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: 3/31/07
FORM N-CSR
ITEM 1. REPORTS TO STOCKHOLDERS.
ANNUAL
REPORT
MARCH 31, 2007
PACIFIC
CAPITAL FUNDS(R)
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 AND SALE TO LEFT OF PACIFIC](R)
A CASH MANAGEMENT
INVESTMENT
[LOGO OF THE PACIFIC PACIFIC
CAPITAL FUNDS OF CASH CAPITAL FUNDS(R)
ASSETS TRUST: A LION OF
STANDING ON A TWISTED CASH ASSETS TRUST
ROPE AND SALE TO
LEFT OF PACIFIC](R) ANNUAL REPORT
May, 2007
Dear Investor:
It gives us considerable pleasure to present the Annual Report for The
Pacific Capital Funds of Cash Assets Trust for the fiscal year ended March 31,
2007.
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.
************************************
SLOWING ECONOMY
During the current report period, the U.S. economy continued to grow,
albeit at a somewhat slower pace. It would appear that the Federal Reserve
Board's (the "Fed") two-year campaign of raising short-term interest rates to
slow the economy may have taken hold. Recall, when the Fed began raising
short-term interest rates in March 2004, the Federal Fund's rate - the interest
rate member banks charge each other for overnight loans and the primary tool for
influencing economic activity - was 1%, a historically low rate environment.
After 17 consecutive interest rate hikes of 0.25% each ending in June 2006, the
Fed Fund's rate was 5.25%. The Fed's action along with a weakening manufacturing
sector, slumping housing market and high oil prices have contributed to the
slowing of the U.S. economy to its lowest level in four years.
With mounting evidence of a slowing economy and mixed signs of a rising
level of inflation, the Fed's monetary policy has remained steady and
noncommittal about the outlook for future rate action. Economic analysts
continue to debate the direction of the economy. On the one hand, the Fed could
orchestrate an economic "soft landing" with positive growth and low inflation.
On the other hand, should the economy surprise and show signs of heating up with
inflation rising, the Fed may choose to raise short-term interest rates.
A WATCHFUL EYE
Rest assured the Trust's investment management team will seek to keep a
watchful eye on economic developments, financial markets and interest rate
movements, as they steer the course of
NOT A PART OF THE ANNUAL REPORT
each of the Trust's portfolios. In managing the portfolios, the team intends to
continue to be alert to market opportunities as it seeks to produce a higher
return competitive with other short-term alternatives.
You can be assured that in our desire 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. Safety of your
cash reserves remains of utmost concern to us. We believe that there is
absolutely no substitute for strict adherence to high quality of securities
which possess minimum credit risk.
On behalf of the Board of Trustees and the Trust's management, thank your
for your continued confidence and trust you have placed in us. We look forward
to serving your investment needs for many years to come.
Sincerely,
/s/ Diana P. Herrmann /s/ Lacy B. Herrmann
Diana P. Herrmann Lacy B. Herrmann
President Founder and Chairman Emeritus
NOT A PART OF THE ANNUAL REPORT
- --------------------------------------------------------------------------------
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 statement of assets and liabilities,
including the schedules of investments, 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"), as of March 31, 2007 and the
related statements of operations for the year then ended, and the changes in net
assets and the financial highlights for each of the two 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. The financial highlights for each of the years in the three year period
ended March 31, 2005 have been audited by other auditors, whose report dated May
23, 2005 expressed an unqualified opinion on such financial highlights.
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 our audits to obtain reasonable assurance about whether the
financial statements and financial highlights are free of material misstatement.
The Trust is not required to have, nor were we engaged to perform, an audit of
the Trust's internal control over financial reporting. Our audits included
consideration of internal control over financial reporting as a basis for
designing audit procedures that are appropriate in the circumstances, but not
for the purpose of expressing an opinion on the effectiveness of the Trust's
internal control over financial reporting. Accordingly, we express no such
opinion. An audit also includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. Our procedures included
confirmation of securities owned as of March 31, 2007, by correspondence with
the custodian and brokers. 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, 2007, the results of
their operations for the year then ended, and the changes in their net assets
and the financial highlights for each of the two years in the period then ended,
in conformity with accounting principles generally accepted in the United States
of America.
TAIT, WELLER & BAKER LLP
Philadelphia, Pennsylvania
May 18, 2007
- --------------------------------------------------------------------------------
PACIFIC CAPITAL
CASH ASSETS TRUST
STATEMENT OF INVESTMENTS
MARCH 31, 2007
PRINCIPAL
AMOUNT COMMERCIAL PAPER (65.9%) VALUE
- --------------- --------------------------------------------------------------------- -------------
Automotive (4.4%)
---------------------------------------------------------------------
$ 20,000,000 Toyota Motor Credit Corp., 5.21%, 06/27/07 .......................... $ 19,748,183
-------------
Banks (17.6%)
---------------------------------------------------------------------
20,000,000 Bank of America, 5.21%, 07/02/07 .................................... 19,733,711
20,000,000 Citigroup Global Markets Holdings, Inc., 5.21%, 05/17/07 ............ 19,866,856
20,000,000 Rabobank 5.24%, 04/24/07 ............................................ 19,933,108
20,000,000 Societe Generale N.A., Inc., 5.20%, 04/02/07 19,997,111
-------------
79,530,786
-------------
Borrowing Conduit (4.4%)
---------------------------------------------------------------------
20,000,000 Abbey National North America Corp., 5.24%, 04/12/07 ................. 19,967,978
-------------
Brokerage (8.8%)
---------------------------------------------------------------------
20,000,000 Bear Stearns & Co., 5.24%, 4/11/07 .................................. 19,970,889
20,000,000 Goldman Sachs Group, Inc., 5.18%, 06/18/07 ......................... 19,775,533
-------------
39,746,422
-------------
Conglomerate (4.4%)
---------------------------------------------------------------------
20,000,000 General Electric Capital Corp., 5.23%, 04/30/07 ..................... 19,915,739
-------------
Education (8.8%)
---------------------------------------------------------------------
20,000,000 Harvard University, 5.35%, 04/02/07 ................................. 19,997,028
20,000,000 Stanford University, 5.23%, 04/10/07 ................................ 19,973,850
-------------
39,970,878
-------------
Finance (13.1%)
---------------------------------------------------------------------
20,000,000 American General Finance Corp., 5.13%, 08/24/07 ..................... 19,586,347
20,000,000 Calyon NA, Inc., 5.23%, 04/23/07 .................................... 19,936,078
20,000,000 PACCAR Financial Corp., 5.22%, 05/15/07 ............................. 19,872,400
-------------
59,394,825
-------------
Insurance (4.4%)
---------------------------------------------------------------------
20,000,000 Prudential Funding, 5.17%, 05/03/07 ................................. 19,908,089
-------------
Total Commercial Paper 298,182,900
-------------
CERTIFICATES OF DEPOSIT (4.4%)
---------------------------------------------------------------------
20,000,000 Wells Fargo, 5.40%, 06/15/07 ........................................ 20,000,000
-------------
PRINCIPAL
AMOUNT REPURCHASE AGREEMENTS (29.8%) VALUE
- --------------- --------------------------------------------------------------------- -------------
Bank of America Securities
$ 70,000,000 5.33%, 04/02/07 ..................................................... $ 70,000,000
(Proceeds of $70,031,092 to be received at maturity, Collateral:
$70,220,000 Federal Home Loan Bank 4.75% due 12/09/11; the
collateral fair value plus interest receivable equals $71,259,236)
65,000,000 Morgan Stanley Dean Witter
5.30%, 04/02/07 ..................................................... 65,000,000
-------------
(Proceeds of $65,028,708 to be received at maturity, Collateral:
$64,345,000 US Treasury Note 5.00% due 10/13/11; the
collateral fair value plus interest receivable equals $66,135,864)
Total Repurchase Agreements ......................................... 135,000,000
-------------
SHARES INVESTMENT COMPANY (0.0%)
- --------------- --------------------------------------------------------------------- -------------
23,106 JP Morgan U.S. Government Money Market Fund, Capital Shares ......... 23,106
-------------
Total Investments (Amortized Cost $453,206,006*) ....... 100.1% 453,206,006
Other assets less liabilities .......................... (0.1)% (569,057)
----- -------------
NET ASSETS ............................................. 100.0% $ 452,636,949
===== =============
* Cost for Federal income tax and financial reporting purposes is identical.
