UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
Investment Company Act file number 811-4066
Cash Assets Trust
(Exact name of Registrant as specified in charter)
380 Madison Avenue
New York, New York 10017
(Address of principal executive offices) (Zip code)
Joseph P. DiMaggio
380 Madison Avenue
New York, New York 10017
(Name and address of agent for service)
Registrant's telephone number, including area code: (212) 697-6666
Date of fiscal year end: 3/31
Date of reporting period: 9/30/07
FORM N-CSR
ITEM 1. REPORTS TO STOCKHOLDERS.
SEMI-ANNUAL
REPORT
SEPTEMBER 30, 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
TWISTER 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 TWISTER CASH ASSETS TRUST
ROPE AND SALE TO
LEFT OF PACIFIC](R) SEMI-ANNUAL REPORT
November, 2007
Dear Investor:
We are pleased to provide you with the Semi-Annual Report for The Pacific
Capital Funds of Cash Assets Trust for the six-month period ended September 30,
2007.
The enclosed Semi-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 their two classes of shares: Original Shares and Service Shares.
************************************
The current six-month reporting period was marked by the widespread
turbulence in the financial markets with the impact felt across a broad range of
asset classes. The financial markets became more volatile in reaction to
increasing defaults on sub-prime mortgages, or loans with weaker underwriting
standards. The problems and concerns surrounding sub-prime mortgage loans
rippled through the fixed-income market, including short-term investment
instruments which constitute a large portion of money market securities.
As the liquidity crisis in the financial markets continued to unfold
during the summer months, the Federal Reserve (the "Fed") voted to change the
course of its monetary policy. Citing a need to induce liquidity into the
banking system and to possibly curtail any threat of a slowdown in the economy,
the Fed lowered the target on the Federal Funds rate to 4.75%. The Federal Funds
rate is the interest rate banks charge one another on overnight loans and the
Fed's primary tool for influencing economic activity. As you are aware, a
reduction in interest rates usually means lower borrowing cost for consumers and
businesses, resulting in an increase in economic activity. The action by the Fed
was a bold attempt to restore investor confidence and a clear signal that the
central bank viewed the turbulence and disruptions of the past couple of months
as too dangerous to ignore.
The move by the Fed was also the first rate reduction of any kind in four
years, the steepest in nearly five years and its most abrupt reversal of course
since January 2001, when Fed policy makers sharply reduced interest rates at an
unscheduled emergency meeting just before the last recession.
NOT A PART OF THE SEMI-ANNUAL REPORT
Over the past couple of years, there has been a fundamental change in the
way people look at their investments. Investors will always want competitive
returns, yet, with the recent problem areas that have developed in the financial
markets, the words most often heard these days are, "How safe is my investment?"
This is especially true for investors' cash reserves. As you have read in
previous shareholder report letters, we have used this opportunity to remind
investors that safety of principal is first and foremost in the eyes of your
Board of Trustees, Investment Adviser and Administrator when managing your cash
reserves. Each of the Trust's investment portfolios has successfully weathered
the recent financial crisis by adhering to each portfolios' stated objective.
Rest assured, your Investment Adviser and its portfolio management team has
always sought to ensure that no undue risks are taken in order to seek higher
yield.
Looking forward, we are optimistic that each of the Pacific Capital Funds
of Cash Assets Trust will continue to provide investors with competitive returns
without compromising safety of principal.
As always, we again wish to express our appreciation for the confidence
you have shown by your investment in the Pacific Capital Funds of Cash Assets
Trust. We can assure you that we will consistently do our best to merit your
continued level of trust.
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 SEMI-ANNUAL REPORT
PACIFIC CAPITAL
CASH ASSETS TRUST
SCHEDULE OF INVESTMENTS
SEPTEMBER 30, 2007 (UNAUDITED)
PRINCIPAL
AMOUNT COMMERCIAL PAPER (45.8%) VALUE
- -------------- ------------------------------------------------------------------------------- -------------
AUTOMOTIVE (5.5%)
$ 20,000,000 Toyota Motor Credit Corp., 5.17%, 12/14/07 .................................... $ 19,787,456
-------------
BANKS (11.1%)
20,000,000 Barclays US Funding Corp., 5.40%, 10/23/07 19,934,000
20,000,000 Calyon NA, Inc., 5.17%, 01/08/08 .............................................. 19,715,375
-------------
39,649,375
-------------
BROKERAGE (4.1%)
15,000,000 Morgan Stanley Dean Witter, 5.05%, 03/18/08 ................................... 14,644,396
-------------
FINANCE (16.7%)
20,000,000 American Express Credit Corp., 5.26%, 10/12/07 ................................ 19,967,856
20,000,000 General Electric Capital Corp., 5.21%, 11/08/07 ............................... 19,890,011
20,000,000 Swedish Export Credit Corp., 5.14%, 10/18/07 .................................. 19,951,408
-------------
59,809,275
-------------
INSURANCE (8.4%)
15,000,000 MetLife Funding, Inc., 4.75%, 11/09/07 ........................................ 14,922,813
15,000,000 Prudential Funding Corp., 4.67%, 11/26/07 ..................................... 14,891,033
-------------
29,813,846
-------------
Total Commercial Paper .................................................... 163,704,348
-------------
U. S. GOVERNMENT AGENCY OBLIGATIONS (34.6%)
-------------------------------------------------------------------------------
60,000,000 Federal Home Loan Bank, 4.57%, 10/19/07 ....................................... 59,862,900
64,000,000 Federal National Mortgage Corp., 5.11%, 11/19/07 .............................. 63,554,862
-------------
Total U. S. Government Agency Obligations ................................. 123,417,762
-------------
CERTIFICATE OF DEPOSIT (5.6%)
-------------------------------------------------------------------------------
20,000,000 Societe Generale N.A., Inc., 5.38%, 06/09/08 .................................. 20,000,000
-------------
REPURCHASE AGREEMENTS (14.0%)
-------------------------------------------------------------------------------
25,000,000 Banc of America Securities LLC, 4.80%, 10/01/07 ............................... 25,000,000
(Proceeds of $25,010,000 to be received at maturity, Collateral:
$24,850,000 Federal Home Loan Mortgage Corp. 6.00% due
07/06/17; the collateral fair value plus interest receivable
equals $25,512,425)
PRINCIPAL
AMOUNT REPURCHASE AGREEMENTS (CONTINUED) VALUE
- -------------- ------------------------------------------------------------------------------- -------------
AUTOMOTIVE (5.5%)
$ 25,000,000 SG Americas Securities, LLC, 4.90%, 10/01/07 .................................. $ 25,000,000
(Proceeds of $25,010,208 to be received at maturity, Collateral:
$26,040,000 Federal National Mortgage Association discount
note due 03/12/08; the collateral fair value plus interest
receivable equals $25,500,000) -------------
Total Repurchase Agreements ............................................... 50,000,000
-------------
SHARES INVESTMENT COMPANY (0.4%)
- -------------- -------------------------------------------------------------------------------
1,390,894 JP Morgan U.S. Government Money Market Fund, Capital Shares ................... 1,390,894
-------------
Total Investments (Amortized Cost $358,513,004*) .............................. 100.4% 358,513,004
Other assets less liabilities ................................................. (0.4) (1,329,736)
----- -------------
NET ASSETS .................................................................... 100.0% $ 357,183,268
===== =============
* Cost for Federal income tax and financial reporting purposes is identical.
