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: 3/31/08
FORM N-CSR
ITEM 1. REPORTS TO STOCKHOLDERS.
ANNUAL
REPORT
MARCH 31, 2008
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 SAIL 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 SAIL TO
LEFT OF PACIFIC](R) ANNUAL REPORT
May 15, 2008
Dear Investor:
We are pleased to present the Annual Report for The Pacific Capital Funds
of Cash Assets Trust for the fiscal year ended March 31, 2008.
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.
************************************
OVERVIEW
The crisis that affected the financial markets during the later half of
the Trust's recent fiscal year proved to be one of the most challenging periods
for investors in recent times. Indeed, the turmoil in the financial markets may
very well surpass the crises that resulted from Black Monday in October 1987,
the Asian currency crisis in 1997 or the burst of the dot-com bubble of 2000. No
matter what time period people choose to compare this current environment to, it
is evident that we are seeing extraordinary problems being fought by
extraordinary solutions.
THE ECONOMY
Economic growth - as measured by the Gross Domestic Product (GDP) of the
United States - slowed dramatically during the second half of the Trust's recent
fiscal year. The fallout from the housing and sub-prime mortgage markets and the
ensuing worldwide financial crisis weighed heavily on economic activity. By the
end of 2007, the economy had slowed to an anemic 0.6% annualized growth rate
and, for the entire year, GDP growth was only 2.2%. The first quarter of 2008
bore more disappointing economic news, including lackluster retail sales during
the holiday shopping season, further deterioration of housing prices, mounting
foreclosures, weakening consumer confidence and additional sub-prime related
write-down's by banks, financial firms and municipal bond insurance companies.
The ripple effects from the sub-prime mortgage turmoil spread to other sectors
of the economy causing the manufacturing and service sectors to contract, job
growth to weaken and consumer spending to remain stagnant. Indeed, some analysts
claim the U.S. economy is on the brink of a recession - conventionally defined
as two consecutive quarters of negative GDP growth.
MONETARY AND FISCAL POLICY EFFORTS
As the credit crisis continued to unfold during the later half of 2007 and
early 2008, the Federal Reserve (the "Fed") acted swiftly and often, by
injecting liquidity into the banking system, aggressively reducing short-term
interest rates as well as utilizing other less often used monetary tools.
NOT A PART OF THE ANNUAL REPORT
Since mid-2007, the Fed has taken historic steps to reduce the credit
crisis and inject liquidity into the U.S. financial system in an attempt to
bring stability to the financial markets. The Fed slashed the target on the
Federal Funds rate - its benchmark for short-term interest rates and the
interest rate banks charge one another for overnight loans - from 5.25% to
2.25%. (Subsequent to the end of the Trust's report period, the Fed lowered the
Fed Funds rate an additional 0.25% to 2.00% on April 30th.)
Unlike previous financial crises, the Fed did not stop with just lowering
short-term interest rates. Utilizing one of its broadest monetary tools, the
central bank temporarily let investment firms obtain emergency financing from
the Fed, a privilege only previously granted to commercial banks. The Fed
additionally made cash loans to commercial banks and made Treasury securities
available to investment firms. These additional efforts were aimed at bolstering
confidence and allowing firms to be more inclined to lend to one another, other
businesses and consumers.
The action by the Fed was a bold attempt to restore investor confidence
and send a clear signal that the central bank viewed the turbulence and
disruptions as too dangerous to ignore.
In addition, while the Fed was doing its part, Congress passed and
President Bush signed, a $168 billion fiscal stimulus bill that contained
rebates for taxpayers, tax breaks for business and additional assistance for
social security recipients.
There is a concern in the marketplace that the Fed must be ever watchful
that their efforts to revive the credit markets and stimulate economic growth,
through reductions in the Federal Funds rate, don't spur an inflation crisis. We
anticipate that, at some point, the recent monetary and fiscal policy measures
taken will begin to fuel the economy at which time the Fed could potentially
begin raising short-term interest rates in order to avoid a situation of higher
levels of inflation.