PERCENT OF
PORTFOLIO DISTRIBUTION (UNAUDITED) PORTFOLIO
---------------------------------- ---------
Commercial Paper ............................. 65.8%
Certificates of Deposit ...................... 4.4
Repurchase Agreements ........................ 29.8
Investment Company ........................... 0.0
-------
100.0%
=======
See accompanying notes to financial statements.
PACIFIC CAPITAL
TAX-FREE CASH ASSETS TRUST
SCHEDULE OF INVESTMENTS
MARCH 31, 2007
RATING
PRINCIPAL MOODY'S/
AMOUNT MUNICIPAL SECURITIES (99.9%) S&P VALUE
- --------------- ------------------------------------------------------- ----------- --------------
ARIZONA (0.2%)
-------------------------------------------------------
Arizona State Municipal Financing Program COP, Series
15, ETM, Collateral: U.S. Government Securities
$ 450,000 8.750%, 08/01/07 ...................................... Aaa/AAA $ 457,353
--------------
COLORADO (1.6%)
-------------------------------------------------------
Colorado Housing & Finance Authority Revenue Bonds,
Class I, Series A-1, Weekly Reset VRDO*, SPA: FHLB
4,100,000 3.660%, 10/01/30 ...................................... VMIG1/A-1+ 4,100,000
--------------
FLORIDA (0.4%)
-------------------------------------------------------
West Palm Beach, FL Utilities System Revenue,
Prerefunded to 10/01/07 @101, Collateral: State &
Local Government Series, FGIC Insured
1,000,000 5.500%, 10/01/29 ...................................... Aaa/NR 1,019,422
--------------
HAWAII (29.6%)
-------------------------------------------------------
City and County Honolulu, HI, GO Bonds, Series A,
ETM, Collateral: U.S. Government Securities
2,870,000 5.600%, 04/01/07 ...................................... #Aaa/AA 2,870,000
City and County Honolulu, HI, GO Bonds, Series A,
ETM, Collateral: U.S. Government Securities,
FGIC Insured
1,165,000 6.000%, 09/01/07 ...................................... #Aaa/AAA 1,177,143
City and County Honolulu, HI, GO Commercial Paper,
Interest at Maturity Series H, LOC: Landesbank
Hessen-Thuringen Girozentrale (Heleba)
15,000,000 3.504%, 07/03/07 ...................................... P-1/A1+ 15,000,000
City and County Honolulu, HI, GO Commercial Paper,
Interest at Maturity, Series W, LOC -
Westdeutsche Landesbank
7,100,000 3.545%, 06/05/07 ...................................... P-1/A1+ 7,100,000
5,000,000 3.573%, 06/12/07 ...................................... P-1/A1+ 5,000,000
Hawaii State, GO Bonds, Series C, Refunding,
FSA Insured
250,000 5.125%, 02/01/08 ...................................... Aaa/AAA 253,080
RATING
PRINCIPAL MOODY'S/
AMOUNT MUNICIPAL SECURITIES (CONTINUED) S&P VALUE
- --------------- ------------------------------------------------------- ----------- --------------
HAWAII (continued)
-------------------------------------------------------
Hawaii State, GO Bonds, Series CV, FGIC Insured
$ 305,000 5.500%, 08/01/07 ...................................... Aaa/AAA $ 306,827
Hawaii State Department of Budget and Finance
Special Purpose Revenue Bonds (Hawaiian
Electric Company), AMT, Notified Call 05/01/07,
MBIA Insured
3,500,000 6.200%, 05/01/26 ...................................... Aaa/AAA 3,506,720
Hawaii State Department of Budget and Finance
Special Purpose Revenue Bonds (Queen's Health
Systems) Series A, Weekly Reset VRDO*, SPA:
Bank of Nova Scotia, AMBAC Insured
4,600,000 3.470%, 07/01/29 ...................................... VMIG1/A-1+ 4,600,000
Hawaii State Department of Budget and Finance
Special Purpose Revenue Bonds (Queens Health
Systems) Series C, Weekly Reset VRDO*, SPA:
Bank of America N.A., AMBAC Insured
36,335,000 3.500%, 07/01/28 ...................................... MIG1/AAA 36,335,000
Maui County, HI, GO Bonds, Series A, Prerefunded
to 09/01/07 @101, Collateral: U.S. Government
Securities, FGIC Insured
500,000 5.100%, 09/01/11 ...................................... Aaa/AAA 508,203
--------------
76,656,973
--------------
ILLINOIS (5.3%)
-------------------------------------------------------
Chicago, IL GO Bonds, Series B, Weekly Reset
VRDO*, SPA: Landesbank Baden-Wurttemberg,
FGIC Insured
6,000,000 3.680%, 01/01/37 ...................................... VMIG1/A-1+ 6,000,000
Chicago IL Housing Authority Capital Program
Revenue Bonds, ETM, Collateral: State & Local
Government Series, Prerefunded
2,185,000 5.000%, 07/01/07 ...................................... #Aaa/NR 2,192,706
RATING
PRINCIPAL MOODY'S/
AMOUNT MUNICIPAL SECURITIES (CONTINUED) S&P VALUE
- --------------- ------------------------------------------------------- ----------- --------------
ILLINOIS (continued)
-------------------------------------------------------
Chicago, IL Water Revenue Bonds, Prerefunded to
11/01/07 @102, Collateral: State & Local
Government Series, FGIC Insured
$ 600,000 5.250%, 11/01/23 ...................................... Aaa/AAA $ 617,172
Chicago, IL Water Revenue Refunding Bonds, Second
Lien, Weekly Reset, VRDO*, SPA - Dexia Credit
Local, MBIA Insured
5,000,000 3.650%, 11/01/31 ...................................... Aaa/AAA 5,000,000
--------------
13,809,878
--------------
INDIANA (1.0%)
-------------------------------------------------------
Duneland, IN Independent School Building Corp.
First Mortgage Revenue Bonds, Prerefunded to
08/01/07 @101, Collateral: U.S. Government
Securities, MBIA Insured
1,050,000 5.500%, 08/01/17 ...................................... Aaa/AAA 1,067,411
South Bend, IN Community School Corp. Riley
School Building Corp. First Mortgage Revenue
Bonds, Prerefunded to 08/01/07 @101, Collateral:
100% U.S. Treasury Obligations, FSA Insured
1,500,000 5.700%, 08/01/19 ...................................... Aaa/AAA 1,525,502
--------------
2,592,913
--------------
KENTUCKY (3.0%)
-------------------------------------------------------
Louisville & Jefferson County, KY Metropolitan Sewer
District Sewer & Drain System Revenue Bonds,
Series A, Weekly Reset, VRDO*, SPA - Bank One
Kentucky, FSA Insured
7,655,000 3.650%, 05/15/23 ...................................... Aaa/AAA 7,655,000
--------------
MARYLAND (0.4%)
-------------------------------------------------------
Montgomery County, MD, Public Improvement Series
GO Bonds, ETM, Prerefunded 05/01/07 @102,
Collateral: State & Local Government Series
1,085,000 5.375%, 05/01/13 ...................................... Aaa/AAA 1,108,070
--------------
RATING
PRINCIPAL MOODY'S/
AMOUNT MUNICIPAL SECURITIES (CONTINUED) S&P VALUE
- --------------- ------------------------------------------------------- ----------- --------------
MASSACHUSETTS (0.6%)
-------------------------------------------------------
Massachusetts State Health & Educational Facilities
Authority Revenue Bonds (Wellesley College),
Series G, Daily Reset, VRDO*
$ 1,550,000 3.680%, 07/01/39 ...................................... VMIG1/A-1+ $ 1,550,000
--------------
MICHIGAN (12.4%)
-------------------------------------------------------
Detroit, MI Sewer Disposal Revenue Bonds, Series A,
ETM, Prerefunded to 07/01/07 @101, Collateral:
State & Local Government Series, MBIA Insured
250,000 5.000%, 07/01/11 ...................................... Aaa/AAA 253,235
Detroit, MI Sewer Disposal Revenue Bonds, Series A,
Prerefunded to 07/01/07 @101, Collateral: U.S.