PERCENT OF
PORTFOLIO DISTRIBUTION (UNAUDITED) PORTFOLIO
---------------------------------- ----------
Commercial Paper .............................................................. 45.7%
U. S. Government Obligations .................................................. 34.4
Certificate of Deposit ........................................................ 5.6
Repurchase Agreements ......................................................... 13.9
Investment Company ............................................................ 0.4
-----
100.0%
=====
See accompanying notes to financial statements.
PACIFIC CAPITAL
TAX-FREE CASH ASSETS TRUST
SCHEDULE OF INVESTMENTS
SEPTEMBER 30, 2007 (UNAUDITED)
RATING
PRINCIPAL MOODY'S/
AMOUNT MUNICIPAL BONDS (99.7%) S&P VALUE
- ------------ -------------------------------------------------------- -------- -------------
COLORADO (1.9%):
Colorado Housing & Finance Authority Revenue
Bonds, Class I, Series A-1, Weekly Reset VRDO*,
SPA: FHLB
$ 4,360,000 3.730%, 10/01/30 ...................................... VMIG1/A-1+ $ 4,360,000
-------------
FLORIDA (0.5%):
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 1,010,000
-------------
GEORGIA (0.5%):
Columbia County, GA, Courthouse/Detention Center
Project GO Bond, Prerefunded to 02/01/08 @
102, Collateral: State & Local Government Series
1,000,000 5.625%, 02/01/20 ...................................... Aa2/AA 1,026,202
-------------
HAWAII (38.1%):
City & County Honolulu, HI, GO Bond, Series B,
MBIA Insured
200,000 5.000%, 07/01/08 ...................................... Aaa/AAA 201,727
City & County Honolulu, HI, GO Bond, Series C,
FGIC Insured
500,000 5.500%, 11/01/07 ...................................... Aaa/AAA 500,715
City and County Honolulu, HI, GO Commercial
Paper, Interest at Maturity, Series H, LOC: Heleba
15,000,000 3.680%, 11/01/07 ..................................... P-1/A1+ 15,000,000
City and County Honolulu, HI, GO Commercial
Paper, Interest at Maturity, Series H, LOC: Heleba
2,000,000 3.650%, 02/05/08 .................................... P-1/A1- 2,000,000
City and County Honolulu, HI, GO Commercial
Paper, Interest at Maturity Series W, LOC:
Westdeutsche Landesbank
7,100,000 3.730%, 02/05/08 .................................... P-1/A1+ 7,100,000
City and County Honolulu, HI, GO Commercial
Paper, Interest at Maturity Series W, LOC:
Westdeutsche Landesbank
4,500,000 3.670%, 10/02/07 .................................... P1/A1+ 4,500,000
2,300,000 3.720%, 11/01/07 .................................... P1/A1+ 2,300,000
RATING
PRINCIPAL MOODY'S/
AMOUNT MUNICIPAL BONDS (CONTINUED) S&P VALUE
- ------------ -------------------------------------------------------- -------- -------------
HAWAII (continued):
Hawaii State, GO Bonds, Series C, Refunding,
FSA Insured
$ 250,000 5.125%, 02/01/08 .................................... Aaa/AAA $ 251,238
Hawaii State, GO Bond, Series CL, MBIA Insured
1,000,000 6.000%, 03/01/08 .................................... Aaa/AAA 1,009,518
Hawaii State, GO Bond, Series CN, FGIC Insured
1,050,000 6.250%, 03/01/08 .................................... Aaa/AAA 1,060,906
Hawaii State, GO Bond, Series CP, FGIC Insured,
Prerefunded to 10/01/07 @ 101, Collateral: US
Government Securities
200,000 5.000%, 10/01/14 .................................... Aaa/AAA 202,000
Hawaii State, GO Bond, Series CR, MBIA Insured,
Prerefunded to 04/01/08 @ 101, Collateral: US
Government Securities
700,000 5.250%, 04/01/12 .................................... Aaa/AAA 712,490
1,050,000 4.750%, 04/01/18 .................................... Aaa/AAA 1,065,814
Hawaii State, GO Bond, Series CS, MBIA Insured
4,000,000 5.000%, 04/01/08 .................................... Aaa/AAA 4,024,796
Hawaii State, GO Bonds, Series CU, MBIA Insured
750,000 5.750%, 10/01/07 .................................... Aaa/AAA 750,000
Hawaii State, GO Bond, Series CZ, FSA Insured
1,000,000 5.000%, 07/01/08 .................................... Aaa/AAA 1,009,775
Hawaii State, GO Bond, Series DB, MBIA Insured
1,000,000 4.000%, 09/01/08 .................................... Aaa/AAA 1,002,836
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 3.580%, 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
37,335,000 3.520%, 07/01/28 .................................... MIG1/AAA 37,335,000
RATING
PRINCIPAL MOODY'S/
AMOUNT MUNICIPAL BONDS (CONTINUED) S&P VALUE
- ------------ -------------------------------------------------------- -------- -------------
HAWAII (continued):
Hawaii State Highway Revenue, Prerefunded to
07/01/08 @101, Collateral: State & Local
Government Series 100%
$ 1,100,000 5.000%, 07/01/16 .................................... Aaa/AAA $ 1,121,521
-------------
85,748,336
-------------
ILLINOIS (3.8%):
Chicago, IL GO Bonds, Series B, Weekly Reset
VRDO*, SPA: Landesbank Baden-Wurttemberg,
FGIC Insured
6,000,000 3.740%, 01/01/37 .................................... VMIG1/A-1+ 6,000,000
Chicago, IL Met Water Reclamation District, Greater
Chicago Capital Improvement, Escrowed to
Maturity, Collateral: State & Government
Series 100%
2,000,000 7.000%, 12/01/07 .................................... Aaa/AAA 2,010,618
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 612,756
-------------
8,623,374
-------------
MASSACHUSETTS (0.4%):
Massachusetts State Industrial Finance Agency,
Assisted Living Facilities Revenue (TNG Marina
Bay LLC Project), Revenue Bond, AMT,
Prerefunded to 12/01/07 @103, Collateral: US
Government Securities
915,000 7.500%, 12/01/27 .................................... NR/AAA 947,552
-------------
MICHIGAN (7.5%):
Eastern Michigan University, University Revenue
Bonds, Daily Reset VRDO*, FGIC Insured,
SPA: FGIC-SPI
9,500,000 3.910%, 06/01/27 .................................... Aaa/A-1+ 9,500,000
RATING
PRINCIPAL MOODY'S/
AMOUNT MUNICIPAL BONDS (CONTINUED) S&P VALUE
- ------------ -------------------------------------------------------- -------- -------------
MICHIGAN (continued):
Macomb Township, MI Building Authority, Revenue
Bonds, FGIC Insured, Prerefunded to 04/01/08 @101,
Collateral: State & Local Government Series 100%
$ 1,000,000 6.000%, 04/01/27 .................................... Aaa/AAA $ 1,021,247
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 1,010,000
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- 2,561,598
Northern Michigan University Revenue Bonds,
Daily Reset VRDO*, SPA: DEPFA Bank PLC,
AMBAC Insured
2,725,000 3.910%, 12/01/35 .................................... Aaa/AAA 2,725,000
-------------
16,817,845
-------------
MISSOURI (13.3%):
Kansas City, MO Industrial Development Authority
Revenue Bonds, (Ewing Marion Kaufman
Foundation), Daily Reset VRDO*
9,860,000 3.910%, 04/01/27 .................................... NR/A-1+ 9,860,000
Missouri State, Health & Educational Facilities Authority
Revenue Bonds (St. Louis University), Series B,
Daily Reset VRDO*, SPA: Bank of America N.A.