It is worth repeating, extraordinary problems are being fought by
extraordinary solutions.
YOUR INVESTMENT
The events of the past nine months should remind investors that a solid
investment strategy - including investments in money market funds - is based on
in-depth credit analysis and a thorough understanding of risk and liquidity.
Indeed, throughout the year, the Asset Management Group of Bank of Hawaii, the
Trust's Investment Adviser, maintained a watchful eye on the creditworthiness of
the securities purchased for each portfolio. By keeping alert to market
opportunities, the Investment Adviser avoided the pitfalls from certain
short-term investment securities that plagued some funds in the money market
industry. Each of the Trust's portfolios continues to provide competitive
returns to alternative short-term investment opportunities without wavering from
their conservative investment guidelines.
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, 2008 and the
related statements of operations for the year then ended, the statements of
changes in net assets for each of the two years in the period then ended, and
the financial highlights for each of the three 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 two 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, 2008, by correspondence with
the custodian and brokers or by other appropriate auditing procedures where
replies from brokers were not received. 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, 2008, the results of
their operations for the year then ended, the changes in their net assets for
each of the two years in the period then ended, and the financial highlights for
each of the three 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 28, 2008
- --------------------------------------------------------------------------------
PACIFIC CAPITAL
CASH ASSETS TRUST
SCHEDULE OF INVESTMENTS
MARCH 31, 2008
PRINCIPAL
AMOUNT COMMERCIAL PAPER (48.5%) VALUE
- --------------- ---------------------------------------------------------------------- -------------
AUTOMOTIVE (4.3%):
$ 20,000,000 Toyota Motor Credit Corp., 3.22%, 04/21/08 ........................... $ 19,964,222
-------------
BANKS (12.9%):
20,000,000 Bank of America, 3.18%, 04/21/08 ..................................... 19,964,667
20,000,000 Barclays US Funding Corp., 3.60%, 07/17/08 ........................... 19,786,000
20,000,000 Citigroup, Inc., 4.35%, 04/08/08 ..................................... 19,983,083
-------------
59,733,750
-------------
BROKERAGE (6.4%):
20,000,000 Merrill Lynch & Co., 3.10%, 05/23/08 ................................. 19,910,444
10,000,000 Morgan Stanley Dean Witter, 2.30%, 12/12/08 .......................... 9,837,083
-------------
29,747,527
-------------
EDUCATION (4.6%):
21,227,000 Stanford University, 2.40%, 05/07/08 ................................. 21,176,055
-------------
FINANCE (7.4%):
20,000,000 American Express Credit Corp., 2.50%, 12/12/08 ....................... 19,645,833
15,000,000 General Electric Capital Corp., 4.47%, 04/18/08 ...................... 14,968,338
-------------
34,614,171
-------------
INSURANCE (8.6%):
20,000,000 MetLife Funding, Inc., 2.85%, 04/04/08 ............................... 19,995,250
20,000,000 Prudential Funding Corp., 2.88%, 04/08/08 ............................ 19,988,800
-------------
39,984,050
-------------
NON BANK CONDUIT (4.3%):
20,000,000 Calyon NA, Inc., 4.37%, 04/07/08 ..................................... 19,985,450
-------------
Total Commercial Paper 225,205,225