Government Securities, MBIA Insured
4,000,000 5.400%, 07/01/15 ...................................... Aaa/AAA 4,056,997
Eastern Michigan University, University Revenue
Bonds, Daily Reset VRDO*, FGIC Insured,
SPA: FGIC-SPI
8,700,000 3.790%, 06/01/27 ...................................... Aaa/A-1+ 8,700,000
Michigan Municipal Bond Authority Revenue Bonds,
State Revolving Fund, Prerefunded to 10/01/07
@101, Collateral: State & Local Government Series
1,000,000 5.250%, 10/01/15 ...................................... Aaa/AAA 1,018,046
Michigan State Building Authority Facilities
Program Revenue Bonds, Series II, Prerefunded
to 10/15/07 @101, Collateral: State & Local
Government Series
2,535,000 5.000%, 10/15/11 ...................................... Aa3/AA- 2,577,816
Northern Michigan University Revenue Bonds,
Daily Reset VRDO*, SPA: DEPFA Bank PLC,
AMBAC Insured
4,285,000 3.790%, 12/01/35 ...................................... Aaa/AAA 4,285,000
Northern Michigan University, Revenue Bonds,
Daily Reset VRDO*, SPA: FGIC-SPI, FGIC Insured
3,960,000 3.790%, 06/01/31 ...................................... VMIG1/A-1+ 3,960,000
RATING
PRINCIPAL MOODY'S/
AMOUNT MUNICIPAL SECURITIES (CONTINUED) S&P VALUE
- --------------- ------------------------------------------------------- ----------- --------------
MICHIGAN (continued)
-------------------------------------------------------
Rochester, MI, Community School District GO Bonds,
ETM, Prerefunded 05/01/07 @100, Collateral: State &
Local Government Securities, MBIA Insured
$ 7,315,000 5.250%, 05/01/15 ...................................... #Aaa/AAA $ 7,324,738
--------------
32,175,832
--------------
MISSOURI (13.8%)
-------------------------------------------------------
Curators University, MO System Facility Revenue
Bonds, Series A, Daily Reset, VRDO*
1,800,000 3.770%, 11/01/32 ...................................... VMIG1/A-1+ 1,800,000
Kansas City, MO Industrial Development Authority
Revenue Bonds, (Ewing Marion Kaufman
Foundation), Daily Reset VRDO*
8,360,000 3.790%, 04/01/27 ...................................... NR/A-1+ 8,360,000
650,000 3.790%, 04/01/27 ...................................... NR/A-1+ 650,000
Missouri State, Health & Educational Facilities Authority
Revenue Bonds (St. Louis University), Series B,
Daily Reset VRDO*, SPA: Bank of America N.A.
6,000,000 3.820%, 10/01/24 ...................................... VMIG1/A-1+ 6,000,000
Missouri State, Health & Educational Facilities Authority
Revenue Bonds (Washington University), Series B,
SPA: JPMorgan Chase Bank, Daily Reset VRDO*
4,800,000 3.770%, 03/01/40 ...................................... VMIG1/A-1+ 4,800,000
Missouri State, Health & Educational Facilities Authority
Revenue Bonds (Washington University), Series C,
Daily Reset VRDO*, SPA: JPMorgan Chase Bank
2,800,000 3.730%, 09/01/30 ...................................... VMIG1/A-1+ 2,800,000
Missouri State, Health & Educational Facilities Authority
Revenue Bonds (Washington University), Series D,
Daily Reset VRDO*, SPA: JPMorgan Chase Bank
2,100,000 3.730%, 09/01/30 ...................................... VMIG1/A-1+ 2,100,000
University of Missouri University System Facilities
Revenue Bonds, Series A, Daily Reset, VRDO*
3,770,000 3.770%, 11/01/31 ...................................... VMIG1/A-1+ 3,770,000
RATING
PRINCIPAL MOODY'S/
AMOUNT MUNICIPAL SECURITIES (CONTINUED) S&P VALUE
- --------------- ------------------------------------------------------- ----------- --------------
MISSOURI (continued)
-------------------------------------------------------
University of Missouri University System Facilities
Revenue Bonds, Series B, Daily Reset VRDO*
$ 5,350,000 3.770%, 11/01/30 ...................................... VMIG1/A-1+ $ 5,350,000
--------------
35,630,000
--------------
MONTANA (2.4%)
-------------------------------------------------------
Montana State, Health Facilities Authority Revenue
Bonds, Series A, Weekly Reset VRDO*, SPA:
Wells Fargo, FGIC Insured
6,355,000 3.680%, 12/01/15 ...................................... VMIG1/A-1+ 6,355,000
--------------
NEBRASKA (0.4%)
-------------------------------------------------------
Nebraska Public Power District Revenue Bonds,
Prerefunded 2005, Series A, Prerefunded to
01/01/08 @101, Collateral: U.S. Treasury
Obligations, MBIA Insured
910,000 5.250%, 01/01/11 ...................................... Aaa/AAA 929,778
--------------
NEVADA (3.8%)
-------------------------------------------------------
Clark County, NV Airport Revenue Bonds, Series C,
Weekly Reset VRDO*, SPA: Landesbank Baden-
Wurttemberg, FGIC Insured
8,800,000 3.660%, 07/01/29 ...................................... VMIG1/A-1+ 8,800,000
Clark County, NV School District Building and
Renovation GO Bonds, Series B, Prerefunded to
06/15/07 @ 101, Collateral: U.S. Government
Securities, FGIC Insured
1,000,000 5.250%, 06/15/17 ...................................... Aaa/AAA 1,013,483
--------------
9,813,483
--------------
NEW YORK (6.3%)
-------------------------------------------------------
Long Island, NY Power Authority Revenue Bonds,
Series 1A, Weekly Reset VRDO*, LOC: 80%
Bayerische Landesbank; 20% Landesbank
Baden-Wurttemberg
9,000,000 3.650%, 05/01/33 ...................................... VMIG1/A-1+ 9,000,000
RATING
PRINCIPAL MOODY'S/
AMOUNT MUNICIPAL SECURITIES (CONTINUED) S&P VALUE
- --------------- ------------------------------------------------------- ----------- --------------
NEW YORK (continued)
-------------------------------------------------------
New York, NY City Transitional Finance Authority
Revenue Bonds, Series 3, Daily Reset VRDO*,
SPA: Royal Bank of Canada
$ 3,900,000 3.750%, 11/01/22 ...................................... VMIG1/A-1+ $ 3,900,000
New York, NY Municipal Water Financing Authority
Water & Sewer System Revenue Bonds, Series B,
Prerefunded to 06/15/07 @ 101, Collateral: U.S.
Government Securities, FSA Insured
3,500,000 5.750%, 06/15/29 ...................................... Aaa/AAA 3,550,577
--------------
16,450,577
--------------
NORTH CAROLINA (9.7%)
-------------------------------------------------------
Charlotte, NC Airport Revenue Bonds, Series A,
Weekly Reset VRDO*, SPA: JPMorgan Chase
Bank, MBIA Insured
9,120,000 3.650%, 07/01/16 ...................................... VMIG1/A-1+ 9,120,000
Concord, NC Utility Systems Revenue Bonds, Series
B, Weekly Reset VRDO*, SPA: Wachovia Bank,
FSA Insured
8,820,000 3.650%, 12/01/22 ...................................... VMIG1/NR 8,820,000
Durham, NC, Public Improvement Project GO
Bonds, Weekly Reset VRDO*, SPA: Wachovia
Bank of North Carolina
1,425,000 3.670%, 02/01/09 ...................................... VMIG1/A-1+ 1,425,000
2,975,000 3.670%, 02/01/11 ...................................... VMIG1/A-1+ 2,975,000
1,270,000 3.670%, 02/01/12 ...................................... VMIG1/A-1+ 1,270,000
1,475,000 3.670%, 02/01/13 ...................................... VMIG1/A-1+ 1,475,000
--------------
25,085,000
--------------
OHIO (0.9%)
-------------------------------------------------------
Ohio Housing Finance Agency Mortgage Revenue
Bonds (Residential Mortgage), Series E, AMT,
Weekly Reset VRDO*, SPA: FHLB
2,335,000 3.700%, 09/01/34 ...................................... VMIG1/NR 2,335,000
--------------
RATING
PRINCIPAL MOODY'S/
AMOUNT MUNICIPAL SECURITIES (CONTINUED) S&P VALUE
- --------------- ------------------------------------------------------- ----------- --------------
OREGON (0.4%)
-------------------------------------------------------
Josephine County, OR School District #007 GO Bonds,
ETM, Prerefunded 06/01/07 @100, Collateral: U.S.