6,550,000 3.940%, 10/01/24 .................................... VMIG1/A-1+ 6,550,000
Missouri State, Health & Educational Facilities Authority
Revenue Bonds (Washington University), Series B,
SPA: JPMorgan Chase Bank NA, Daily Reset VRDO*
6,000,000 3.860%, 03/01/40 .................................... VMIG1/A-1+ 6,000,000
Missouri State Health & Educational Facilities Authority
Educational Facilities Revenue, St. Louis University,
SPA: US Bank NA, Daily Reset, VRDO*
760,000 3.940%, 07/01/32 .................................... VMIG1/NR 760,000
RATING
PRINCIPAL MOODY'S/
AMOUNT MUNICIPAL BONDS (CONTINUED) S&P VALUE
- ------------ -------------------------------------------------------- -------- -------------
MISSOURI (continued):
Missouri State Health & Educational Facilities Authority
Revenue, Washington University, Series A, SPA:
Dexia Credit Local, Daily Reset, VRDO*
$ 3,250,000 3.860%, 02/15/34 .................................... Aaa/AAA $ 3,250,000
University of Missouri University System Facilities
Revenue Bonds, Series B, Daily Reset VRDO*
3,400,000 3.860%, 11/01/30 .................................... VMIG1/A-1+ 3,400,000
-------------
29,820,000
-------------
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 922,672
-------------
NEVADA (4.5%):
Clark County, NV Airport Revenue Bonds, Series C,
Weekly Reset VRDO*, SPA: Landesbank Baden-
Wurttemberg, FGIC Insured
10,100,000 3.740%, 07/01/29 .................................... VMIG1/A-1+ 10,100,000
-------------
NEW YORK (6.2%):
Long Island, NY Power Authority Revenue Bonds,
Series 1A, Weekly Reset VRDO*, LOC: 80%
Bayerische Landesbank; 20% Landesbank
Baden-Wurttemberg
9,000,000 3.770%, 05/01/33 .................................... VMIG1/A-1+ 9,000,000
New York, NY City Transitional Finance Authority
Revenue Bonds, Series 3, Daily Reset VRDO*,
SPA: Royal Bank of Canada
3,245,000 3.960%, 11/01/22 .................................... VMIG1,A-1+ 3,245,000
New York, NY City Transitional Finance Authority
Revenue, Adjustable-Future Tax Secured-
Series A-1, Weekly reset VRDO*, SPA:
Westdeutsche Landesbank
1,800,000 3.850%, 11/15/28 .................................... VMIG1,A-1+ 1,800,000
-------------
14,045,000
-------------
RATING
PRINCIPAL MOODY'S/
AMOUNT MUNICIPAL BONDS (CONTINUED) S&P VALUE
- ------------ -------------------------------------------------------- -------- -------------
NORTH CAROLINA (7.5%):
Concord, NC Utility Systems Revenue Bonds, Series
B, Weekly Reset VRDO*, SPA: Wachovia Bank,
FSA Insured
$ 9,720,000 3.730%, 12/01/22 .................................... VMIG1/NR $ 9,720,000
Durham, NC Public Improvement Project GO
Bonds, Weekly Reset VRDO*, SPA: Wachovia
Bank of North Carolina
1,425,000 3.750%, 02/01/09 .................................... VMIG1/A-1+ 1,425,000
2,975,000 3.750%, 02/01/11 .................................... VMIG1/A-1+ 2,975,000
1,270,000 3.750%, 02/01/12 .................................... VMIG1/A-1+ 1,270,000
1,475,000 3.750%, 02/01/13 .................................... VMIG1/A-1+ 1,475,000
-------------
16,865,000
-------------
NORTH DAKOTA (1.3%):
Grand Forks, ND Senior Housing Revenue, 4000
Valley Square Project, Prerefunded to 12/01/07
@ 100, Collateral: State & Local Government
Series 100%
3,000,000 6.250%, 12/01/34 .................................... NR/NR* 3,011,862
-------------
TENNESSEE (0.3%):
Knox County, TN Public Improvement, GO Bond,
Prerefunded to 05/01/08 @ 101, Collateral: State &
Local Government Series 100%
750,000 5.375%, 05/01/18 .................................... Aa2/AA 764,619
-------------
TEXAS (0.9%):
Tarrant County, TX Health Facilities Development
Health System Revenues, Texas Health Resources
System-Series A, MBIA Insured, Prerefunded to
2/15/08 @102, Collateral: State & Local
Government Series 100%
2,000,000 5.750%, 02/15/09 .................................... Aaa/AAA 2,054,556
-------------
RATING
PRINCIPAL MOODY'S/
AMOUNT MUNICIPAL BONDS (CONTINUED) S&P VALUE
- ------------ -------------------------------------------------------- -------- -------------
VIRGINIA (3.3%):
University of Virginia Revenue Bonds, Series A,
Weekly Reset VRDO*
$ 7,315,000 3.700%, 06/01/34 .................................... VMIG1/A-1+ $ 7,315,000
-------------
WASHINGTON (0.5%):
Island County, WA School District #201 Oak Harbor,
GO Bond, FGIC Insured, Prerefunded to 12/01/07
@ 100, Collateral: US Government Securities
1,010,000 5.550%, 12/01/11 .................................... Aaa/NR 1,013,000
-------------
PUERTO RICO (8.8%):
Puerto Rico Commonwealth Highway &
Transportation Authority Revenue, Series A-
Variable Rate, Weekly Reset, AMBAC Insured,
SPA: Bank of Nova Scotia
2,500,000 3.700%, 07/01/28 .................................... VMIG1/A-1+ 2,500,000
Puerto Rico Commonwealth Highway &
Transportation Authority Transportation Revenue
Prerefunded Series A, Revenue Bonds, AMBAC
Insured, Prerefunded to 07/01/08 @ 101, Collateral:
State & Local Government Series 100%
2,675,000 5.000%, 07/01/28 .................................... Aaa/AAA 2,726,633
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 8,412,540
Puerto Rico Electric Power Authority Power
Revenue, Series DD, FSA Insured, Prerefunded to
07/01/08 @ 101.50
1,000,000 5.000%, 07/01/28 .................................... Aaa/AAA 1,025,796
Puerto Rico Government Development Bank
Refunding Adjustable Rate, Revenue Bond, MBIA
Insured, SPA: Credit Suisse, Weekly Reset, VRDO*
5,100,000 3.510%, 12/01/15 .................................... Aaa/AAA 5,100,000
-------------
19,764,969
-------------
RATING
MOODY'S/
SHARES INVESTMENT COMPANY (1.9%) S&P VALUE
- ------------ -------------------------------------------------------- -------- -------------
4,270,000 Goldman Sachs Financial Square Tax-Free Money
Market Fund Institutional Shares ................ $ 4,270,000
--------------
Total Investments (Amortized Cost $228,479,987**) ... 101.6% 228,479,987
Other assets less liabilities ....................... (1.6) (3,601,823)
--------------
NET ASSETS .......................................... 100.0% $ 224,878,164
===== ==============
* 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.
*** Any security not rated (NR) by either credit rating service must be
determined by the Investment Adviser to have sufficient quality to be
