CREDIT BANK (19.0%)
$ 127,000,000 2.55%, 4/01/05 .......................................... $ 127,000,000
50,000,000 2.65%, 4/11/05 .......................................... 49,963,195
--------------
176,963,195
--------------
FEDERAL HOME LOAN BANK (81.0%)
65,000,000 2.58%, 4/01/05 .......................................... 65,000,000
40,000,000 2.44%, 4/06/05 .......................................... 39,986,444
65,000,000 2.07%, 4/08/05 .......................................... 64,973,838
50,000,000 2.62%, 4/13/05 .......................................... 49,956,407
70,000,000 2.70%, 4/15/05 .......................................... 69,926,500
50,000,000 2.55%, 4/20/05 .......................................... 49,932,708
40,000,000 2.56%, 4/22/05 .......................................... 39,940,267
75,000,000 2.71%, 4/27/05 .......................................... 74,853,208
59,253,000 2.61%, 4/29/05 .......................................... 59,132,716
59,000,000 2.59%, 5/04/05 .......................................... 58,859,924
50,000,000 2.80%, 5/27/05 .......................................... 49,781,833
25,000,000 2.98%, 7/15/05 .......................................... 24,782,708
60,000,000 3.07%, 8/24/05 .......................................... 59,259,292
49,900,000 3.14%, 9/16/05 .......................................... 49,168,799
--------------
755,554,644
--------------
Total U.S. Government Agencies ....................... 932,517,839
--------------
SHARES INVESTMENT COMPANY (0.2%)
1,678,605 JP Morgan Government Money Market Fund,
Capital Shares........................................ 1,678,605
--------------
Total Investments
(Amortized Cost $934,196,444) (a)........ 100.2% 934,196,444
Other assets less liabilities ............... (0.2) (1,874,945)
----- -------------
NET ASSETS................................... 100.0% $ 932,321,499
===== =============
(a) Cost for Federal income tax purposes and financial reporting is identical.
PORTFOLIO DISTRIBUTION (UNAUDITED)
U.S. Government Agencies......................... 99.8%
Investment Company............................... 0.2
-----
100.0%
=====
See accompanying notes to financial statements.
THE PACIFIC CAPITAL FUNDS
OF CASH ASSETS TRUST
STATEMENTS OF ASSETS AND LIABILITIES
MARCH 31, 2005
CASH TAX-FREE GOVERNMENT
FUND FUND FUND
------------- ------------- -------------
ASSETS:
Investments at value and amortized cost (note 2) .................. $ 487,690,748 $ 205,854,730 $ 934,196,444
Repurchase agreement (note 2) ..................................... 45,000,000 -- --
Cash .............................................................. -- 21,917 --
Interest receivable ............................................... 121,852 563,509 8,881
Other assets ...................................................... 12,764 4,790 32,490
------------- ------------- -------------
Total Assets ................................................... 532,825,364 206,444,946 934,237,815
------------- ------------- -------------
LIABILITIES:
Dividends payable ................................................. 829,318 255,993 1,453,431
Adviser and Administrator fees payable ............................ 207,542 54,636 306,698
Distribution fees payable ......................................... 31,273 16,605 115,893
Accrued expenses .................................................. 36,557 37,317 40,294
------------- ------------- -------------
Total Liabilities .............................................. 1,104,690 364,551 1,916,316
------------- ------------- -------------
NET ASSETS ........................................................ $ 531,720,674 $ 206,080,395 $ 932,321,499
------------- ------------- -------------
NET ASSETS CONSIST OF:
Capital Stock - Authorized an unlimited number of shares,
par value $.01 per share ....................................... $ 5,317,075 $ 2,060,782 $ 9,322,538
Additional paid-in capital ........................................ 526,390,161 204,127,490 922,931,441
Undistributed (distributions in excess of) net
investment income .............................................. 13,438 (107,877) 68,263
Accumulated net realized loss on investments ...................... -- -- (743)
------------- ------------- -------------
$ 531,720,674 $ 206,080,395 $ 932,321,499
============= ============= =============
SHARES OF BENEFICIAL INTEREST:
Original Shares Class:
Net Assets ..................................................... $ 365,722,878 $ 133,928,646 $ 354,285,665
============= ============= =============
Shares outstanding ............................................. 365,941,670 133,927,188 354,256,635
============= ============= =============
Net asset value per share ...................................... $ 1.00 $ 1.00 $ 1.00
============= ============= =============
Service Shares Class:
Net Assets ..................................................... $ 165,997,796 $ 72,151,749 $ 578,035,834
============= ============= =============
Shares outstanding ............................................. 165,765,794 72,151,025 577,997,206
============= ============= =============
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 YEAR ENDED MARCH 31, 2005
CASH TAX-FREE GOVERNMENT
FUND FUND FUND
------------ ------------ ------------
INVESTMENT INCOME:
Interest income ............................................... $ 7,871,402 $ 2,697,654 $ 14,261,585
------------ ------------ ------------
EXPENSES:
Investment Adviser fees (note 3) .............................. 1,611,275 553,218 2,755,992
Administrator fees (note 3) ................................... 640,201 186,437 628,238
Distribution fees (note 3) .................................... 308,691 149,014 1,246,209
Trustees' fees and expenses ................................... 86,081 45,789 130,204
Insurance ..................................................... 42,911 16,291 84,684
Legal fees (note 3) ........................................... 42,580 27,551 90,999
Registration fees and dues .................................... 40,389 3,417 9,368
Shareholders' reports ......................................... 20,594 9,702 28,271
Fund accounting fees .......................................... 20,567 21,278 20,434
Auditing and tax fees ......................................... 19,039 20,732 18,894
Transfer and shareholder servicing agent fees ................. 10,415 12,163 10,095