Government Securities, FGIC Insured
$ 1,000,000 5.700%, 06/01/13 ...................................... Aaa/AAA $ 1,003,593
--------------
PENNSYLVANIA (0.8%)
-------------------------------------------------------
Philadelphia, PA Hospitals & Higher Education Facilities
Authority Hospital Revenue Bonds, Children's
Hospital Project, Series A, Daily Reset, VRDO*,
SPA - JPMorgan Chase Bank
800,000 3.760%, 02/15/14 ...................................... VMIG1/A-1+ 800,000
Pittsburgh, PA, GO Bonds, Series B, ETM, Collateral:
State & Local Government Series 100%, MBIA Insured
1,380,000 5.000%, 09/01/07 ...................................... Aaa/AAA 1,387,966
--------------
2,187,966
--------------
UTAH (0.4%)
-------------------------------------------------------
Utah State GO Bonds, Prerefunded to 07/01/07
@100, Collateral: State & Local Government Series
1,000,000 5.000%, 07/01/12 ...................................... Aaa/AAA 1,003,670
--------------
VIRGINIA (2.6%)
-------------------------------------------------------
University of Virginia Revenue Bonds, Series A,
Weekly Reset VRDO*
6,700,000 3.630%, 06/01/34 ...................................... VMIG1/A-1+ 6,700,000
--------------
WASHINGTON (0.6%)
-------------------------------------------------------
Seattle, WA, GO Bonds, Prerefunded to 08/01/07 @100,
Collateral: 100% State & Local Government Series
1,545,000 5.300%, 08/01/17 ...................................... Aa1/AAA 1,554,148
--------------
PUERTO RICO (3.3%)
-------------------------------------------------------
Puerto Rico Commonwealth Infrastructure Financing
Authority Revenue Bonds, Series A, Prerefunded
to 01/01/08 @101, Collateral: U.S. Government
Agencies 98%; U.S. Treasury Obligations 2%,
AMBAC Insured
8,300,000 5.000%, 07/01/28 ...................................... Aaa/AAA 8,471,298
--------------
Total Municipal Securities 258,644,954
--------------
SHARES INVESTMENT COMPANY (1.2%) VALUE
- --------------- ------------------------------------------------------- --------------
3,092,339 Goldman Sachs Financial Square Tax-Free Money
Market Fund Institutional Shares ................... $ 3,092,339
--------------
Total Investments (Amortized Cost $261,737,293**) ..... 101.1% 261,737,293
Other assets less liabilities ......................... (1.1) (2,778,792)
------ --------------
NET ASSETS ............................................ 100.0% $ 258,958,501
====== ==============
* 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.
** Cost for Federal income tax and financial reporting purposes is identical.
PORTFOLIO DISTRIBUTION (UNAUDITED)
PERCENTAGE
OF PORTFOLIO
------------
Arizona 0.2%
Colorado 1.6
Florida 0.4
Hawaii 29.3
Illinois 5.3
Indiana 1.0
Investment Company 1.2
Kentucky 2.9
Maryland 0.4
Massachusetts 0.6%
Michigan 12.3
Missouri 13.6
Montana 2.4
Nebraska 0.3
Nevada 3.7
New York 6.3
North Carolina 9.6
Ohio 0.9
Oregon 0.4%
Pennsylvania 0.8
Puerto Rico 3.2
Utah 0.4
Virginia 2.6
Washington 0.6
------
100.0%
======
PORTFOLIO ABBREVIATIONS:
------------------------
AMBAC - American Municipal Bond Assurance Corp.
AMT - Alternative Minimum Tax
COP - Certificates of Participation
ETM - Escrowed to Maturity
FGIC - Financial Guaranty Insurance Corporation
FHLB - Federal Home Loan Bank
FSA - Financial Security Assurance
GO - General Obligation
LOC - Letter of Credit
MBIA - Municipal Bond Investors Assurance
NR - Not Rated
SPA - Standby Bond Purchase Agreement
SPI - Securities Purchase, Inc.
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, 2007
PRINCIPAL
AMOUNT SECURITY DESCRIPTION VALUE
- --------------- --------------------------------------------------------------------- --------------
U.S. GOVERNMENT AGENCIES (100.1%)
---------------------------------------------------------------------
Federal Farm Credit Bank (9.9%)
---------------------------------------------------------------------
$ 25,000,000 5.16%, 04/03/07 ..................................................... $ 24,992,833
25,000,000 5.15%, 04/05/07 ..................................................... 24,985,694
30,015,000 5.15%, 05/04/07 ..................................................... 29,873,304
95,000,000 5.14%, 05/21/07 ..................................................... 94,321,806
--------------
174,173,637
--------------
Federal Home Loan Bank (90.2%)
---------------------------------------------------------------------
275,000,000 5.00%, 04/02/07 ..................................................... 274,961,806
23,000,000 5.12%, 04/04/07 ..................................................... 22,990,177
118,000,000 5.17%, 04/09/07 ..................................................... 117,864,300
90,000,000 5.15%, 04/11/07 ..................................................... 89,871,375
146,000,000 5.15%, 04/13/07 ..................................................... 145,749,590
90,000,000 5.13%, 04/18/07 ..................................................... 89,781,975
111,544,000 5.15%, 04/20/07 ..................................................... 111,240,884
95,000,000 5.18%, 04/27/07 ..................................................... 94,644,594
147,000,000 5.16%, 05/02/07 ..................................................... 146,346,830
97,491,000 5.14%, 05/16/07 ..................................................... 96,864,011
78,000,000 5.15%, 05/18/07 ..................................................... 77,476,068
127,178,000 5.15%, 05/23/07 ..................................................... 126,232,856
149,390,000 5.15%, 05/25/07 ..................................................... 148,235,206
29,000,000 5.13%, 06/22/07 ..................................................... 28,661,135
21,000,000 5.13%, 06/27/07 ..................................................... 20,739,653
--------------
1,591,660,460
--------------
Total U.S. Government Agencies ................................... 1,765,834,097
--------------
SHARES INVESTMENT COMPANY (0.1%)
- --------------- --------------------------------------------------------------------- --------------
2,015,284 JP Morgan U.S. Government Money Market Fund, Capital Shares ......... 2,015,284
--------------
Total Investments (Amortized Cost $1,767,849,381*) .... 100.2% 1,767,849,381
Other assets less liabilities ......................... (0.2) (3,648,009)
------ --------------
NET ASSETS ............................................ 100.0% $1,764,201,372
====== ==============
* Cost for Federal income tax and financial reporting purposes is identical.
PERCENT OF
PORTFOLIO DISTRIBUTION (UNAUDITED) PORTFOLIO
---------------------------------- ---------
U.S. Government Agencies 99.9%
Investment Company 0.1
------
100.0%
======
See accompanying notes to financial statements.