ranked in the top four ratings if a credit rating were to be assigned by a
rating service.
Portfolio Distribution (unaudited)
Percentage Percentage Percentage
of Portfolio of Portfolio of Portfolio
------------ ------------ ------------
Colorado 1.9% Michigan 7.4% Puerto Rico 8.7%
Florida 0.4 Missouri 13.1 Tennessee 0.3
Georgia 0.5 Nebraska 0.4 Texas 0.9
Hawaii 37.5 Nevada 4.4 Virginia 3.2
Illinois 3.8 New York 6.1 Washington 0.4
Investment Company 1.9 North Carolina 7.4 100.0%
Massachusetts 0.4 North Dakota 1.3
PORTFOLIO ABBREVIATIONS:
AMBAC - American Municipal Bond Assurance Corp.
AMT - Alternative Minimum Tax
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
SEPTEMBER 30, 2007 (UNAUDITED)
PRINCIPAL
AMOUNT U.S. GOVERNMENT AGENCIES (100.3%) VALUE
- ------------- ---------------------------------------------------------------- ---------------
FEDERAL HOME LOAN BANK (100.3%)
$146,000,000 4.00%, 10/01/07 ............................................... $ 146,000,000
85,000,000 4.92%, 10/03/07 ............................................... 84,976,767
100,000,000 5.09%, 10/09/07 ............................................... 99,886,889
140,700,000 4.60%, 10/19/07 ............................................... 140,376,390
152,747,000 4.63%, 10/22/07 ............................................... 152,334,435
51,010,000 4.74%, 10/23/07 ............................................... 50,862,397
150,000,000 5.13%, 10/24/07 ............................................... 149,508,615
257,000,000 4.84%, 10/26/07 ............................................... 256,135,659
50,000,000 4.75%, 11/01/07 ............................................... 49,795,486
150,000,000 4.94%, 11/14/07 ............................................... 149,094,333
100,000,000 5.08%, 11/16/07 ............................................... 99,350,889
50,000,000 4.83%, 11/21/07 ............................................... 49,657,875
80,000,000 4.55%, 11/23/07 ............................................... 79,464,111
40,000,000 4.90%, 11/30/07 ............................................... 39,673,333
100,000,000 4.72%, 12/07/07 ............................................... 99,121,556
7,371,000 4.87%, 12/14/07 ............................................... 7,297,212
110,000,000 4.54%, 12/21/07 ............................................... 108,876,350
15,000,000 5.07%, 01/16/08 ............................................... 14,773,963
50,000,000 4.89%, 02/01/08 ............................................... 49,164,625
24,000,000 4.62%, 03/12/08 ............................................... 23,497,960
---------------
Total U.S. Government Agencies ............................ 1,849,848,845
---------------
SHARES INVESTMENT COMPANY (0.1%)
- ------------ ---------------------------------------------------------------
1,162,972 JP Morgan U.S. Government Money Market Fund, Capital Shares ... 1,162,972
---------------
Total Investments (Amortized Cost $1,851,011,817*) ............ 100.4% 1,851,011,817
Other assets less liabilities ................................. (0.4) (7,463,769)
----- ---------------
NET ASSETS .................................................... 100.0% $ 1,843,548,048
===== ===============
* 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
SEPTEMBER 30, 2007 (UNAUDITED)
CASH TAX-FREE GOVERNMENT
FUND FUND FUND
--------------- --------------- ---------------
ASSETS:
Investments at value and amortized cost (note 2) ............... $ 308,513,004 $ 228,479,987 $ 1,851,011,817
Repurchase agreements (note 2) ................................. 50,000,000 -- --
Cash ........................................................... -- 8,510 --
Interest receivable ............................................ 369,672 1,635,618 5,114
Other assets ................................................... 23,792 13,439 115,820
--------------- --------------- ---------------
Total Assets ............................................... 358,906,468 230,137,554 1,851,132,751
--------------- --------------- ---------------
LIABILITIES:
Payable for investment securities purchased .................... -- 4,545,000 --
Dividends payable .............................................. 1,458,800 612,529 6,736,780
Adviser and Administrator fees payable ......................... 159,864 77,397 604,049
Distribution fees payable ...................................... 27,509 14,999 221,196
Accrued expenses ............................................... 77,027 9,465 22,678
--------------- --------------- ---------------
Total Liabilities .......................................... 1,723,200 5,259,390 7,584,703
--------------- --------------- ---------------
NET ASSETS ..................................................... $ 357,183,268 $ 224,878,164 $ 1,843,548,048
=============== =============== ===============
NET ASSETS CONSIST OF:
Capital Stock - Authorized an unlimited number of shares,
par value $0.01 per share .................................. $ 3,571,689 $ 2,248,808 $ 18,434,778
Additional paid-in capital ..................................... 353,610,399 222,634,163 1,825,111,400
Distributions in excess of net investment income ............... -- (4,807) --
Accumulated net realized gain (loss) on investments ............ 1,180 -- 1,870
--------------- --------------- ---------------
$ 357,183,268 $ 224,878,164 $ 1,843,548,048
=============== =============== ===============
SHARES OF BENEFICIAL INTEREST:
Original Shares Class:
Net Assets ................................................. $ 239,629,654 $ 158,398,400 $ 750,758,908
=============== =============== ===============
Shares outstanding ......................................... 239,848,014 158,399,658 750,729,112
=============== =============== ===============
Net asset value per share .................................. $ 1.00 $ 1.00 $ 1.00
=============== =============== ===============
Service Shares Class:
Net Assets ................................................. $ 117,553,614 $ 66,479,764 $ 1,092,789,140
=============== =============== ===============
Shares outstanding ......................................... 117,320,863 66,481,131 1,092,748,665
=============== =============== ===============
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
SIX MONTHS ENDED SEPTEMBER 30, 2007 (UNAUDITED)