Custodian fees ................................................ 6,456 11,725 5,173
Chief Compliance Officer (note 3) ............................. 2,266 2,266 2,266
Miscellaneous ................................................. 5,126 6,688 31,581
------------ ------------ ------------
Total expenses ................................................ 2,856,591 1,066,271 5,062,408
Advisory fees contractual reduction (note 3) .................. (640,692) (291,119) (1,227,819)
Administrative fees contractual reduction (note 3) ............ (256,008) (98,109) (280,009)
Expenses paid indirectly (note 5) ............................. (4,112) (2,768) (2,826)
------------ ------------ ------------
Net expenses .................................................. 1,955,779 674,275 3,551,754
------------ ------------ ------------
Net investment income ............................................ 5,915,623 2,023,379 10,709,831
Net realized gain (loss) from securities transactions ............ -- -- (743)
------------ ------------ ------------
Net change in net assets resulting from operations ............... $ 5,915,623 $ 2,023,379 $ 10,709,088
============ ============ ============
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
----------------------------------- -----------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
MARCH 31, 2005 MARCH 31, 2004 MARCH 31, 2005 MARCH 31, 2004
--------------- --------------- --------------- ---------------
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income ................. $ 5,915,623 $ 3,803,973 $ 2,023,379 $ 1,201,018
Net realized gain (loss)
from securities transactions ........ -- 1,319 -- 38
--------------- --------------- --------------- ---------------
Net change in net assets
resulting from operations ........... 5,915,623 3,805,292 2,023,379 1,201,056
--------------- --------------- --------------- ---------------
DIVIDENDS TO SHAREHOLDERS
FROM NET INVESTMENT INCOME:
Original Shares ..................... (4,534,518) (3,014,705) (549,754) (891,803)
Service Shares ...................... (1,381,105) (789,268) (1,473,625) (309,215)
--------------- --------------- --------------- ---------------
Total dividends to shareholders
from net investment income .......... (5,915,623) (3,803,973) (2,023,379) (1,201,018)
--------------- --------------- --------------- ---------------
CAPITAL SHARE TRANSACTIONS
(at $1.00 per share):
Proceeds from shares sold:
Original Shares ..................... 897,374,600 710,757,056 313,771,101 127,920,769
Service Shares ...................... 473,009,866 356,252,712 93,903,240 63,986,710
--------------- --------------- --------------- ---------------
1,370,384,466 1,067,009,768 407,674,341 191,907,479
--------------- --------------- --------------- ---------------
Reinvested dividends:
Original Shares ..................... 99,479 61,263 65,741 69,733
Service Shares ...................... 1,230,616 802,624 493,472 320,397
--------------- --------------- --------------- ---------------
1,330,095 863,887 559,213 390,130
--------------- --------------- --------------- ---------------
Cost of shares redeemed:
Original Shares ..................... (818,780,462) (784,672,808) (278,691,955) (159,333,530)
Service Shares ...................... (427,424,705) (361,048,456) (71,906,960) (70,987,619)
--------------- --------------- --------------- ---------------
(1,246,205,167) (1,145,721,264) (350,598,915) (230,321,149)
--------------- --------------- --------------- ---------------
Change in net assets
from capital share transactions ..... 125,509,394 (77,847,609) 57,634,639 (38,023,540)
--------------- --------------- --------------- ---------------
Total change in net assets ........... 125,509,394 (77,846,290) 57,634,639 (38,023,502)
NET ASSETS:
Beginning of period ................. 406,211,280 484,057,570 148,445,756 186,469,258
--------------- --------------- --------------- ---------------
End of period* ...................... $ 531,720,674 $ 406,211,280 $ 206,080,395 $ 148,445,756
=============== =============== =============== ===============
*Includes undistributed (distributions
in excess of) net investment income of: $ 13,438 $ 13,438 $ (107,877) $ (87,360)
=============== =============== =============== ===============
GOVERNMENT FUND
-----------------------------------
YEAR ENDED YEAR ENDED
MARCH 31, 2005 MARCH 31, 2004
--------------- ---------------
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income ................. $ 10,709,831 $ 6,140,224
Net realized gain (loss)
from securities transactions ........ (743) 421
--------------- ---------------
Net change in net assets
resulting from operations ........... 10,709,088 6,140,645
--------------- ---------------
DIVIDENDS TO SHAREHOLDERS
FROM NET INVESTMENT INCOME:
Original Shares ..................... (5,785,972) (2,775,205)
Service Shares ...................... (4,923,859) (3,365,022)
--------------- ---------------
Total dividends to shareholders
from net investment income .......... (10,709,831) (6,140,227)
--------------- ---------------
CAPITAL SHARE TRANSACTIONS
(at $1.00 per share):
Proceeds from shares sold:
Original Shares ..................... 819,559,720 1,035,054,356
Service Shares ...................... 2,125,769,411 1,762,487,853
--------------- ---------------
2,945,329,131 2,797,542,209
--------------- ---------------
Reinvested dividends:
Original Shares ..................... 42,138 46,240
Service Shares ...................... 5,231,536 3,380,896
--------------- ---------------
5,273,674 3,427,136
--------------- ---------------
Cost of shares redeemed:
Original Shares ..................... (728,780,568) (1,041,701,880)
Service Shares ...................... (2,128,042,587) (1,638,518,517)
--------------- ---------------
(2,856,823,155) (2,680,220,397)
--------------- ---------------
Change in net assets
from capital share transactions ..... 93,779,650 120,748,948
--------------- ---------------
Total change in net assets ........... 93,778,907 120,749,366
NET ASSETS:
Beginning of period ................. 838,542,592 717,793,226
--------------- ---------------
End of period* ...................... $ 932,321,499 $ 838,542,592
=============== ===============
*Includes undistributed (distributions
in excess of) net investment income of: $ 68,263 $ 68,263
=============== ===============
See accompanying notes to financial statements.