THE PACIFIC CAPITAL FUNDS
OF CASH ASSETS TRUST
STATEMENTS OF ASSETS AND LIABILITIES
MARCH 31, 2007
CASH TAX-FREE GOVERNMENT
FUND FUND FUND
--------------- --------------- ---------------
ASSETS:
Investments at value and amortized cost (note 2) ........ $ 318,206,006 $ 261,737,293 $ 1,767,849,381
Repurchase agreements (note 2) .......................... 135,000,000 -- --
Cash .................................................... -- 7,170 --
Interest receivable ..................................... 914,303 1,840,069 8,045
Other assets ............................................ 16,762 7,160 43,080
--------------- --------------- ---------------
Total Assets ......................................... 454,137,071 263,591,692 1,767,900,506
--------------- --------------- ---------------
LIABILITIES:
Payable for investment securities purchased ............. -- 4,040,889 --
Dividends payable ....................................... 1,157,961 440,394 2,841,364
Adviser and Administrator fees payable .................. 202,967 87,144 583,003
Distribution fees payable ............................... 41,012 19,436 216,262
Accrued expenses ........................................ 98,182 45,328 58,505
--------------- --------------- ---------------
Total Liabilities .................................... 1,500,122 4,633,191 3,699,134
--------------- --------------- ---------------
NET ASSETS .............................................. $ 452,636,949 $ 258,958,501 $ 1,764,201,372
=============== =============== ===============
NET ASSETS CONSIST OF:
Capital Stock - Authorized an unlimited number of shares,
par value $0.01 per share ............................ $ 4,526,226 $ 2,589,734 $ 17,641,311
Additional paid-in capital .............................. 448,109,543 256,385,878 1,746,558,190
Distributions in excess of net investment income ........ -- (17,111) --
Accumulated net realized gain (loss) on investments ..... 1,180 -- 1,871
--------------- --------------- ---------------
$ 452,636,949 $ 258,958,501 $ 1,764,201,372
=============== =============== ===============
SHARES OF BENEFICIAL INTEREST:
Original Shares Class:
Net Assets ........................................... $ 287,048,739 $ 170,609,483 $ 685,330,056
=============== =============== ===============
Shares outstanding ................................... 287,266,865 170,619,507 685,300,260
=============== =============== ===============
Net asset value per share ............................ $ 1.00 $ 1.00 $ 1.00
=============== =============== ===============
Service Shares Class:
Net Assets ........................................... $ 165,588,210 $ 88,349,018 $ 1,078,871,316
=============== =============== ===============
Shares outstanding ................................... 165,355,694 88,353,922 1,078,830,840
=============== =============== ===============
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
YEAR ENDED MARCH 31, 2007
CASH TAX-FREE GOVERNMENT
FUND FUND FUND
------------ ------------ ------------
INVESTMENT INCOME:
Interest income .................................. $ 24,950,093 $ 7,659,158 $ 70,381,247
------------ ------------ ------------
EXPENSES:
Investment Advis er fees (note 3) ................ 1,728,112 658,852 4,470,519
Administrator fees (note 3) ...................... 659,224 208,845 991,924
Distribution fees (note 3) ....................... 447,519 196,556 2,228,626
Trustees' fees and expenses ...................... 93,103 59,219 174,730
Insurance ........................................ 47,672 19,881 115,573
Legal fees (note 3) .............................. 44,969 29,548 61,780
Registration fees and dues ....................... 38,355 20,909 49,376
Fund accounting fees ............................. 31,320 31,532 32,472
Shareholders' reports ............................ 30,090 6,282 20,205
Custodian fees ................................... 15,773 15,305 29,229
Auditing and tax fees ............................ 14,500 14,500 14,500
Transfer and shareholder servicing agent fees .... 13,284 12,816 12,468
Chief Compliance Officer (note 3) ................ 4,544 4,544 4,544
Miscellaneous .................................... 14,472 10,871 39,945
------------ ------------ ------------
Total expenses ................................... 3,182,937 1,289,660 8,245,891
Fund accounting fees waived ...................... -- (15,654) --
Expenses paid indirectly (note 5) ................ (2,924) (4,644) (10,358)
------------ ------------ ------------
Net expenses ........................................ 3,180,013 1,269,362 8,235,533
------------ ------------ ------------
Net investment income ............................... 21,770,080 6,389,796 62,145,714
Net realized gain (loss) from securities transactions -- 237 340
------------ ------------ ------------
Net change in net assets resulting from operations .. $ 21,770,080 $ 6,390,033 $ 62,146,054
============ ============ ============
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, 2007 March 31, 2006 March 31, 2007 March 31, 2006
--------------- --------------- --------------- ---------------
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income ................ $ 21,770,080 $ 14,580,671 $ 6,389,796 $ 4,482,897
Net realized gain (loss)
from securities transactions ....... -- 1,180 237 10,100
--------------- --------------- --------------- ---------------
Net change in net assets
resulting from operations .......... 21,770,080 14,581,851 6,390,033 4,492,997
--------------- --------------- --------------- ---------------
DIVIDENDS TO SHAREHOLDERS
FROM NET INVESTMENT INCOME:
Original Shares .................... (13,877,905) (9,721,572) (4,219,673) (2,778,805)
Service Shares ..................... (7,892,175) (4,859,099) (2,197,571) (1,704,092)
--------------- --------------- --------------- ---------------
Total dividends to shareholders
from net investment income ....... (21,770,080) (14,580,671) (6,417,244) (4,482,897)
--------------- --------------- --------------- ---------------
CAPITAL SHARE TRANSACTIONS
(at $1.00 per share):
Proceeds from shares sold:
Original Shares ...................... 729,865,243 772,407,051 230,204,313 223,627,397
Service Shares ....................... 633,141,409 498,998,950 130,614,157 165,033,651
--------------- --------------- --------------- ---------------
1,363,006,652 1,271,406,001 360,818,470 388,661,048
--------------- --------------- --------------- ---------------
Reinvested dividends:
Original Shares ...................... 307,349 217,287 45,489 91,298
Service Shares ....................... 7,891,836 4,773,677 2,197,555 1,695,763
--------------- --------------- --------------- ---------------
8,199,185 4,990,964 2,243,044 1,787,061
--------------- --------------- --------------- ---------------
Cost of shares redeemed:
Original Shares ...................... (728,327,507) (853,144,228) (192,184,780) (225,091,397)
Service Shares ....................... (645,130,780) (500,085,192) (137,479,845) (145,858,384)
--------------- --------------- --------------- ---------------
(1,373,458,287) (1,353,229,420) (329,664,625) (370,949,781)
--------------- --------------- --------------- ---------------
Change in net assets
from capital share transactions ...... (2,252,450) (76,832,455) 33,396,889 19,498,328
--------------- --------------- --------------- ---------------
Total change in net assets ........... (2,252,450) (76,831,275) 33,369,678 19,508,428
NET ASSETS:
Beginning of period .................. 454,889,399 531,720,674 225,588,823 206,080,395
--------------- --------------- --------------- ---------------
End of period* ....................... $ 452,636,949 $ 454,889,399 $ 258,958,501 $ 225,588,823
=============== =============== =============== ===============
*Includes undistributed (distributions
in excess of) net investment income of: $ -- $ -- $ (17,111) $ --
=============== =============== =============== ===============
GOVERNMENT FUND
----------------------------------
Year Ended Year Ended
March 31, 2007 March 31, 2006
--------------- ---------------
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income ................ $ 62,145,714 $ 33,279,020
Net realized gain (loss)
from securities transactions ....... 340 2,274
--------------- ---------------
Net change in net assets
resulting from operations .......... 62,146,054 33,281,294
--------------- ---------------
DIVIDENDS TO SHAREHOLDERS
FROM NET INVESTMENT INCOME:
Original Shares .................... (22,368,853) (12,231,234)
Service Shares ..................... (39,776,861) (21,047,786)
--------------- ---------------
Total dividends to shareholders
from net investment income ....... (62,145,714) (33,279,020)
--------------- ---------------
CAPITAL SHARE TRANSACTIONS
(at $1.00 per share):
Proceeds from shares sold:
Original Shares ...................... 1,604,790,944 892,335,436
Service Shares ....................... 3,243,154,899 3,155,652,101
--------------- ---------------
4,847,945,843 4,047,987,537
--------------- ---------------
Reinvested dividends:
Original Shares ...................... 175,409 139,115
Service Shares ....................... 39,776,852 21,010,927
--------------- ---------------
39,952,261 21,150,042
--------------- ---------------
Cost of shares redeemed:
Original Shares ...................... (1,349,057,009) (817,340,270)
Service Shares ....................... (3,091,306,685) (2,867,454,460)
--------------- ---------------
(4,440,363,694) (3,684,794,730)
--------------- ---------------
Change in net assets
from capital share transactions ...... 447,534,410 384,342,849
--------------- ---------------
Total change in net assets ........... 447,534,750 384,345,123
NET ASSETS:
Beginning of period .................. 1,316,666,622 932,321,499
--------------- ---------------
End of period* ....................... $ 1,764,201,372 $ 1,316,666,622
=============== ===============
*Includes undistributed (distributions
in excess of) net investment income of: $ -- $ --
=============== ===============
See accompanying notes to financial statements.
THE PACIFIC CAPITAL FUNDS
OF CASH ASSETS TRUST
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2007
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 accounting principles generally accepted in the United States of
America.
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 Fund's 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 accounting principles generally accepted in the United States of
America requires management to make estimates and assumptions that affect
the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements
and the reported amounts of increases and decreases in net assets from
operations during the reporting period. Actual results could differ from
those estimates.
h) RECLASSIFICATION OF CAPITAL ACCOUNTS: Accounting principles generally
accepted in the United States of America require that certain components
of net assets relating to permanent differences be reclassified between
financial and tax reporting. These reclassifications have no effect on net
assets or net asset value per share. On March 31, 2007, a reclassification
was made to increase (decrease) undistributed net investment income
(distributions in excess of net investment income) and accumulated net
realized gain (loss) on investments for the Funds as follows:
Tax-Free Government
Cash Fund Fund Fund
--------- ---- ----
Accumulated net realized gain (loss)
on investements .................. $ -- $ (10,337) $ --
Undistributed net investment income......... -- 10,337 --
These reclassifications are primarily due to dividend redesignations. Net
assets were not affected by these changes.
i) NEW ACCOUNTING PRONOUNCEMENTS: In July 2006, the Financial Accounting
Standards Board ("FASB") released FASB Interpretation No. 48 "Accounting
for Uncertainty in Income Taxes" ("FIN 48"). FIN 48 provides guidance for
how uncertain tax positions should be recognized, measured, presented and
disclosed in the financial statements. FIN 48 requires the evaluation of
tax positions taken or expected to be taken in the course of preparing the
Trust's tax returns to determine whether the tax positions are
"more-likely-than-not" of being sustained by the applicable tax authority.