CASH TAX-FREE GOVERNMENT
FUND FUND FUND
--------------- --------------- ---------------
INVESTMENT INCOME:
Interest income .............................................. $ 11,646,927 $ 4,386,783 $ 47,629,425
------------ ------------ ------------
EXPENSES:
Investment Advis er fees (note 3) ............................ 782,209 366,896 3,001,450
Administrator fees (note 3) .................................. 316,289 112,374 658,496
Distribution fees (note 3) ................................... 190,852 87,761 1,378,871
Trustees' fees and expenses .................................. 47,019 30,826 106,760
Insurance .................................................... 19,469 8,863 36,033
Legal fees (note 3) .......................................... 15,844 3,834 31,215
Registration fees and dues ................................... 13,514 2,713 24,947
Fund accounting fees ......................................... 12,016 11,183 15,474
Shareholders' reports ........................................ 10,602 815 10,208
Transfer and shareholder servicing agent fees ................ 6,661 6,450 6,480
Auditing and tax fees ........................................ 6,378 6,500 6,500
Custodian fees ............................................... 3,794 8,100 4,869
Chief Compliance Officer (note 3) ............................ 2,278 2,278 2,278
Miscellaneous ................................................ 5,057 1,411 20,183
------------ ------------ ------------
Total expenses ............................................... 1,431,982 650,004 5,303,764
Expenses paid indirectly (note 5) ............................ (7,495) (2,362) (429)
------------ ------------ ------------
Net expenses ..................................................... 1,424,487 647,642 5,303,335
------------ ------------ ------------
Net investment income ............................................ 10,222,440 3,739,141 42,326,090
Net realized gain (loss) from securities transactions ............ -- -- --
------------ ------------ ------------
Net change in net assets resulting from operations ............... $ 10,222,440 $ 3,739,141 $ 42,326,090
============ ============ ============
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 GOVERNMENT FUND
---------------------------- ---------------------------- --------------------------------
SIX MONTHS SIX MONTHS SIX MONTHS
ENDED ENDED ENDED
SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30,
2007 YEAR ENDED 2007 YEAR ENDED 2007 YEAR ENDED
(UNAUDITED) MARCH 31, 2007 (UNAUDITED) MARCH 31, 2007 (UNAUDITED) MARCH 31, 2007
------------- -------------- ------------- -------------- ------------- --------------
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income ........ $ 10,222,440 $ 21,770,080 $ 3,739,141 $ 6,389,796 $ 42,326,090 $ 62,145,714
Net realized gain (loss)
from securities
transactions ............... -- -- -- 237 -- 340
------------- -------------- ------------- ------------- -------------- --------------
Net change in net assets
resulting from operations .. 10,222,440 21,770,080 3,739,141 6,390,033 42,326,090 62,146,054
------------- -------------- ------------- ------------- -------------- --------------
DIVIDENDS TO SHAREHOLDERS
FROM NET INVESTMENT INCOME:
Original Shares ............ (6,794,586) (13,877,905) (2,696,901) (4,219,673) (17,355,870) (22,368,853)
Service Shares ............. (3,427,854) (7,892,175) (1,029,936) (2,197,571) (24,970,220) (39,776,861)
------------- -------------- ------------- ------------- -------------- --------------
Total dividends to
shareholders from net
investment income ........ (10,222,440) (21,770,080) (3,726,837) (6,417,244) (42,326,090) (62,145,714)
------------- -------------- ------------- ------------- -------------- --------------
CAPITAL SHARE TRANSACTIONS
(at $1.00 per share):
Proceeds from shares sold:
Original Shares ............ 250,420,097 729,865,243 117,841,386 230,204,313 789,247,207 1,604,790,944
Service Shares ............. 290,964,105 633,141,409 51,880,011 130,614,157 1,219,614,878 3,243,154,899
------------- -------------- ------------- ------------- -------------- --------------
541,384,202 1,363,006,652 169,721,397 360,818,470 2,008,862,085 4,847,945,843
------------- -------------- ------------- ------------- -------------- --------------
Reinvested dividends:
Original Shares ............ 105,120 307,349 15,549 45,489 94,116 175,409
Service Shares ............. 2,960,708 7,891,836 860,890 2,197,555 21,057,034 39,776,852
------------- -------------- ------------- ------------- -------------- --------------
3,065,828 8,199,185 876,439 2,243,044 21,151,150 39,952,261
------------- -------------- ------------- ------------- -------------- --------------
Cost of shares redeemed:
Original Shares ............ (297,944,068) (728,327,507) (130,076,785) (192,184,780) (723,912,472) (1,349,057,009)
Service Shares ............. (341,959,643) (645,130,780) (74,613,692) (137,479,845) (1,226,754,087) (3,091,306,685)
------------- -------------- ------------- ------------- -------------- --------------
(639,903,711) (1,373,458,287) (204,690,477) (329,664,625) (1,950,666,559) (4,440,363,694)
------------- -------------- ------------- ------------- -------------- --------------
Change in net assets
from capital share
transactions ................ (95,453,681) (2,252,450) (34,092,641) 33,396,889 79,346,676 447,534,410
------------- -------------- ------------- ------------- -------------- --------------
Total change in net assets (95,453,681) (2,252,450) (34,080,337) 33,369,678 79,346,676 447,534,750
------------- -------------- ------------- ------------- -------------- --------------
NET ASSETS:
Beginning of period .......... 452,636,949 454,889,399 258,958,501 225,588,823 1,764,201,372 1,316,666,622
------------- -------------- ------------- ------------- -------------- --------------
End of period* ............... $ 357,183,268 $ 452,636,949 $ 224,878,164 $ 258,958,501 $1,843,548,048 $1,764,201,372
============= ============== ============= ============= ============== ==============
*Includes undistributed
(distributions in excess of) net
investment income of: .......... $ -- $ -- $ (4,807) $ (17,111) $ -- $ --
============= ============== ============= ============= ============== ==============
See accompanying notes to financial statements.