THE PACIFIC CAPITAL FUNDS
OF CASH ASSETS TRUST
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2005
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 continue 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 March 31, 2005, advisory and
administrative fees have been contractually reduced (see ii above) due to the
low interest rate environment. For the year ended March 31, 2005:
Cash Fund incurred advisory and administration fees of $1,611,275 and
$640,201; due to the expense limitation, such fees were reduced by
$640,692 and $256,008, respectively.
Tax-Free Fund incurred advisory and administration fees of $553,218 and
$186,437; due to the expense limitation, such fees were reduced by
$291,119 and $98,109, respectively.
Government Fund incurred advisory and administration fees of $2,755,992
and $628,238; due to the expense limitation, such fees were reduced by
$1,227,819 and $280,009, respectively.
Under the October 1, 2004, Compliance Agreement with the Administrator,
the Administrator is compensated for Chief Compliance Officer related services
provided to enable the Trust to comply with Rule 38a-1 of the Investment Company
Act of 1940.
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 respective 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 respective Fund's 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 Trust.
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 year ended March 31, 2005, the following amounts were accrued for
legal fees: Cash Fund $42,580; Tax-Free Fund $27,551; Government Fund $90,999.
Of these amounts, $37,473, $25,722 and $82,928 respectively, were allocable to
Hollyer Brady Barrett & Hines LLP, counsel to the Trust, for legal services in
conjunction with the respective Fund's ongoing operations. The Secretary of the
Trust 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 during 2005 and 2004 were as follows:
CASH FUND TAX-FREE FUND GOVERNMENT FUND
--------------------------- --------------------------- ---------------------------
2005 2004 2005 2004 2005 2004
----------- ----------- ----------- ----------- ----------- -----------
Net tax-exempt income .............. $ -- $ -- $ 2,023,379 $ 1,184,399 $ -- $ --
Ordinary income .................... 5,915,623 3,803,973 -- 16,619 10,709,831 6,140,227
Capital gain ....................... -- -- -- -- -- --
----------- ----------- ----------- ----------- ----------- -----------
Total .............................. $ 5,915,623 $ 3,803,973 $ 2,023,379 $ 1,201,018 $10,709,831 $ 6,140,227
=========== =========== =========== =========== =========== ===========
As of March 31, 2005, the components of distributable earning on a tax
basis were as follows:
TAX-FREE GOVERNMENT
CASH FUND FUND FUND
------------ ------------ ------------
Undistributed ordinary income ......................... $ 13,438 $ -- $ 68,263
Accumulated net realized loss
on investments .................................... -- -- (743)
------------ ------------ ------------
$ 13,438 $ -- $ 67,520
------------ ------------ ------------
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 U.S. 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
------------ ------------ ------------
Additional Paid-in Capital ............................ $ -- $ 20,517 $ --
Undistributed net investment income ................... -- (20,517) --
These reclassifications are primarily due to taxable distributions in
excess of net investment income for the Tax-Free 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
------------------------------------------------------
YEAR ENDED MARCH 31,
------------------------------------------------------
2005 2004 2003 2002 2001
------ ------ ------ ------ ------
Net asset value, beginning of period ........ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------ ------ ------ ------ ------
Income from investment operations:
Net investment income .................... 0.01 0.01 0.01 0.03 0.06
------ ------ ------ ------ ------
Less distributions:
Dividends from net investment income ..... (0.01) (0.01) (0.01) (0.03) (0.06)
------ ------ ------ ------ ------
Net asset value, end of period .............. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
====== ====== ====== ====== ======
Total return ................................ 1.36% 0.90% 1.35% 2.52% 5.90%
Ratios/supplemental data
Net assets, end of period (in millions) .. $ 366 $ 287 $ 361 $ 353 $ 364
Ratio of expenses to average net assets .. 0.37% 0.21% 0.36% 0.58% 0.57%
Ratio of net investment income to
average net assets ..................... 1.39% 0.90% 1.34% 2.51% 5.77%
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 ..................... 1.19% 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 .. 0.37% 0.21% 0.36% 0.57% 0.57%
SERVICE SHARES
------------------------------------------------------
YEAR ENDED MARCH 31,
------------------------------------------------------
2005 2004 2003 2002 2001
------ ------ ------ ------ ------
Net asset value, beginning of period ........ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------ ------ ------ ------ ------
Income from investment operations:
Net investment income .................... 0.01 0.01 0.01 0.02 0.05
------ ------ ------ ------ ------
Less distributions:
Dividends from net investment income ..... (0.01) (0.01) (0.01) (0.02) (0.05)
------ ------ ------ ------ ------
Net asset value, end of period .............. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
====== ====== ====== ====== ======
Total return ................................ 1.11% 0.65% 1.09% 2.27% 5.63%
Ratios/supplemental data
Net assets, end of period (in millions) .. $ 166 $ 119 $ 123 $ 146 $ 221
Ratio of expenses to average net assets .. 0.61% 0.46% 0.61% 0.83% 0.82%
Ratio of net investment income to
average net assets ..................... 1.12% 0.65% 1.10% 2.36% 5.49%
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 .. 0.81% 0.82% 0.83% -- --
Ratio of net investment income to
average net assets ..................... 0.91% 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 .. 0.61% 0.46% 0.61% 0.82% 0.82%
See accompanying notes to financial statements.