-------------
U. S. GOVERNMENT AGENCY OBLIGATIONS (27.0%):
----------------------------------------------------------------------
75,000,000 Federal Home Loan Bank, 4.17%, 05/02/08 .............................. 74,730,688
20,000,000 Federal Home Loan Bank, 2.14%, 08/04/08 .............................. 19,851,389
30,000,000 Federal National Mortgage Association, 4.75%, 03/05/09 ............... 30,789,019
-------------
Total U. S. Government Agency Obligations 125,371,096
-------------
CERTIFICATES OF DEPOSIT (8.6%):
----------------------------------------------------------------------
20,000,000 Societe Generale N.A., Inc., 5.38%, 06/09/08 ......................... 20,000,000
20,000,000 Wells Fargo, 2.53%, 04/29/08 ......................................... 20,000,000
-------------
40,000,000
-------------
PRINCIPAL
AMOUNT CORPORATE BOND (2.2%): VALUE
- --------------- ---------------------------------------------------------------------- -------------
$ 10,000,000 Morgan Stanley, 3.875%, 01/15/09 ..................................... $ 10,043,014
-------------
REPURCHASE AGREEMENTS (13.3%):
----------------------------------------------------------------------
12,000,000 Bank of America, 2.20%, 04/01/08 ..................................... 12,000,000
(Proceeds of $12,000,733 to be received at maturity, Collateral:
$11,701,000 Federal Home Loan Mortgage Corp. 5.87% due
08/21/17; the collateral fair value plus interest receivable
equals $12,320,243)
50,000,000 Barclays Capital, 2.30%, 04/01/08 .................................... 50,000,000
(Proceeds of $50,003,194 to be received at maturity, Collateral:
$49,900,000 Federal National Mortgage Association 5.28%
due 12/12/17; the collateral fair value equals $52,279,565)
Total Repurchase Agreements .......................................... 62,000,000
SHARES INVESTMENT COMPANY (0.4%):
- --------------- ----------------------------------------------------------------------
1,899,066 JP Morgan U.S. Government Money Market Fund, Capital Shares .......... 1,899,066
-------------
Total Investments (Amortized Cost $464,518,401*) .......... 100.0% 464,518,401
Other assets less liabilities ............................. 0.0 18,295
------ -------------
NET ASSETS ................................................ 100.0% $ 464,536,696
====== =============
* Cost for Federal income tax and financial reporting purposes is identical.
PERCENT OF
PORTFOLIO DISTRIBUTION (UNAUDITED) PORTFOLIO
---------------------------------- ---------
Commercial Paper .......................................... 48.5%
U. S. Government Agency Obligations ....................... 27.0
Certificates of Deposit ................................... 8.6
Corporate Bond ............................................ 2.2
Repurchase Agreements ..................................... 13.3
Investment Company ........................................ 0.4
------
100.0%
======
See accompanying notes to financial statements.
RATING
PRINCIPAL MOODY'S/
AMOUNT MUNICIPAL SECURITIES (95.3%): S&P VALUE
- --------------- -------------------------------------------------------- -------- --------------
ARIZONA (0.5%):
Maricopa County, AZ School District No. 006
$ 1,000,000 4.125%, 07/01/08 ....................................... Aaa/AAA $ 1,004,839
Tucson, AZ Industrial Development Authority,
Weekly Reset VRDO*
425,000 2.250%, 07/15/31 ....................................... Aaa/NR4 425,000
--------------
1,429,839
--------------
CALIFORNIA (1.3%):
ABAG Financial Authority for Nonprofit Corps.