Tax positions not deemed to meet the more-likely-than-not threshold would
be recorded as a tax benefit or expense in the current year. Adoption of
FIN 48 is required to be implemented no later than September 30, 2007 and
is to be applied to all open tax years as of that date. At this time,
management does not believe the adoption of FIN 48 will result in any
material impact on the Trust's financial statements.
In September 2006, FASB issued FASB Statement No. 157, "Fair Value
Measurement" ("SFAS 157"), which defines fair value, establishes a
framework for measuring fair value, and expands disclosures about fair
value measurements. SFAS 157 is effective for fiscal years beginning after
November 15, 2007, and interim periods within those fiscal years. The
Trust believes adoption of SFAS 157 will have no material impact on the
Trust's financial statements.
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 Administration Agreements with
the Funds. 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 Trust. 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. No such reduction in fees was required for the year ended March 31,
2007.
Under a 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 Distribution Agreements, Aquila Distributors, Inc. (the
"Distributor") serves as the exclusive distributor of each Fund's 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, 2007, the following amounts were incurred for
legal fees allocable to Hollyer Brady Barrett & Hines LLP, counsel to the Trust,
for legal services in conjunction with the respective Fund's ongoing operations:
Cash Fund $43,585; Tax-Free Fund $28,148; Government Fund $58,030. The Secretary
of the Trust is a Partner at that firm.
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.
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 fiscal 2007 and 2006 were as
follows:
Cash Fund Tax-Free Fund Government Fund
-------------------------- -------------------------- --------------------------
2007 2006 2007 2006 2007 2006
----------- ----------- ----------- ----------- ----------- -----------
Ordinary income ..... $21,537,828 $14,497,718 $ 10,100 $ -- $60,709,774 $33,395,289
Net tax-exempt income -- -- 6,253,366 4,452,274 -- --
Capital gain ........ -- -- -- -- -- --
----------- ----------- ----------- ----------- ----------- -----------
Total ............... $21,537,828 $14,497,718 $ 6,263,466 $ 4,452,274 $60,709,744 $33,395,289
=========== =========== =========== =========== =========== ===========
As of March 31, 2007, the components of distributable earnings on a tax
basis were as follows:
Tax-Free Government
Cash Fund Fund Fund
---------- ---------- ----------
Undistributed ordinary income ........ $1,159,141 $ 237 $2,843,235
Undistributed tax exempt income ...... -- 423,046 --
Accumulated net realized loss
on investments ................... -- -- --
---------- ---------- ----------
$1,159,141 $ 423,283 $2,843,235
========== ========== ==========
PACIFIC CAPITAL
CASH ASSETS TRUST
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
ORIGINAL SHARES
----------------------------------------------------------------
Year Ended March 31,
----------------------------------------------------------------
2007 2006 2005 2004 2003
-------- -------- -------- -------- --------
Net asset value, beginning of period .... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- -------- --------
Income from investment operations:
Net investment income+ ................ 0.05 0.03 0.01 0.01 0.01
-------- -------- -------- -------- --------
Less distributions:
Dividends from net investment income .. (0.05) (0.03) (0.01) (0.01) (0.01)
-------- -------- -------- -------- --------
Net asset value, end of period .......... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ======== ========
Total return ............................ 4.75% 3.20% 1.36% 0.90% 1.35%
Ratios/supplemental data
Net assets, end of period (in millions) $ 287 $ 286 $ 366 $ 287 $ 361
Ratio of expenses to average net assets 0.57% 0.58% 0.37% 0.21% 0.36%
Ratio of net investment income to
average net assets .................. 4.65% 3.09% 1.39% 0.90% 1.34%
The expense and net investment income ratios without the effect of the Adviser's and Administrator's
contractual caps 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 0.57% 0.58% 0.37%* 0.21%* 0.36%*
SERVICE SHARES
----------------------------------------------------------------
Year Ended March 31,
----------------------------------------------------------------
2007 2006 2005 2004 2003
-------- -------- -------- -------- --------
Net asset value, beginning of period .... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- -------- --------
Income from investment operations:
Net investment income+ ................ 0.04 0.03 0.01 0.01 0.01
-------- -------- -------- -------- --------
Less distributions:
Dividends from net investment income .. (0.04) (0.03) (0.01) (0.01) (0.01)
-------- -------- -------- -------- --------
Net asset value, end of period .......... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ======== ========
Total return ............................ 4.49% 2.94% 1.11% 0.65% 1.09%
Ratios/supplemental data
Net assets, end of period (in millions) $ 166 $ 169 $ 166 $ 119 $ 123
Ratio of expenses to average net assets 0.82% 0.83% 0.61% 0.46% 0.61%
Ratio of net investment income to
average net assets .................. 4.40% 2.91% 1.12% 0.65% 1.10%
The expense and net investment income ratios without the effect of the Adviser's and Administrator's
contractual caps 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 0.82% 0.83% 0.61%* 0.46%* 0.61%*
- ----------
+ Per share amounts have been calculated using the monthly average shares
method.
++ No reduction in the Adviser's and the Administrator's fees was required
during the period.
* Net of contractual caps on fees.
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,
----------------------------------------------------------------
2007 2006 2005 2004 2003
-------- -------- -------- -------- --------
Net asset value, beginning of period .... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- -------- --------
Income from investment operations:
Net investment income+ ................. . 0.03 0.02 0.01 0.01 0.01
-------- -------- -------- -------- --------
Less distributions:
Dividends from net investment income ... . (0.03) (0.02) (0.01) (0.01) (0.01)
-------- -------- -------- -------- --------
Net asset value, end of period .......... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ======== ========
Total return ............................ 3.09% 2.21% 1.16% 0.84% 1.15%
Ratios/supplemental data
Net assets, end of period (in millions) $ 171 $ 133 $ 134 $ 99 $ 130
Ratio of expenses to average net assets 0.50% 0.50% 0.29% 0.17% 0.28%
Ratio of net investment income to
average net assets .................. 3.04% 2.20% 1.17% 0.84% 1.13%
The expense and net investment income ratios without the effect of the Adviser's and Administrator's
contractual caps 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 . . 0.49% 0.50% 0.28%* 0.17%* 0.27%*
SERVICE SHARES
----------------------------------------------------------------
Year Ended March 31,
----------------------------------------------------------------
2007 2006 2005 2004 2003
-------- -------- -------- -------- --------
Net asset value, beginning of period .... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- -------- --------
Income from investment operations:
Net investment income+ ................. . 0.03 0.02 0.01 0.01 0.01
-------- -------- -------- -------- --------
Less distributions:
Dividends from net investment income ... . (0.03) (0.02) (0.01) (0.01) (0.01)
-------- -------- -------- -------- --------
Net asset value, end of period .......... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ======== ========
Total return ............................ 2.83% 1.96% 0.90% 0.59% 0.90%
Ratios/supplemental data
Net assets, end of period (in millions) $ 88 $ 93 $ 72 $ 50 $ 56
Ratio of expenses to average net assets 0.75% 0.75% 0.53% 0.42% 0.53%
Ratio of net investment income to
average net assets .................. 2.78% 1.94% 0.92% 0.59% 0.89%
The expense and net investment income ratios without the effect of the Adviser's and Administrator's
contractual caps 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 . . 0.75% 0.75% 0.53%* 0.42%* 0.52%*
- ----------
+ Per share amounts have been calculated using the monthly average shares
method.
++ No reduction in the Adviser's and the Administrator's fees was required
during the period.
* Net of Contractual caps on fees.