PACIFIC CAPITAL
TAX-FREE CASH ASSETS TRUST
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
ORIGINAL SHARES
------------------------------------------------------
YEAR ENDED MARCH 31,
------------------------------------------------------
2005 2004 2003 2002 2001
------ ------ ---- ------ ------
Net asset value, beginning of period ..... $ 1.00 $ 1.00 1.00 $ 1.00 $ 1.00
------ ------ ---- ------ ------
Income from investment operations:
Net investment income ................. 0.01 0.01 0.01 0.02 0.04
------ ------ ---- ------ ------
Less distributions:
Dividends from net investment income .. (0.01) (0.01) (0.01) (0.02) (0.04)
------ ------ ---- ------ ------
Net asset value, end of period ........... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
====== ====== ====== ====== ======
Total return ............................. 1.16% 0.84% 1.15% 2.00% 3.58%
Ratios/supplemental data
Net assets, end of period (in millions) $ 134 $ 99 $ 130 $ 100 $ 101
Ratio of expenses to average net assets 0.29% 0.17% 0.28% 0.51% 0.53%
Ratio of net investment income to
average net assets .................. 1.17% 0.84% 1.13% 1.94% 3.50%
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 0.49% 0.52% 0.50% -- --
Ratio of net investment income to
average net assets .................. 0.96% 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 .. 0.28% 0.17% 0.27% 0.51% 0.53%
SERVICE SHARES
------------------------------------------------------
YEAR ENDED MARCH 31,
------------------------------------------------------
2005 2004 2003 2002 2001
------ ------ ------ ------ ------
Net asset value, beginning of period ..... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------ ------ ------ ------ ------
Income from investment operations:
Net investment income ................. 0.01 0.01 0.01 0.02 0.03
------ ------ ------ ------ ------
Less distributions:
Dividends from net investment income .. (0.01) (0.01) (0.01) (0.02) (0.03)
------ ------ ------ ------ ------
Net asset value, end of period ........... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
====== ====== ====== ====== ======
Total return ............................. 0.90% 0.59% 0.90% 1.75% 3.32%
Ratios/supplemental data
Net assets, end of period (in millions) $ 72 $ 50 $ 56 $ 52 $ 54
Ratio of expenses to average net assets 0.53% 0.42% 0.53% 0.77% 0.78%
Ratio of net investment income to
average net assets .................. 0.92% 0.59% 0.89% 1.77% 3.26%
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 0.75% 0.77% 0.76% -- --
Ratio of net investment income to
average net assets .................. 0.71% 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 .. 0.53% 0.42% 0.52% 0.77% 0.78%
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
------------------------------------------------------
YEAR ENDED MARCH 31,
------------------------------------------------------
2005 2004 2003 2002 2001
------ ------ ------ ------ ------
Net asset value, beginning of period ..... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------ ------ ------ ------ ------
Income from investment operations:
Net investment income ................. 0.01 0.01 0.01 0.03 0.06
------ ------ ------ ------ ------
Less distributions:
Dividends from net investment income .. (0.01) (0.01) (0.01) (0.03) (0.06)
------ ------ ------ ------ ------
Net asset value, end of period ........... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
====== ====== ====== ====== ======
Total return ............................. 1.41% 0.96% 1.34% 2.73% 5.88%
Ratios/supplemental data
Net assets, end of period (in millions) $ 354 $ 263 $ 270 $ 306 $ 151
Ratio of expenses to average net assets 0.27% 0.11% 0.25% 0.45% 0.47%
Ratio of net investment income to
average net assets .................. 1.42% 0.96% 1.34% 2.47% 5.73%
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 .................. 1.24% 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 0.27% 0.11% 0.24% 0.45% 0.47%
SERVICE SHARES
------------------------------------------------------
YEAR ENDED MARCH 31,
------------------------------------------------------
2005 2004 2003 2002 2001
------ ------ ------ ------ ------
Net asset value, beginning of period ..... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------ ------ ------ ------ ------
Income from investment operations:
Net investment income ................. 0.01 0.01 0.01 0.02 0.05
------ ------ ------ ------ ------
Less distributions:
Dividends from net investment income .. (0.01) (0.01) (0.01) (0.02) (0.05)
------ ------ ------ ------ ------
Net asset value, end of period ........... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
====== ====== ====== ====== ======
Total return ............................. 1.16% 0.71% 1.09% 2.48% 5.62%
Ratios/supplemental data
Net assets, end of period (in millions) $ 578 $ 575 $ 448 $ 457 $ 332
Ratio of expenses to average net assets 0.52% 0.36% 0.49% 0.70% 0.72%
Ratio of net investment income to
average net assets .................. 1.16% 0.71% 1.08% 2.39% 5.47%
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 .................. 0.98% 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 0.52% 0.36% 0.49% 0.70% 0.72%
See accompanying notes to financial statements.