California Multi-Family Revenue Bond,
Prerefunded to 07/01/08 @102, AMT
1,010,000 5.500%, 07/01/19 ....................................... NR/AAA 1,035,309
Upland, CA Housing Authority Multi-Family,
Weekly Reset VRDO*
2,860,000 1.950%, 09/01/28 ....................................... Aaa/NR 2,860,000
--------------
3,895,309
--------------
COLORADO (3.8%):
Colorado Educational & Cultural Facilities Authority
Revenue - National Jewish Federation Series A4,
Daily Reset VRDO*
5,105,000 1.300%, 02/01/34 ....................................... Aaa/NR 5,105,000
1,700,000 1.300%, 02/01/35 ....................................... Aaa/NR 1,700,000
Colorado Housing & Finance Authority
Revenue Bond, Class I, Series A-1, Weekly
Reset VRDO*, SPA: FHLB
4,360,000 2.200%, 10/01/30 ....................................... VMIG1/A-1+ 4,360,000
--------------
11,165,000
--------------
DISTRICT OF COLUMBIA (0.7%):
District of Columbia, Prerefunded to 09/01/08 @101,
Collateral: State and Local Government Series (100%)
2,060,000 5.250%, 06/01/27 ....................................... Aaa/AAA 2,094,817
--------------
GEORGIA (0.4%):
Atlanta, GA Water & Wastewater Revenue
1,200,000 1.350%, 11/01/41, Daily Reset VRDO* .................... Aaa/AAA 1,200,000
--------------
HAWAII (32.9%):
City and County Honolulu, HI, Commercial Paper
7,600,000 1.750%, 06/16/08 ....................................... P-1/A1+ 7,600,000
RATING
PRINCIPAL MOODY'S/
AMOUNT MUNICIPAL SECURITIES (CONTINUED): S&P VALUE
- --------------- -------------------------------------------------------- -------- --------------
HAWAII (CONTINUED):
City and County Honolulu, HI GO Bond
$ 3,600,000 7.350%, 07/01/08 ....................................... Aa2/A $ 3,652,009
City & County Honolulu, HI, GO Bond, Series B,
MBIA Insured
200,000 5.000%, 07/01/08 ....................................... Aaa/AAA 200,573
City & County Honolulu, HI ,
Prerefunded to 09/01/08 @101,
Collateral: U.S. Government Securities
1,670,000 5.625%, 09/01/13 ....................................... Aa2/A 1,696,927
Hawaii County, HI, Series A
5,170,000 5.500%, 05/01/08 ....................................... A1/A+ 5,185,072
Hawaii State, Series CH, FGIC Insured TCRS
3,390,000 6.000%, 11/01/08 ....................................... Aa2/A 3,480,069
Hawaii State, Series CR,
Prerefunded to 04/01/08 @101,
Collateral: State and Local Government Series
1,000,000 5.250%, 04/01/13 ....................................... Aaa/AAA 1,010,000
5,000,000 5.000%, 04/01/16 ....................................... Aaa/AAA 5,050,000
9,600,000 5.000%, 04/01/17 ....................................... Aaa/AAA 9,696,000
Hawaii State Department of Budget and Finance,
Special Purpose Revenue Bond (Queens Health
Systems) Series B,Prerefunded to 07/01/08 @101,
Collateral: Treasury Strips
750,000 5.250%, 07/01/11 ....................................... Aaa/AAA 764,519
10,500,000 5.250%, 07/01/23 ....................................... Aaa/AAA 10,811,911
Hawaii State Department of Budget and Finance
Special Purpose Revenue Bond (Palama Meat
Company) Series A, Weekly Reset VRDO*,
Wells Fargo Insured, AMT
6,500,000 2.200%, 10/31/29 ....................................... NR/AAA 6,500,000
RATING
PRINCIPAL MOODY'S/
AMOUNT MUNICIPAL SECURITIES (CONTINUED): S&P VALUE
- --------------- -------------------------------------------------------- -------- --------------
HAWAII (CONTINUED):
Hawaii State Department of Budget and Finance
Special Purpose Revenue Bond (Queens Health
Systems) Series C, Weekly Reset VRDO*,
SPA: Bank of America N.A., AMBAC Insured
$ 25,050,000 4.250%, 07/01/28 ....................................... MIG1/AAA $ 25,050,000
Hawaii State GO Bond, Series CR, MBIA Insured, ETM
2,015,000 5.750%, 04/01/08 ....................................... Aaa/AAA 2,015,000
Hawaii State, GO Bond, Series CR, MBIA Insured,
Prerefunded to 04/01/08 @101, Collateral:
U.S. Government Securities
700,000 5.250%, 04/01/12 ....................................... Aaa/AAA 707,000
1,050,000 4.750%, 04/01/18 ....................................... Aaa/AAA 1,060,500
Hawaii State, GO Bond, Series CS, MBIA Insured
4,000,000 5.000%, 04/01/08 ....................................... Aaa/AAA 4,000,000
Hawaii State, GO Bond, Series CZ, FSA Insured
1,000,000 5.000%, 07/01/08 ....................................... Aaa/AAA 1,003,247
Hawaii State, GO Bond, Series DB
1,000,000 4.000%, 09/01/08 ....................................... Aaa/AAA 1,001,291
Hawaii State Highway Revenue,
Prerefunded to 7/1/08@101
Collateral: State & Local Government Series 100%
1,000,000 5.250%, 07/01/14 ....................................... Aa3/AA+ 1,018,664
Hawaii State Highway Revenue, FGIC Insured
Prerefunded to 07/01/08 @101
1,100,000 5.000%, 07/01/16 ....................................... Aaa/AAA 1,114,494
Hawaiian Home Lands Department Hawaii Revenue,
GO Bond ETM Collateral U.S.