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,
----------------------------------------------------------------
2007 2006 2005 2004 2003
-------- -------- -------- -------- --------
Net asset value, beginning of period .... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- -------- --------
Income from investment operations:
Net investment income+ ................ 0.05 0.03 0.01 0.01 0.01
-------- -------- -------- -------- --------
Less distributions:
Dividends from net investment income .. (0.05) (0.03) (0.01) (0.01) (0.01)
-------- -------- -------- -------- --------
Net asset value, end of period .......... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ======== ========
Total return ............................ 4.80% 3.25% 1.41% 0.96% 1.34%
Ratios/supplemental data
Net assets, end of period (in millions) $ 685 $ 429 $ 354 $ 263 $ 270
Ratio of expenses to average net assets 0.44% 0.45% 0.27% 0.11% 0.25%
Ratio of net investment income to
average net assets .................. 4.72% 3.25% 1.42% 0.96% 1.34%
The expense and net investment income ratios without the effect of the Adviser's and Administrator's
contractual caps 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 0.44% 0.45% 0.27%* 0.11%* 0.24%*
SERVICE SHARES
----------------------------------------------------------------
Year Ended March 31,
----------------------------------------------------------------
2007 2006 2005 2004 2003
-------- -------- -------- -------- --------
Net asset value, beginning of period .... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- -------- --------
Income from investment operations:
Net investment income+ ................ 0.04 0.03 0.01 0.01 0.01
-------- -------- -------- -------- --------
Less distributions:
Dividends from net investment income .. (0.04) (0.03) (0.01) (0.01) (0.01)
-------- -------- -------- -------- --------
Net asset value, end of period .......... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ======== ========
Total return ............................ 4.54% 3.00% 1.16% 0.71% 1.09%
Ratios/supplemental data
Net assets, end of period (in millions) $ 1,079 $ 887 $ 578 $ 575 $ 448
Ratio of expenses to average net assets 0.69% 0.70% 0.52% 0.36% 0.49%
Ratio of net investment income to
average net assets .................. 4.46% 3.02% 1.16% 0.71% 1.08%
The expense and net investment income ratios without the effect of the Adviser's and Administrator's
contractual caps 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 0.69% 0.70% 0.52%* 0.36%* 0.49%*
- ----------
+ Per share amounts have been calculated using the monthly average shares
method.
++ No reduction in the Adviser's and the Administrator's fees was required
during the period.
* Net of contractual caps on fees.
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(4) DURING PAST 5 YEARS BY TRUSTEE INDICATED OTHERWISE.)
- ----------------- ---------- ------------------- ---------- ---------------------
INTERESTED TRUSTEE(6)
- ---------------------
Diana P. Herrmann Trustee since 2004, Vice Chair and Chief Executive Officer 12 ICI Mutual Insurance
New York, NY President since 1998 of Aquila Management Corporation, Company
(02/25/58) and Vice Chair since Founder of the Aquila Group of
2003 Funds(SM)(7) and parent of Aquila
Investment Management LLC,
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;
Chair, Vice Chair, President, Executive
Vice President or Senior Vice President
of funds in the Aquila Group of Funds(SM)
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 and head of its Small Funds
Committee since 2004; active in
charitable and volunteer organizations.
NON-INTERESTED TRUSTEES
- -----------------------
Theodore T. Mason Chair of the Board Executive Director, East Wind Power 8 Trustee, Premier VIT.
New York, NY of Trustees since Partners LTD since 1994 and Louisiana
(11/24/35) 2004 and Trustee Power Partners, 1999-2003; Treasurer,
since 1984 Alumni Association of SUNY Maritime
College since 2004 (President,
2002-2003, First Vice 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.
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(4) DURING PAST 5 YEARS BY TRUSTEE INDICATED OTHERWISE.)
- ----------------- ---------- ------------------- ---------- ---------------------
Thomas W. Courtney Trustee since 1984 President, Courtney Associates, Inc., a 5 Chairman of the Board
Sewickley, PA 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 Premier VIT.
Stanley W. Hong Trustee since 1993 President, Waste Management of Hawaii, 4 Trustee, Pacific
Honolulu, HI Inc. and Corporate Vice President - Capital Funds, which
(04/05/36) Hawaii Area for Waste Management, Inc., includes 11 bond and
2001-2005; Trustee, The King William stock funds; First
Charles Lunalilo Trust Estate since Insurance Co. of
2001; President and Chief Executive Hawaii, Ltd., Lanihau
Officer, The Chamber of Commerce of Properties, Ltd., The
Hawaii, 1996-2001; Director PBS - Hawaii Westye Group - West
Foundation since 1998; Regent, Chaminade (Hawaii), Inc.
University of Honolulu since 1991;
Trustee, Heald College since 1998;
Trustee, the Nature Conservancy of
Hawaii since 1998; Trustee, Child and
Family Service since 2005; Director, The
East West Center Foundation since 2006;
and a director of other corporate and
community organizations.
Russell K. Okata Trustee since 1993 Executive Director, Hawaii Government 4 Trustee, Pacific
Honolulu, HI 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 (insurance).
and charitable organizations.
Douglas Philpotts Trustee since 1992 Retired; formerly director, Chairman of 4 Trustee, Pacific
Honolulu, HI the Board and President of Hawaiian Capital Funds, which
(11/21/31) Trust Company, Limited, a predecessor of includes 11 bond and
The Asset Management Group of Bank of stock funds.
Hawaii; present or former director of
various Hawaii-based civic and
charitable organizations.
Oswald K. Stender Trustee since 1993 Director, Hawaiian Electric Industries, 4 Trustee, Pacific
Honolulu, HI 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 stock funds; director,
of Hawaiian Affairs and a member or Grace Pacific
trustee of several community Corporation, an asphalt
organizations. paving company, ACE
Trucking Inc. and
Hawaiian Telecom, a
telephone company
(communications).
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(4) DURING PAST 5 YEARS BY TRUSTEE INDICATED OTHERWISE.)
- ----------------- ---------- ------------------- ---------- ---------------------
OTHER INDIVIDUALS
CHAIRMAN EMERITUS(8)
- --------------------
Lacy B. Herrmann Founder, Chairman Founder and Chairman of the Board, N/A N/A
New York, NY Emeritus since 2004, Aquila Management Corporation, the
(05/12/29) Trustee, 1984-2004, sponsoring organization and parent of
and Chairman of the the Manager or Administrator and/or
Board of Trustees, Adviser or Sub-Adviser to each fund of
1984-2003 the Aquila Group of Funds(SM); Chairman of
the Manager or Administrator and/or
Adviser or Sub-Adviser to each since
2004; Founder and Chairman Emeritus of
each fund in the Aquila Group of
Funds(SM); previously Chairman and a
Trustee of each fund in the Aquila Group
of Funds(SM) 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 since 2003 the Aquila Group of Funds(SM) and the
(04/01/57) Administrator and the Administrator'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 since Senior Vice President, Hawaiian Tax-Free N/A N/A
Lahaina, HI 1997 Trust since 1993 and formerly Vice
(07/27/50) President or Assistant Vice President;
Vice President since 1997 and formerly
Assistant Vice President of the three
Aquila Money-Market Funds; Vice
President, Aquila Rocky Mountain Equity
Fund since 2006; Registered
Representative of the Distributor since
1985.
John M. Herndon Vice President since Assistant Secretary of the Aquila Group N/A N/A
New York, NY 1990 and Assistant of Funds(SM) since 1995 and Vice President
(12/17/39) Secretary since 1995 of the three Aquila Money-Market Funds
since 1990; Vice President of the
Administrator or its predecessor and
current parent since 1990.
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(4) DURING PAST 5 YEARS BY TRUSTEE INDICATED OTHERWISE.)
- ----------------- ---------- ------------------- ---------- ---------------------
Robert W. Anderson Chief Compliance Chief Compliance Officer of the Trust N/A N/A
New York, NY Officer since 2004 and each of the other funds in the
(08/23/40) and Assistant Aquila Group of Funds(SM), the
Secretary since 2000 Administrator and the Distributor since
2004, Compliance Officer of the
Administrator or its predecessor and
current parent 1998-2004; Assistant
Secretary of the Aquila Group of Funds(SM)
since 2000.
Joseph P. DiMaggio Chief Financial Chief Financial Officer of the Aquila N/A N/A
New York, NY Officer since 2003 Group of Funds(SM) since 2003 and
(11/06/56) and Treasurer since Treasurer since 2000.
2000
Edward M. W. Hines Secretary since 1984 Partner and then shareholder of legal N/A N/A
New York, NY counsel to the Trust, Hollyer Brady
(12/16/39) Barrett & Hines LLP since 1989 and
thereafter its successor, Butzel Long,
since 2007; Secretary of the Aquila
Group of Funds(SM).