ADDITIONAL INFORMATION (UNAUDITED)
TRUSTEES AND OFFICERS(1)(2)
NUMBER OF
POSITIONS PORTFOLIOS OTHER DIRECTORSHIPS
HELD WITH IN FUND HELD BY TRUSTEE
NAME, TRUST AND PRINCIPAL COMPLEX(5) (THE POSITION HELD IS
ADDRESS(3) LENGTH OF OCCUPATION(S) OVERSEEN A DIRECTORSHIP UNLESS
AND DATE OF BIRTH SERVICE(6) DURING PAST 5 YEARS BY TRUSTEE INDICATED OTHERWISE.)
- ----------------- ---------- ------------------- ---------- ---------------------
INTERESTED TRUSTEE (6)
Diana P. Herrmann Trustee since Vice Chair and Chief Executive Officer of 10 None
New York, NY 2004, President Aquila Management Corporation, Founder of
(02/25/58) since 1998 and the Aquila(sm) Group of Funds(7) and parent
Vice Chair of Aquila Investment Management LLC,
since 2003 Administrator, since 2004, President and
Chief Operating Officer since 1997, a
Director since 1984, Secretary since 1986
and previously its Executive Vice
President, Senior Vice President or Vice
President, 1986-1997; Chief Executive
Officer and Vice Chair since 2004 and
President, Chief Operating Officer and
Manager of the Administrator since 2003;
Vice Chair, President, Executive Vice
President or Senior Vice President of funds
in the Aquila(sm) Group of Funds since 1986;
Director of the Distributor since 1997;
trustee, Reserve Money-Market Funds,
1999-2000 and Reserve Private Equity
Series, 1998-2000; Governor, Investment
Company Institute (2004) and head of its
Small Funds Committee since 2004; active in
charitable and volunteer organizations.
NON-INTERESTED TRUSTEES
Theodore T. Mason Chair of the Executive Director, East Wind Power 10 Trustee, Pimco
New York, NY Board of Partners LTD since 1994 and Louisiana Power Advisors VIT.
(11/24/35) Trustees since Partners, 1999-2003; Treasurer, Alumni
2004 and Association of SUNY Maritime College since
Trustee 2004 (President, 2002-2003, First Vice
since 1984 President, 2000-2001, Second Vice
President, 1998-2000) and director of the
same organization since 1997; Director,
STCM Management Company, Inc., 1973-2004;
twice national officer of Naval Reserve
Association, commanding officer of four
naval reserve units and Captain, USNR
(Ret); director, The Navy League of the
United States New York Council since 2002;
trustee, The Maritime Industry Museum at
Fort Schuyler, 2000-2004; and the Maritime
College at Fort Schuyler Foundation, Inc.
since 2000.
Thomas W. Courtney Trustee President, Courtney Associates, Inc., a 5 Chairman of the Board
Sewickley, PA since 1984 venture capital firm, since 1988. of Oppenheimer Quest
(08/17/33) Value Funds Group,
Oppenheimer Small Cap
Value Fund,
Oppenheimer Midcap
Fund, and Oppenheimer
Rochester Group of
Funds; Chairman of the
Board of Pimco
Advisors VIT.
Stanley W. Hong Trustee President, Waste Management of Hawaii, Inc. 4 Trustee, Pacific
Honolulu, HI since 1993 since 2002; Corporate Vice President, Capital Funds, which
(04/05/36) Hawaii Area, Waste Management, Inc. since includes 11 bond and
2002; Trustee, The King William Charles stock funds; director,
Lunalilo Trust Estate since 2001; President First Insurance Co. of
and Chief Executive Officer, The Chamber of Hawaii, Ltd., Lanihau
Commerce of Hawaii, 1996-2001; director, Properties, Ltd.
Hawaii Public Television Foundation since
1998; Regent, Chaminade University of
Honolulu; Chair - trustees, Heald College;
trustee, the Nature Conservancy of Hawaii;
and director of other corporate and
community organizations.
Russell K. Okata Trustee Executive Director, Hawaii Government 4 Trustee, Pacific
Honolulu, HI since 1993 Employees Association AFSCME Local 152, Capital Funds, which
(03/22/44) AFL-CIO since 1981; International Vice includes 11 bond and
President, American Federation of State, stock funds; Chairman,
County and Municipal Employees, AFL-CIO Royal State Group.
since 1981; director of various civic and
charitable organizations.
Douglas Philpotts Trustee Retired; formerly director, Chairman of the 4 Trustee, Pacific
Honolulu, HI since 1992 Board and President of Hawaiian Trust Capital Funds, which
(11/21/31) Company, Limited; present or former includes 11 bond and
director of various Hawaii-based civic and stock funds.
charitable organizations.
Oswald K. Stender Trustee Director, Hawaiian Electric Industries, 4 Trustee, Pacific
Honolulu, HI since 1993 Inc., a public utility holding company, Capital Funds, which
(10/08/31) 1993-2004; trustee, the Bernice Pauahi includes 11 bond and
Bishop Estate 1990-1999; trustee, Office of stock funds; director,
Hawaiian Affairs and a member or trustee of Grace Pacific
several community organizations. Corporation, an
asphalt paving
company, and ACE
Trucking Inc., a
trucking company.
CHAIRMAN EMERITUS
Because of his importance to the shareholders and to enable the Board of Trustees to continue to have the benefit of his
counsel, Mr. Lacy B Herrmann has agreed to continue to be Chairman Emeritus. The Chairman Emeritus may attend Board meetings but has
no voting power.