THE PACIFIC CAPITAL FUNDS
OF CASH ASSETS TRUST
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2007 (UNAUDITED)
1. ORGANIZATION
Cash Assets Trust (the "Trust") was organized on May 7, 1984 as a
Massachusetts business trust and is registered under the Investment Company Act
of 1940 (the "1940 Act") as an open-end investment company.
The Trust consists of the following three investment portfolios (referred to
individually as a "Fund" and collectively as the "Funds"): Pacific Capital Cash
Assets Trust ("Cash Fund") (a diversified portfolio which commenced operations
on December 5, 1984), Pacific Capital Tax-Free Cash Assets Trust ("Tax-Free
Fund") (a non-diversified portfolio which commenced operations on April 4,
1989), and Pacific Capital U.S. Government Securities Cash Assets Trust
("Goverment Fund") (a diversified portfolio which commenced operations on April
4, 1989). The Trust is authorized to issue for each Fund an unlimited number of
shares of $0.01 par value in two classes of shares; the Original Shares Class
and the Service Shares Class. The Original Shares Class includes all currently
outstanding shares of each Fund that were issued prior to January 20, 1995, the
date on which the Capital structure was changed to include two classes rather
than one. The two classes of shares are substantially identical, except that
Service Shares bear the fees that are payable under the Trust's Distribution
Plan.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies followed by
the Funds in the preparation of their financial statements. The policies are in
conformity with 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 each 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) 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 required 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 have been recorded as a tax benefit or expense in the
current year. FIN 48 was effective for the Trust on September 28, 2007 and
there were no uncertain tax positions to be reflected in the Trust's
financial statements at September 30, 2007.
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 six months ended
September 30, 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 six months ended September 30, 2007, the following amounts were
incurred for legal fees allocable to Hollyer Brady Barrett & Hines LLP ("Hollyer
Brady") and its successor, Butzel Long PC, counsel to the Trust, for legal
services in conjunction with the respective Fund's ongoing operations: Cash Fund
$15,711; Tax-Free Fund $3,834; Government Fund $30,905. The Secretary of the
Trust was a partner at Hollyer Brady and is a shareholder of its successor.
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
----------------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED MARCH 31,
9/30/07 --------------------------------------------------------
(UNAUDITED) 2007 2006 2005 2004 2003
----------- -------- -------- -------- -------- --------
Net asset value, beginning of period ..... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- -------- -------- --------
Income from investment operations:
Net investment income+ ................ 0.02 0.05 0.03 0.01 0.01 0.01
-------- -------- -------- -------- -------- --------
Less distributions:
Dividends from net investment income .. (0.02) (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 $ 1.00
======== ======== ======== ======== ======== ========
Total return ............................. 2.39%* 4.75% 3.20% 1.36% 0.90% 1.35%
Ratios/supplemental data
Net assets, end of period (in millions) $ 240 $ 287 $ 286 $ 366 $ 287 $ 361
Ratio of expenses to average net assets 0.57%** 0.57% 0.58% 0.37% 0.21% 0.36%
Ratio of net investment income to
average net assets .................. 4.74%** 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 0.56%** 0.57% 0.58% 0.37%# 0.21%# 0.36%#
SERVICE SHARES
-----------------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED MARCH 31,
9/30/07 --------------------------------------------------------
(UNAUDITED) 2007 2006 2005 2004 2003
----------- -------- -------- -------- -------- --------
Net asset value, beginning of period ..... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- -------- -------- --------
Income from investment operations:
Net investment income+ ................ 0.02 0.04 0.03 0.01 0.01 0.01
-------- -------- -------- -------- -------- --------
Less distributions:
Dividends from net investment income .. (0.02) (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 $ 1.00
======== ======== ======== ======== ======== ========
Total return ............................. 2.26%* 4.49% 2.94% 1.11% 0.65% 1.09%
Ratios/supplemental data
Net assets, end of period (in millions) $ 118 $ 166 $ 169 $ 166 $ 119 $ 123
Ratio of expenses to average net assets 0.81%** 0.82% 0.83% 0.61% 0.46% 0.61%
Ratio of net investment income to
average net assets .................. 4.48%** 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 0.81%** 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.
* Not annualized.
** Annualized.
See accompanying notes to financial statements.
PACIFIC CAPITAL
TAX-FREE CASH ASSETS TRUST
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
ORIGINAL SHARES
----------------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED MARCH 31,
9/30/07 --------------------------------------------------------
(UNAUDITED) 2007 2006 2005 2004 2003
----------- -------- -------- -------- -------- --------
Net asset value, beginning of period ..... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- -------- -------- --------
Income from investment operations:
Net investment income+ ................ 0.02 0.03 0.02 0.01 0.01 0.01
-------- -------- -------- -------- -------- --------
Less distributions:
Dividends from net investment income .. (0.02) (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 $ 1.00
======== ======== ======== ======== ======== ========
Total return ............................. 1.60%* 3.09% 2.21% 1.16% 0.84% 1.15%
Ratios/supplemental data
Net assets, end of period (in millions) $ 158 $ 171 $ 133 $ 134 $ 99 $ 130
Ratio of expenses to average net assets 0.47%** 0.50% 0.50% 0.29% 0.17% 0.28%
Ratio of net investment income to
average net assets .................. 3.17%** 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 . 0.47%** 0.49% 0.50% 0.28%# 0.17%# 0.27%#
SERVICE SHARES
-----------------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED MARCH 31,
9/30/07 --------------------------------------------------------
(UNAUDITED) 2007 2006 2005 2004 2003
----------- -------- -------- -------- -------- --------
Net asset value, beginning of period ..... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- -------- -------- --------
Income from investment operations:
Net investment income+ ................ 0.01 0.03 0.02 0.01 0.01 0.01
-------- -------- -------- -------- -------- --------
Less distributions:
Dividends from net investment income .. (0.01) (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 $ 1.00
======== ======== ======== ======== ======== ========
Total return ............................. 1.48%* 2.83% 1.96% 0.90% 0.59% 0.90%
Ratios/supplemental data
Net assets, end of period (in millions) $ 66 $ 88 $ 93 $ 72 $ 50 $ 56
Ratio of expenses to average net assets 0.72%** 0.75% 0.75% 0.53% 0.42% 0.53%
Ratio of net investment income to
average net assets .................. 2.92%** 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 . 0.72%** 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.