Government Securities
1,310,000 4.150%, 07/01/08 ....................................... A3/NR 1,318,449
Kauai County, HI, Series C
1,355,000 5.900%, 08/01/08 ....................................... Aaa/AAA 1,375,063
Maui County, HI, GO
2,000,000 6.000%, 12/15/08 ....................................... Aa2/A 2,054,868
--------------
97,365,656
--------------
RATING
PRINCIPAL MOODY'S/
AMOUNT MUNICIPAL SECURITIES (CONTINUED): S&P VALUE
- --------------- -------------------------------------------------------- -------- --------------
ILLINOIS (2.9%):
Peoria County, IL Community Unit School
District No. 323, GO Bond Weekly
Reset VRDO*, FSA Insured
$ 6,650,000 2.200%, 04/01/26 ....................................... Aaa/NR $ 6,650,000
Romeoville, IL Revenue Bond, Daily Reset VRDO*
2,100,000 1.300%, 10/01/36 ....................................... Aaa/NR 2,100,000
--------------
8,750,000
--------------
MASSACHUSETTS (2.0%):
Massachusetts State GO Bond, Daily Reset VRDO*
6,000,000 1.470%, 03/01/26 ....................................... Aa2/AA 6,000,000
--------------
MICHIGAN (1.5%):
Macomb Township, MI Building Authority, Revenue
Bond, FGIC Insured, Prerefunded to 04/01/08
@101, Collateral: State & Local Government
Series 100%
1,000,000 6.000%, 04/01/27 ....................................... Aaa/AAA 1,010,000
Michigan Higher Education Facility Authority,
Hope College, Daily Reset VRDO*
665,000 1.300%, 11/01/36 ....................................... Aa2/NR 665,000
Michigan State Hospital Finance Authority Revenue,
St. John
1,365,000 6.000%, 05/15/08 ....................................... Aaa/AAA 1,366,961
Michigan State Hospital Financial Authority Revenue
Bond, Daily Reset VRDO*
1,315,000 1.250%, 11/01/18 ....................................... Aa2/AA 1,315,000
--------------
4,356,961
--------------
MINNESOTA (5.5%):
Bloomington, MN Multi-Family Revenue, Weekly
Reset VRDO*
3,000,000 2.250%, 11/15/32 ....................................... Aaa/NR 3,000,000
Inver Grove Heights, MN Senior, Weekly Reset VRDO*
1,595,000 2.250%, 05/15/35 ....................................... Aaa/NR 1,595,000
RATING
PRINCIPAL MOODY'S/
AMOUNT MUNICIPAL SECURITIES (CONTINUED): S&P VALUE
- --------------- -------------------------------------------------------- -------- --------------
MINNESOTA (CONTINUED):
Oak Park Heights, MN Multi-Family Revenue Bond,
Weekly Reset VRDO*, Federal Home Loan
Mortgage Corp. Insured
$ 6,415,000 2.250%, 11/01/35 ....................................... Aaa/NR $ 6,415,000
Plymouth, MN Multi-Family Housing, Weekly
Reset VRDO*
1,395,000 2.250%, 04/15/33 ....................................... Aaa/NR 1,395,000
St. Louis Park, MN Multi-Family Revenue Bond,
Weekly Reset VRDO*, Federal Home Loan
Mortgage Corp. Insured
4,000,000 2.250%, 08/01/34 ....................................... Aaa/NR 4,000,000
--------------
16,405,000
--------------
MISSOURI (15.8%):
Kansas City, MO Industrial Development Authority
Multi-Family - Gatehouse Apartments Project,
Weekly Reset VRDO*
600,000 2.250%, 11/15/26 ....................................... Aaa/NR 600,000
Kansas City, MO Industrial Development Authority
Revenue Bond, (Ewing Marion Kaufman
Foundation), Daily Reset VRDO*