Lacy B. Herrmann Founder, Founder and Chairman of the Board, Aquila N/A N/A
New York, NY Chairman Management Corporation, the sponsoring
(05/12/29) Emeritus since organization and parent of the Manager or
2004, Trustee, Administrator and/or Adviser or Sub-Adviser
1984-2004, to each fund of the Aquila(sm) Group of
and Chairman Funds; Chairman of the Manager or
of the Board Administrator and/or Adviser or Sub-Adviser
of Trustees, to each since 2004; Founder, Chairman
1984-2003 Emeritus and Trustee of Aquila Rocky
Mountain Equity Fund, Tax-Free Fund For
Utah, Narragansett Insured Tax-Free Income
Fund and Tax-Free Trust of Arizona; Founder
and Chairman Emeritus of Hawaiian Tax-Free
Trust, Pacific Capital Cash Assets Trust,
Pacific Capital Tax-Free Cash Assets Trust,
Pacific Capital U.S. Government Securities
Cash Assets Trust, Tax-Free Fund of
Colorado, Churchill Tax-Free Fund of
Kentucky and Tax-Free Trust of Oregon;
previously Chairman and a Trustee of each
fund in the Aquila(sm) Group of Funds since
its establishment until 2004 or 2005;
Director of the Distributor since 1981 and
formerly Vice President or Secretary,
1981-1998; Trustee Emeritus, Brown
University and the Hopkins School; active
in university, school and charitable
organizations.
OFFICERS
Charles E. Childs, III Executive Vice Executive Vice President of all funds in N/A N/A
New York, NY President the Aquila(sm) Group of Funds and the
(04/01/57) since 2003 Administrator and Adminisrator's parent
since 2003; formerly Senior Vice President,
corporate development, Vice President,
Assistant Vice President and Associate of
the Administrator's parent since 1987;
Senior Vice President, Vice President or
Assistant Vice President of the Aquila
Money-Market Funds, 1988-2003.
Sherri Foster Vice President Senior Vice President, Hawaiian Tax-Free N/A N/A
Lahaina, HI since 1997 Trust since 1993 and formerly Vice
(07/27/50) President or Assistant Vice President; Vice
President or Assistant Vice President of
three Aquila Money-Market Funds; Registered
Representative of the Distributor since 1985.
John M. Herndon Vice President Assistant Secretary of the Aquila(sm) Group N/A N/A
New York, NY since 1990 and of Funds since 1995 and Vice President of
(12/17/39) Assistant the three Aquila Money-Market Funds since
Secretary 1990; Vice President of the Administrator
since 1995 or its predecessor and current parent since 1990.
Robert W. Anderson Chief Compliance Chief Compliance Officer of the Trust, the N/A N/A
New York, NY Officer since Administrator and the Distributor since
(08/23/40) 2004 and 2004, Compliance Officer of the
Assistant Administrator or its predecessor and
Secretary current parent since 1998 and Assistant
since 2000 Secretary of the Aquila(sm) Group of Funds
since 2000; Consultant, The Wadsworth
Group, 1995-1998.
Joseph P. DiMaggio Chief Financial Chief Financial Officer of the Aquila(sm) N/A N/A
(11/06/56) 2003 and Group of Funds since 2003 and Treasurer
Treasurer since 2000; Controller, Van Eck Global
since 2000 Funds, 1993-2000.
Edward M. W. Hines Secretary Partner, Hollyer Brady Barrett & Hines LLP, N/A N/A
New York, NY since 1984 legal counsel to the Trust, since 1989;
(12/16/39) Secretary of the Aquila(sm) Group of Funds.
Lori A. Vindigni Assistant Assistant Treasurer of the Aquila(sm) Group N/A N/A
New York, NY Treasurer of Funds since 2000; Assistant Vice
(11/02/66) since 2000 President of the Administrator or its
predecessor and current parent since 1998;
Fund Accountant for the Aquila(sm) Group of
Funds, 1995-1998.
- -----------
(1) The Trust's Statement of Additional Information includes additional
information about the Trustees and is available, without charge, upon request by
calling 800-437-1020 (toll free).
(2) From time to time Bank of Hawaii may enter into normal investment
management, commercial banking and lending arrangements with one or more of the
Trustees of the Trust and their affiliates. The Asset Management Group of Bank
of Hawaii is the Trust's investment adviser.
(3) The mailing address of each Trustee and officer is c/o Pacific Capital Funds
of Cash Assets Trust, 380 Madison Avenue, New York, NY 10017.
(4) Because the Trust does not hold annual meetings, each Trustee holds office
for an indeterminate term. The term of office of each officer is one year.
(5) Includes certain Aquila-sponsored funds that are dormant and have no public
shareholders.
(6) Ms. Herrmann is an interested person of the Trust as an officer of the
Trust, as a director, officer and shareholder of the Administrator's corporate
parent, as an officer and Manager of the Administrator, and as a shareholder and
director of the Distributor.
(7) In this material Pacific Capital Cash Assets Trust, Pacific Capital U.S.
Government Securities Cash Assets Trust and Pacific Capital Tax-Free Cash Assets
Trust, each of which is a money-market fund, are called the "Aquila Money-Market
Funds"; Hawaiian Tax-Free Trust, Tax-Free Trust of Arizona, Tax-Free Trust of
Oregon, Tax-Free Fund of Colorado, Churchill Tax-Free Fund of Kentucky,
Narragansett Insured Tax-Free Income Fund and Tax-Free Fund For Utah, each of
which is a tax-free municipal bond fund, are called the "Aquila Bond Funds";
Aquila Rocky Mountain Equity Fund is an equity fund; considered together, these
11 funds, which do not include the dormant funds described in footnote 5, are
called the "Aquila(sm) Group of Funds."