* Not annualized.
** Annualized.
See accompanying notes to financial statements.
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
ORIGINAL SHARES
----------------------------------------------------------------------
Six Months
Ended Year Ended March 31,
9/30/07 --------------------------------------------------------
(unaudited) 2007 2006 2005 2004 2003
----------- -------- -------- -------- -------- --------
Net asset value, beginning of period ..... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- -------- -------- --------
Income from investment operations:
Net investment income+ ................ 0.02 0.05 0.03 0.01 0.01 0.01
-------- -------- -------- -------- -------- --------
Less distributions:
Dividends from net investment income .. (0.02) (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 $ 1.00
======== ======== ======== ======== ======== ========
Total return ............................. 2.41%* 4.80% 3.25% 1.41% 0.96% 1.34%
Ratios/supplemental data
Net assets, end of period (in millions) $ 751 $ 685 $ 429 $ 354 $ 263 $ 270
Ratio of expenses to average net assets 0.43%** 0.44% 0.45% 0.27% 0.11% 0.25%
Ratio of net investment income to
average net assets .................. 4.78%** 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 0.43%** 0.44% 0.45% 0.27%# 0.11%# 0.24%#
SERVICE SHARES
-----------------------------------------------------------------------
Six Months
Ended Year Ended March 31,
9/30/07 --------------------------------------------------------
(unaudited) 2007 2006 2005 2004 2003
----------- -------- -------- -------- -------- --------
Net asset value, beginning of period ..... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- -------- -------- --------
Income from investment operations:
Net investment income+ ................ 0.02 0.04 0.03 0.01 0.01 0.01
-------- -------- -------- -------- -------- --------
Less distributions:
Dividends from net investment income .. (0.02) (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 $ 1.00
======== ======== ======== ======== ======== ========
Total return ............................. 2.29%* 4.54% 3.00% 1.16% 0.71% 1.09%
Ratios/supplemental data
Net assets, end of period (in millions) $ 1,093 $ 1,079 $ 887 $ 578 $ 575 $ 448
Ratio of expenses to average net assets 0.68%** 0.69% 0.70% 0.52% 0.36% 0.49%
Ratio of net investment income to
average net assets .................. 4.53%** 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 0.68%** 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.
* Not annualized.
** Annualized.
See accompanying notes to financial statements.
- --------------------------------------------------------------------------------
ANALYSIS OF EXPENSES (UNAUDITED)
As a shareholder of the Trust, you may incur ongoing costs, including
management fees; distribution (12b-1) fees; and other 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 April 1,
2007 and held for the six months ended September 30, 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 SEPTEMBER 30, 2007
BEGINNING ENDING EXPENSES
ACTUAL ACCOUNT ACCOUNT PAID DURING
TOTAL RETURN(1) VALUE VALUE THE PERIOD(2)
- -----------------------------------------------------------------------------
CASH FUND
Original Shares 2.39% $1,000.00 $1,023.90 $2.83
Service Shares 2.26% $1,000.00 $1,022.60 $4.10
- -----------------------------------------------------------------------------
TAX-FREE FUND
Original Shares 1.60% $1,000.00 $1,016.00 $2.37
Service Shares 1.48% $1,000.00 $1,014.80 $3.63
- -----------------------------------------------------------------------------
GOVERNMENT FUND
Original Shares 2.41% $1,000.00 $1,024.10 $2.18
Service Chares 2.29% $1,000.00 $1,022.90 $3.44
- -----------------------------------------------------------------------------
(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 0.56% AND 0.81%,
RESPECTIVELY, FOR CASH FUND ORIGINAL SHARES AND SERVICE SHARES, 0.47% AND
0.72%, 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 183/366 (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 SEPTEMBER 30, 2007
HYPOTHETICAL BEGINNING ENDING EXPENSES
ANNUALIZED ACCOUNT ACCOUNT PAID DURING
TOTAL RETURN VALUE VALUE THE PERIOD
- ---------------------------------------------------------------------------
CASH FUND
Original Shares 5.00% $1,000.00 $1,022.20 $2.83
Service Shares 5.00% $1,000.00 $1,020.95 $4.09
- ---------------------------------------------------------------------------
TAX-FREE FUND
Original Shares 5.00% $1,000.00 $1,022.65 $2.38
Service Shares 5.00% $1,000.00 $1,021.40 $3.64
- ---------------------------------------------------------------------------
GOVERNMENT FUND
Original Shares 5.00% $1,000.00 $1,022.85 $2.17
Service Chares 5.00% $1,000.00 $1,021.60 $3.44
- ---------------------------------------------------------------------------
(1) EXPENSES ARE EQUAL TO THE ANNUALIZED EXPENSE RATIO OF 0.56% AND 0.81%,
RESPECTIVELY, FOR CASH FUND ORIGINAL SHARES AND SERVICE SHARES, 0.47% AND
0.72%, 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 183/366 (TO REFLECT THE ONE-HALF YEAR PERIOD).
- --------------------------------------------------------------------------------
RENEWAL OF INVESTMENT ADVISORY AGREEMENT
Renewal until June 30, 2008 of the Investment Advisory Agreement (the
"Advisory Agreement") for each fund between the Trust and the Adviser was
approved by the Board of Trustees and the independent Trustees in June, 2007. At
a meeting called and held for that purpose at which a majority of the
independent Trustees were present in person, the following materials were
considered:
o Copies of the agreements to be renewed;
o A term sheet describing the material terms of the agreements;
o The Annual Report of the Trust for the year ended March 31, 2007;
o A report, prepared by the Adviser and Administrator and provided to
the Trustees in advance of the meeting for the Trustees' review,
containing data about the performance of each of the portfolios and
data about their respective fees, expenses, purchases and
redemptions of capital stock together with comparisons of such data
with similar data about other comparable funds, as well as data as
to the profitability of the Adviser and the Administrator; and
o Quarterly materials reviewed at prior meetings on each portfolio's
performance, operations, portfolio and compliance.