10,860,000 1.300%, 04/01/27 ....................................... NR/A-1+ 10,860,000
Missouri State Development Financial Board Lease
Revenue Bond, Daily Reset VRDO*
5,520,000 1.300%, 06/01/33 ....................................... Aa1/NR 5,520,000
Missouri State Health & Educational Facilities
SSM Health Care Series C-1, Daily Reset VRDO*
2,525,000 1.350%, 06/01/19 ....................................... Aaa/AAA 2,525,000
Missouri State Health & Educational Facilities
Authority Revenue Bond, Daily Reset VRDO*
3,800,000 1.300%, 06/01/26 ....................................... NR/AAA 3,800,000
Missouri State Health & Educational Facilities
Authority Revenue Bond, Daily Reset VRDO*
3,500,000 1.300%, 11/01/32 ....................................... NR/AA+ 3,500,000
RATING
PRINCIPAL MOODY'S/
AMOUNT MUNICIPAL SECURITIES (CONTINUED): S&P VALUE
- --------------- -------------------------------------------------------- -------- --------------
MISSOURI (CONTINUED):
Missouri State, Health & Educational Facilities
Authority Revenue Bond (St. Louis University),
Series B, Daily Reset VRDO*,
SPA: Bank of America N.A.
$ 6,550,000 1.330%, 10/01/24 ....................................... VMIG1/A-1+ $ 6,550,000
Missouri State, Health & Educational Facilities
Authority Revenue Bond (Washington University),
Series B, SPA: JPMorgan Chase Bank NA,
Daily Reset VRDO*
6,000,000 1.200%, 03/01/40 ....................................... VMIG1/A-1+ 6,000,000
Missouri State Health & Educational Facilities
Authority Educational Facilities Revenue Bond,
St. Louis University,
SPA: US Bank NA, Daily Reset VRDO*
730,000 1.330%, 07/01/32 ....................................... A1/NR 730,000
Missouri State Health & Educational Facilities
Authority Revenue Bond, Washington University,
Series A, SPA: Dexia Credit Local,
Daily Reset VRDO*
3,250,000 1.200%, 02/15/34 ....................................... Aaa/AAA 3,250,000
University of Missouri Revenues System Facilities
Series A, Daily Reset VRDO*
1,300,000 1.250%, 11/01/31 ....................................... Aa2/AA 1,300,000
University of Missouri University System Facilities
Revenue Bond, Series B, Daily Reset VRDO*
2,300,000 1.250%, 11/01/30 ....................................... VMIG1/A-1+ 2,300,000
--------------
46,935,000
--------------
NEVADA (6.7%):
Henderson, NV Health Care Facilities Revenue Bond,
Prerefunded to 07/01/08 @101
1,670,000 5.250%, 07/01/18 ....................................... A2/A 1,696,192
Nevada State, Prerefunded Securities/Escrow
18,000,000 4.750%, 05/15/26 ....................................... Aaa/AAA 18,052,982
--------------
19,749,174
--------------
RATING
PRINCIPAL MOODY'S/
AMOUNT MUNICIPAL SECURITIES (CONTINUED): S&P VALUE
- --------------- -------------------------------------------------------- -------- --------------
NEW YORK (3.8%):
Long Island, NY Power Authority Revenue Bond,
Series 1A, Weekly Reset VRDO*, LOC:80%
Bayerische Landesbank; 20% Landesbank
Baden-Wurttemberg
$ 9,000,000 2.200%, 05/01/33 ....................................... VMIG1/A-1+ $ 9,000,000
New York State Housing Financial Agency Revenue
2,200,000 2.100%, 05/15/34, Weekly Reset VRDO* ................... Aaa/NR 2,200,000
--------------
11,200,000
--------------