- --------------------------------------------------------------------------------
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 October
1, 2004 and held for the six months ended March 31, 2005.
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 MARCH 31, 2005
BEGINNING ENDING EXPENSES
ACTUAL ACCOUNT ACCOUNT PAID DURING
TOTAL RETURN(1) VALUE VALUE THE PERIOD(2)
- --------------------------------------------------------------------------------
CASH FUND
Original Shares 0.85% $1,000.00 $1,008.50 $2.40
Service Shares 0.73% $1,000.00 $1,007.30 $3.65
- --------------------------------------------------------------------------------
TAX-FREE FUND
Original Shares 0.69% $1,000.00 $1,006.90 $1.80
Service Shares 0.57% $1,000.00 $1,005.70 $3.05
- --------------------------------------------------------------------------------
GOVERNMENT FUND
Original Shares 0.88% $1,000.00 $1,008.80 $1.95
Service Chares 0.75% $1,000.00 $1,007.50 $3.20
- --------------------------------------------------------------------------------
(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 0.48% AND 0.73%,
RESPECTIVELY, FOR CASH FUND ORIGINAL SHARES AND SERVICE SHARES, 0.36% AND
0.61%, RESPECTIVELY, FOR TAX-FREE FUND ORIGINAL SHARES AND SERVICE SHARES,
AND 0.39% AND 0.64%, RESPECTIVELY, FOR GOVERNMENT Fund Original Shares and
Service Shares, respectively, multiplied by the average account value over
the period, multiplied by 182/365 (to reflect the one-half year period).
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
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 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 MARCH 31, 2005
HYPOTHETICAL
ANNUALIZED BEGINNING ENDING EXPENSES
TOTAL ACCOUNT ACCOUNT PAID DURING
RETURN VALUE VALUE THE PERIOD
- --------------------------------------------------------------------------------
CASH FUND
Original Shares 5.00% $1,000.00 $1,022.54 $2.42
Service Shares 5.00% $1,000.00 $1,021.29 $3.68
- --------------------------------------------------------------------------------
TAX-FREE FUND
Original Shares 5.00% $1,000.00 $1,023.14 $1.82
Service Shares 5.00% $1,000.00 $1,021.89 $3.07
- --------------------------------------------------------------------------------
GOVERNMENT FUND
Original Shares 5.00% $1,000.00 $1,022.99 $1.97
Service Chares 5.00% $1,000.00 $1,021.74 $3.23
- --------------------------------------------------------------------------------
(1) EXPENSES ARE EQUAL TO THE ANNUALIZED EXPENSE RATIO OF 0.48% AND 0.73%,
RESPECTIVELY, FOR CASH FUND ORIGINAL SHARES AND SERVICE SHARES, 0.36% AND
0.61%, RESPECTIVELY, FOR TAX-FREE FUND ORIGINAL SHARES AND SERVICE SHARES,
AND 0.39% AND 0.64%, RESPECTIVELY, FOR GOVERNMENT FUND ORIGINAL SHARES AND
SERVICE SHARES, RESPECTIVELY, MULTIPLIED BY THE AVERAGE ACCOUNT VALUE OVER
THE PERIOD, MULTIPLIED BY 182/365 (TO REFLECT THE ONE-HALF YEAR PERIOD).
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FEDERAL TAX STATUS OF DISTRIBUTIONS (UNAUDITED)
This information is presented in order to comply with a requirement of the
Internal Revenue Code of 1986, as amended. NO CURRENT ACTION ON THE PART OF
SHAREHOLDERS IS REQUIRED.
For the fiscal year ended March 31, 2005, $2,023,379 of dividends paid by
the Tax-Free Fund were exempt-interest dividends. For the Cash Fund and the
Government Fund all of the dividends paid were ordinary dividend income.
Prior to January 31, 2005, shareholders were mailed IRS Form 1099-DIV
which contained information on the status of distributions paid for the 2004
CALENDAR YEAR.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
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 Trust
twice a year in the semi-annual and annual reports you receive. Additionally, we
prepare, and have available portfolio listings at the end of each quarter.
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 1-800-437-1020.
The Trust additionally files a complete list of its portfolio holding 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, DC or by calling 800-SEC-0330.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PROXY VOTING RECORD (UNAUDITED)
The three portfolios Trust do 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 three portfolios Trust were 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.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PRIVACY NOTICES (UNAUDITED)
PACIFIC CAPITAL FUNDS OF CASH ASSETS TRUST
OUR PRIVACY POLICY. In providing services to you as an individual who owns or is
considering investing in shares of the Trust we collect certain nonpublic
personal information about you. Our policy is to keep this information strictly
safeguarded and confidential, and to use or disclose it only as necessary to
provide services to you or as otherwise permitted by law. Our privacy policy
applies equally to former shareholders and persons who inquire about a fund.
INFORMATION WE COLLECT. "Nonpublic personal information" is personally
identifiable financial information about you as an individual or your family.
The kinds of nonpublic personal information we have about you may include the
information you provide us on your share purchase application or in telephone
calls or correspondence with us, and information about your fund transactions
and holdings, how you voted your shares and the account where your shares are
held.
INFORMATION WE DISCLOSE. We disclose nonpublic personal information about you to
companies that provide necessary services to us, such as the Trust's transfer
agent, distributor, investment adviser or sub-adviser, as permitted or required
by law, or as authorized by you. Any other use is strictly prohibited. We do not
sell information about you or any of our fund shareholders to anyone.