Lori A. Vindigni Assistant Treasurer Assistant Treasurer of the Aquila Group N/A N/A
New York, NY since 2000 of Funds(SM) since 2000; Assistant Vice
(11/02/66) President of the Administrator or its
predecessor and current parent since
1998; Fund Accountant for the Aquila
Group of Funds(SM), 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, Suite 2300, 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; Aquila Three Peaks High Income Fund is a high income corporate bond
fund; considered together, these 12 funds, which do not include the
dormant funds described in footnote 5, are called the "Aquila Group of
Funds(SM)."
(8) The Chairman Emeritus may attend Board meetings but has no voting power.
- --------------------------------------------------------------------------------
ANALYSIS OF EXPENSES (UNAUDITED)
As a shareholder of the Trust, you may incur ongoing costs, including
management fees; distribution (12b-1) fees; and other Fund expenses. The table
below is intended to help you understand your ongoing costs (in dollars) of
investing in each of the Funds and to compare these costs with the ongoing costs
of investing in other mutual funds.
The table below is based on an investment of $1,000 invested on October 1,
2006 and held for the six months ended March 31, 2007.
ACTUAL EXPENSES
This table provides information about actual account values and actual
expenses. You may use the information provided in this table, together with the
amount you invested, to estimate the expenses that you paid over the period. To
estimate the expenses you paid on your account, divide your ending account value
by $1,000 (for example, an $8,600 ending account value divided by $1,000 = 8.6),
then multiply the result by the number under the heading entitled "Expenses Paid
During the Period".
SIX MONTHS ENDED MARCH 31, 2007
BEGINNING ENDING EXPENSES
ACTUAL ACCOUNT ACCOUNT PAID DURING
TOTAL RETURN(1) VALUE VALUE THE PERIOD(2)
- --------------------------------------------------------------------------------
CASH FUND
Original Shares 2.40% $1,000.00 $1,024.00 $ 2.88
Service Shares 2.28% $1,000.00 $1,022.80 $ 4.14
- --------------------------------------------------------------------------------
TAX-FREE FUND
Original Shares 1.55% $1,000.00 $1,015.50 $ 2.41
Service Shares 1.42% $1,000.00 $1,014.20 $ 3.67
- --------------------------------------------------------------------------------
GOVERNMENT FUND
Original Shares 2.42% $1,000.00 $1,024.20 $ 2.17
Service Chares 2.29% $1,000.00 $1,022.90 $ 3.43
- --------------------------------------------------------------------------------
(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 0.57% AND 0.82%,
RESPECTIVELY, FOR CASH FUND ORIGINAL SHARES AND SERVICE SHARES, 0.48% AND
0.73%, RESPECTIVELY, FOR TAX-FREE FUND ORIGINAL SHARES AND SERVICE SHARES,
AND 0.43% AND 0.68%, RESPECTIVELY, FOR GOVERNMENT FUND ORIGINAL SHARES AND
SERVICE SHARES 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 actual return of each
of the respective Funds. 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 portfolios of the Trust and other mutual
funds. To do so, compare this 5.00% hypothetical example relating to the
respective Fund with the 5.00% hypothetical examples that appear in the
shareholder reports of other mutual funds.
SIX MONTHS ENDED MARCH 31, 2007
Hypothetical
Annualized Beginning Ending Expenses
Total Account Account Paid During
Return Value Value the Period
- --------------------------------------------------------------------------------
CASH FUND
Original Shares 5.00% $1,000.00 $1,022.09 $ 2.87
Service Shares 5.00% $1,000.00 $1,020.84 $ 4.13
- --------------------------------------------------------------------------------
TAX-FREE 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
- --------------------------------------------------------------------------------
GOVERNMENT FUND
Original Shares 5.00% $1,000.00 $1,022.79 $ 2.17
Service Chares 5.00% $1,000.00 $1,021.54 $ 3.43
- --------------------------------------------------------------------------------
(1) EXPENSES ARE EQUAL TO THE ANNUALIZED EXPENSE RATIO OF 0.57% AND 0.82%,
RESPECTIVELY, FOR CASH FUND ORIGINAL SHARES AND SERVICE SHARES, 0.48% AND
0.73%, RESPECTIVELY, FOR TAX-FREE FUND ORIGINAL SHARES AND SERVICE SHARES,
AND 0.43% AND 0.68%, RESPECTIVELY, FOR GOVERNMENT FUND ORIGINAL SHARES AND
SERVICE SHARES 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, 2007, $6,253,366 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, 2007, shareholders were mailed the appropriate tax
form(s) which contained information on the status of distributions paid for the
2006 CALENDAR YEAR.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
INFORMATION AVAILABLE (UNAUDITED)
Much of the information that the funds in the Aquila Group of Funds(SM)
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 portfolios
other than in your shareholder reports, please check our website
http://www.aquilafunds.com or call us at 1-800-437-1020.
The Trust additionally files a complete list of its portfolio holdings for
each of the three portfolios 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 http://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 of the 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, 2006 with
respect to which any of the three portfolios of the 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 non-public
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 the Trust.
INFORMATION WE COLLECT. "Non-public personal information" is personally
identifiable financial information about you as an individual or your family.
The kinds of non-public 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 non-public 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.
NON-CALIFORNIA RESIDENTS: We also may disclose some of this information to
another fund in the Aquila Group of Funds(SM) (or its service providers) under
joint marketing agreements that permit the funds to use the information only to
provide you with information about other funds in the Aquila Group of Funds(SM)
or new services we are offering that may be of interest to you.
CALIFORNIA RESIDENTS ONLY: In addition, unless you "opt-out" of the following
disclosures using the form that was mailed to you under separate cover, we may
disclose some of this information to another fund in the Aquila Group of
Funds(SM) (or its sevice providers) under joint marketing agreements that permit
the funds to use the information only to provide you with information about
other funds in the Aquila Group of Fundssm or new services we are offering that
may be of interest to you.
HOW WE SAFEGUARD YOUR INFORMATION. We restrict access to non-public 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 non-public
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 non-public 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.
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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, Chair
Diana P. Herrmann, Vice Chair
Thomas W. Courtney
Stanley W. Hong
Russell K. Okata
Douglas Philpotts
Oswald K. Stender
FOUNDER AND CHAIRMAN EMERITUS
Lacy B. Herrmann
OFFICERS
Diana P. Herrmann, 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.
101 Sabin Street o Pawtucket, RI 02860
CUSTODIAN
JPMorgan Chase Bank, N.A.
1111 Polaris Parkway o Columbus, Ohio 43240
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Tait, Weller & Baker LLP
1818 Market Street, Suite 2400 o Philadelphia, PA 19103
Further information is contained in the Prospectus
which must precede or accompany this report.
ITEM 2. CODE OF ETHICS.
(a) As of March 31, 2007 (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:
2006 2007
---- ----
Cash Assets Trust 13,000 13,000
Tax-Free Cash Assets Trust 13,000 13,000
US Government Securities 13,000 13,000
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 were:
2006 2007
---- ----
Cash Assets Trust 1,500 1,500
Tax-Free Cash Assets Trust 1,500 1,500
US Government Securities 1,500 1,500
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. SCHEDULE OF INVESTMENTS.
Included in Item 1 above
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR
CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
Not applicable.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
The Board of Directors of the Registrant has adopted a Nominating
Committee Charter which provides that the Nominating Committee (the 'Committee')
may consider and evaluate nominee candidates properly submitted by shareholders
if a vacancy among the Independent Trustees of the Registrant occurs and if,
based on the Board's then current size, composition and structure, the Committee
determines that the vacancy should be filled. The Committee will consider
candidates submitted by shareholders on the same basis as it considers and
evaluates candidates recommended by other sources. A copy of the qualifications
and procedures that must be met or followed by shareholders to properly submit
a nominee candidate to the Committee may be obtained by submitting a request
in writing to the Secretary of the Registrant.
ITEM 11. CONTROLS AND PROCEDURES.
(a) Based on their evaluation of the registrant's disclosure
controls and procedures (as defined in Rule 30a-2(c) under the
Investment Company Act of 1940) as of a date within 90 days of
the 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 12. 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, President and Trustee
June 7, 2007
By: /s/ Joseph P. DiMaggio
- - -----------------------------------
Chief Financial Officer and Treasurer
June 7, 2007
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, President and Trustee
June 7, 2007
By: /s/ Joseph P. DiMaggio
- - -----------------------------------
Joseph P. DiMaggio
Chief Financial Officer and Treasurer
June 7, 2007
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.