NORTH CAROLINA (5.7%):
Concord, NC Utility Systems Revenue Bond,
Series B, Weekly Reset VRDO*,
SPA: Wachovia Bank, FSA Insured
9,720,000 2.050%, 12/01/22 ....................................... VMIG1/NR 9,720,000
Durham, NC Public Improvement Project GO Bond,
Weekly Reset VRDO*,
SPA: Wachovia Bank of North Carolina
1,425,000 2.100%, 02/01/09 ....................................... VMIG1/A-1+ 1,425,000
2,975,000 2.100%, 02/01/11 ....................................... VMIG1/A-1+ 2,975,000
1,270,000 2.100%, 02/01/12 ....................................... VMIG1/A-1+ 1,270,000
1,475,000 2.100%, 02/01/13 ....................................... VMIG1/A-1+ 1,475,000
--------------
16,865,000
--------------
PENNSYLVANIA (1.1%):
Philadelphia, PA Hospitals and Higher Education
Revenue Bond, Daily Reset VRDO*
3,150,000 1.250%, 07/01/25 ....................................... Aa2/AA 3,150,000
--------------
SOUTH CAROLINA (1.9%):
South Carolina Educational Facility Authority, Daily
Reset VRDO*
5,755,000 1.200%, 10/01/39 ....................................... A1/NR 5,755,000
--------------
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 758,503
--------------
RATING
PRINCIPAL MOODY'S/
AMOUNT MUNICIPAL SECURITIES (CONTINUED): S&P VALUE
- --------------- -------------------------------------------------------- -------- --------------
TEXAS (2.7%):
Harris County, TX Health Facilities Development,
Daily Reset VRDO*
$ 800,000 1.300%, 05/15/29 ....................................... Aaa/AAA $ 800,000
Harris County, TX Revenue Bond,
Prerefunded to 08/01/08 @100
3,000,000 5.000%, 08/01/33 ....................................... Aa1/AA+ 3,020,375
Travis County, TX Housing Financial Corp., Weekly
Reset VRDO*
4,100,000 2.250%, 12/15/29 ....................................... Aaa/NR4, 4,100,000
--------------
7,920,375
--------------
VIRGINIA (2.5%):
University of Virginia Revenue Bond, Series A,
Weekly Reset VRDO*
7,315,000 2.050%, 06/01/34 ....................................... VMIG1/A-1+ 7,315,000
--------------
WEST VIRGINIA (0.3%):
West Virginia State GO Bond, Prerefunded to
06/01/08 @101, FGIC Insured
1,000,000 5.250%, 06/01/12 ....................................... Aaa/AAA 1,012,984
--------------
PUERTO RICO (3.0%):
Puerto Rico Commonwealth GO Bond, Daily Reset
VRDO*, FSA Insured
3,000,000 1.100%, 07/01/29 ....................................... Aaa/AAA 3,000,000
Puerto Rico Commonwealth Highway & Transportation
Authority Transportation Revenue Prerefunded
Series A, Revenue Bond, AMBAC Insured,
Prerefunded to 07/01/08 @101, Collateral:
State & Local Government Series 100%
4,860,000 5.000%, 07/01/28 ....................................... Aaa/AAA 4,934,155
Puerto Rico Electric Power Authority Power Revenue
Bond, Series DD, FSA Insured,
Prerefunded to 07/01/08 @101.50
1,000,000 5.000%, 07/01/28 ....................................... Aaa/AAA 1,018,586
--------------
8,952,741
--------------
PRINCIPAL
AMOUNT U.S. GOVERNMENT AGENCY (3.4%): VALUE
- --------------- -------------------------------------------------------- --------------
Federal Home Loan Bank
$ 10,000,000 2.380%, 04/09/08 ....................................... $ 9,994,711
--------------
SHARES INVESTMENT COMPANIES (1.7%):