The Trustees considered each Advisory Agreement separately. The Trustees
reviewed materials relevant to, and considered, the following factors as to each
agreement and reached the conclusions described.
THE NATURE, EXTENT, AND QUALITY OF THE SERVICES PROVIDED BY THE ADVISER.
The investment objective of each of the Trust's portfolios is to seek to
provide safety of principal while achieving as a high a level of liquidity and
of current income (and with respect to the Tax-Free Fund, current income exempt
from Federal and Hawaii income taxes). To achieve these objectives, the Adviser
has provided management of each fund's portfolio, as well as provided facilities
for credit analysis of each of the funds' portfolio securities. With respect to
the Government Securities Fund, the Adviser has managed the investment portfolio
in order to achieve a Aaa/AAA rating from both Moody's Investors Service and
Standard and Poor's, respectively.
The Board considered that the Adviser had provided all services the Board
deemed necessary or appropriate, including the specific services that the Board
has determined are required for the Trust, given that its purpose is to provide
shareholders with safety of principal while achieving as a high a level of
liquidity and of current income.
The Board concluded that the services provided were appropriate and
satisfactory and that the Trust would be well served if they continued.
Evaluation of this factor weighed in favor of renewal of the Advisory Agreement.
THE INVESTMENT PERFORMANCE OF THE TRUST (AND EACH OF ITS PORTFOLIOS) AND
ADVISER.
The Board reviewed each aspect of each fund's performance and compared its
performance with that of its respective benchmark. It was noted that the
materials provided by the Administrator indicated that compared to each fund's
respective benchmark, the Trust's portfolios had investment
performance that was either comparable to or favorable for one-, five- and
ten-year periods as compared with the benchmark. The Board considered these
results to be consistent with the purposes of each of the Trust's portfolios.
The Board concluded that the performance of each fund, in light of market
conditions, was satisfactory. Evaluation of this factor indicated to the
Trustees that renewal of each Advisory Agreement would be appropriate.
THE COSTS OF THE SERVICES TO BE PROVIDED AND PROFITS TO BE REALIZED BY THE
ADVISER AND ITS AFFILIATES FROM THE RELATIONSHIP WITH THE TRUST (AND EACH OF ITS
PORTFOLIOS).
The information provided in connection with renewal contained expense data
for each fund and its major local competitor as well as data for each of the
funds with respect to their respective peer groups, including data for money
market funds of a comparable asset size. The materials also showed the
profitability to the Adviser of its services to the Trust.
The Board compared the expense and fee data with respect to each of the
portfolios to similar data about other funds that it found to be relevant. The
Board concluded that the expenses of the each of the portfolios and the fees
paid were similar to and were reasonable as compared to those being paid by its
local competitor and by other money market funds nationwide.
The Board considered that the foregoing indicated the appropriateness of
the costs of the services to the Trust, which was being well managed as
indicated by the factors considered previously.
The Board further concluded that the profitability to the Adviser did not
argue against approval of the fees to be paid under each Advisory Agreement.
THE EXTENT TO WHICH ECONOMIES OF SCALE WOULD BE REALIZED AS THE TRUST, AND
ITS PORTFOLIOS, GROWS.
Data provided to the Trustees showed that the asset size of each of the
portfolios had been generally increasing in recent years. However, they
concluded that the uncertain interest rate environment might make it difficult
to achieve substantial growth in assets in the near future. The Trustees also
noted that the materials indicated that the each portfolio's fees were generally
comparable to those of its peers, including those with breakpoints. Evaluation
of this factor indicated to the Board that each Advisory Agreement should be
renewed without additional breakpoints at this time.
BENEFITS DERIVED OR TO BE DERIVED BY THE ADVISER AND ITS AFFILIATES FROM
THE RELATIONSHIP WITH THE TRUST (AND EACH OF ITS PORTFOLIOS).
The Board observed that, as is generally true of most fund complexes, the
Adviser and its affiliates, by providing services to a number of funds or other
investment clients including the Trust's three portfolios, were able to spread
costs as they would otherwise be unable to do. The Board noted that while that
produces efficiencies and increased profitability for the Adviser and its
affiliates, it also makes their services available to the three portfolios of
the Trust at favorable levels of quality and cost which are more advantageous to
the Trust's portfolios than would otherwise have been possible.
- --------------------------------------------------------------------------------
INFORMATION AVAILABLE (UNAUDITED)
Much of the information that the funds in the Aquila Group of Fundssm
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, 2007 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.
- --------------------------------------------------------------------------------
(THIS PAGE INTENTIONALLY LEFT BLANK)
(THIS PAGE INTENTIONALLY LEFT BLANK)
INVESTMENT ADVISER
Asset Management Group of Bank of Hawaii
P.O. Box 3170 o Honolulu, Hawaii 96802
ADMINISTRATOR
Aquila Investment Management LLC
380 Madison Avenue, Suite 2300 o New York, New York 10017
BOARD OF TRUSTEES
Theodore T. Mason, Chair
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.
Not applilcable.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Not applicable.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES
Not applicable.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable.
ITEM 6. SCHEDULE OF INVESTMENTS.
Included in Item 1 above
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR
CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
Not applicable.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
The Board of Directors of the Registrant has adopted a Nominating
Committee Charter which provides that the Nominating Committee (the 'Committee')
may consider and evaluate nominee candidates properly submitted by shareholders
if a vacancy among the Independent Trustees of the Registrant occurs and if,
based on the Board's then current size, composition and structure, the Committee
determines that the vacancy should be filled. The Committee will consider
candidates submitted by shareholders on the same basis as it considers and
evaluates candidates recommended by other sources. A copy of the qualifications
and procedures that must be met or followed by shareholders to properly submit
a nominee candidate to the Committee may be obtained by submitting a request
in writing to the Secretary of the Registrant.
ITEM 11. CONTROLS AND PROCEDURES.
(a) Based on their evaluation of the registrant's disclosure
controls and procedures (as defined in Rule 30a-2(c) under the
Investment Company Act of 1940) as of a date within 90 days of
the 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)(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
December 5, 2007
By: /s/ Joseph P. DiMaggio
- - -----------------------------------
Chief Financial Officer and Treasurer
December 5, 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
December 5, 2007
By: /s/ Joseph P. DiMaggio
- - -----------------------------------
Joseph P. DiMaggio
Chief Financial Officer and Treasurer
December 5, 2007
CASH ASSETS TRUST
EXHIBIT INDEX
(a) (2) Certifications of principal executive officer
and principal financial officer as required by Rule 30a-2(a)
under the Investment Company Act of 1940.
(b) Certification of chief executive officer and chief financial
officer as required by Rule 30a-2(b) of the Investment Company Act
of 1940.