HOW WE SAFEGUARD YOUR INFORMATION. We restrict access to nonpublic personal
information about you to only those persons who need it to provide services to
you or who are permitted by law to receive it. We maintain physical, electronic
and procedural safeguards to protect the confidentiality of all nonpublic
personal information we have about you.
If you have any questions regarding our Privacy Policy, please contact us at
1-800-437-1020.
AQUILA DISTRIBUTORS, INC.
AQUILA INVESTMENT MANAGEMENT LLC
This Privacy Policy also has been adopted by Aquila Distributors, Inc. and
Aquila Investment Management LLC and applies to all nonpublic information about
you that each of these companies may obtain in connection with services provided
to the Trust or to you as a shareholder of the Trust.
- --------------------------------------------------------------------------------
(THIS PAGE INTENTIONALLY LEFT BLANK)
(THIS PAGE INTENTIONALLY LEFT BLANK)
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, Chair
Thomas W. Courtney
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
Robert W. Anderson, Chief Compliance Officer
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
345 Park Avenue o New York, New York 10154
Further information is contained in the Prospectus
which must precede or accompany this report.
ITEM 2. CODE OF ETHICS.
(a) As of March 31, 2005 (the end of the reporting period) the
Trust has adopted a code of ethics that applies to the Trust's
principal executive officer(s)and principal financial officer(s)
and persons performing similar functions ("Covered Officers") as
defined in the Aquila Group of Funds Code of Ethics for Principal
Executive and Senior Financial Officers under Section 406 of the
Sarbanes-Oxley Act of 2002;
(f)(1) Pursuant to Item 10(a)(1), a copy of the Trust's Code of
Ethics that applies to the Trust's principal executive officer(s)
and principal financial officer(s) and persons performing similar
functions is included as an exhibit to its annual report on this
Form N-CSR;
(f)(2) The text of the Trust's Code of Ethics that applies to the
Trust's principal executive officer(s) and principal financial
officer(s) and persons performing similar functions has been
posted on its Internet website which can be found at the Trust's
Internet address at aquilafunds.com.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
(a)(1)(ii) The Board of Trustees of the Fund has determined that
it does not have at least one audit committee financial expert
serving on its audit committee. The Fund does not have such a
person serving on the audit committee because none of the persons
currently serving as Trustees happens to have the technical
accounting and auditing expertise included in the definition of
"audit committee financial expert" recently adopted by the Securities
and Exchange Commission in connection with this Form N-CSR, and the
Board has not heretofore deemed it necessary to seek such a person
for election to the Board.
The primary mission of the Board, which is that of oversight over
the operations and affairs of the Fund, confronts the Trustees with
a wide and expanding range of issues and responsibilities. The
Trustees believe that, accordingly, it is essential that the Board's
membership consist of persons with as extensive experience as possible
in fulfilling the duties and responsibilities of mutual fund directors
and audit committee members and, ideally, with extensive experience
and background relating to the economic and financial sectors and
securities in which the Fund invests, including exposure to the
financial and accounting matters commonly encountered with respect
to those sectors and securities. The Board believes that its current
membership satisfies those criteria. It recognizes that it would
also be helpful to have a member with the relatively focused accounting
and auditing expertise reflected in the applicable definition of
"audit committee financial expert," just as additional members with
similarly focused technical expertise in other areas relevant to
the Fund's operations and affairs would also contribute added value.
However, the Board believes that the Fund is better served, and its
assets better employed, by a policy of hiring experts in various
areas, including the specialized area of technical accounting and
auditing matters, if and as the Board identifies the need, rather
than by seeking to expand its numbers by adding technical experts
in the areas constituting its domain of responsibility. The Fund's
Audit Committee Charter explicitly authorizes the Committee to
retain such experts as it deems necessary in fulfilling its duties
under the Charter.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES
a) Audit Fees - The aggregate fees billed for professional services
rendered by the principal accountant for the audit of the Registrant's
annual financial statements were:
2005 2004
---- ----
Cash Assets Trust $18,095 $16,450
Tax-Free Cash Assets Trust $17,000 $15,450
US Government Securities $17,008 $15,450
b) Audit Related Fees - There were no amounts billed for audit-related
fees over the past two years.
c) Tax Fees - The Registrant was billed by the principal accountant
for return preparation and tax compliance as follows:
2005 2004
---- ----
Cash Assets Trust $9,556 $2,935
Tax-Free Cash Assets Trust $7,755 $2,935
US Government Securities $15,834 $2,935
d) All Other Fees - There were no additional fees paid for audit and
non-audit services other than those disclosed in a) thorough c) above.
e)(1) Currently, the audit committee of the Registrant pre-approves audit
services and fees on an engagement-by-engagement basis
e)(2) None of the services described in b) through d) above were approved
by the audit committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of
Regulation S-X, all were pre-approved on an engagement-by-engagement basis.
f) No applicable.
g) There were no non-audit services fees billed by the Registrant's accountant
to the Registrant's investment adviser or distributor over the past two years
h) 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)(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) 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
- - ---------------------------------
Vice Chair, Trustee and President
June 13, 2005
By: /s/ Joseph P. DiMaggio
- - -----------------------------------
Chief Financial Officer and Treasurer
June 13, 2005
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
June 13, 2005
By: /s/ Joseph P. DiMaggio
- - -----------------------------------
Joseph P. DiMaggio
Chief Financial Officer and Treasurer
June 13, 2005
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.