- --------------- --------------------------------------------------------
5,173,000 Dreyfus Tax-Exempt Cash Management
Money Market, Institutional Shares .................. 5,173,000
--------------
Total Investments (Amortized Cost $297,444,070**) ...... 100.4% 297,444,070
Other assets less liabilities .......................... (0.4) (1,316,413)
------ --------------
NET ASSETS ............................................. 100.0% $ 296,127,657
====== ==============
* 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)
PERCENT OF
PORTFOLIO
---------
Arizona 0.5%
California 1.3
Colorado 3.8
District of Columbia 0.7
Georgia 0.4
Hawaii 32.7
Illinois 2.9
Massachusetts 2.0
Michigan 1.4
Minnesota 5.5
Missouri 15.8
Nevada 6.6
New York 3.8
North Carolina 5.7
Pennsylvania 1.1
Puerto Rico 3.0
South Carolina 1.9
Tennessee 0.3
Texas 2.7
Virginia 2.5
West Virginia 0.3
U.S. Government Agency 3.4
Investment Companies 1.7
---------
100.0%
=========
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
TCRS - Transferable Custodial Receipts
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, 2008
PRINCIPAL
AMOUNT U.S. GOVERNMENT AGENCIES (100.1%) VALUE
- --------------- ----------------------------------------------------------- -------------
FEDERAL FARM CREDIT BANK (5.3%):
$ 100,000,000 3.60%, 04/01/08 ........................................... $ 101,250,259
--------------
FEDERAL HOME LOAN BANK (94.8%):
57,000,000 1.50%, 04/01/08 ........................................... 57,000,000
88,000,000 4.09%, 04/02/08 ........................................... 87,990,002
225,000,000 3.06%, 04/04/08 ........................................... 224,942,562
85,000,000 3.72%, 04/11/08 ........................................... 84,912,167
40,450,000 3.62%, 04/16/08 ........................................... 40,388,988
135,000,000 3.60%, 04/18/08 ........................................... 134,770,500
160,000,000 2.05%, 04/21/08 ........................................... 159,817,778
250,000,000 2.05%, 04/23/08 ........................................... 249,686,500
100,000,000 2.77%, 04/25/08 ........................................... 99,815,333
50,000,000 2.05%, 04/28/08 ........................................... 49,923,125
109,601,000 2.65%, 04/30/08 ........................................... 109,367,032
100,000,000 2.64%, 05/02/08 ........................................... 99,773,097
200,000,000 2.26%, 05/14/08 ........................................... 199,460,111
50,000,000 2.10%, 05/23/08 ........................................... 49,848,333
80,000,000 2.14%, 08/04/08 ........................................... 79,405,556
80,000,000 1.96%, 08/29/08 ........................................... 79,346,667
--------------
1,806,447,751
--------------
Total U.S. Government Agencies ......................... 1,907,698,010
--------------
SHARES INVESTMENT COMPANY (0.0%)
- --------------- -----------------------------------------------------------
701,147 JP Morgan U.S. Government Money Market Fund, Capital Shares 701,147
--------------
Total Investments (Amortized Cost $1,908,399,157*) 100.1% 1,908,399,157
Other assets less liabilities .................... (0.1) (1,927,200)
------ --------------
NET ASSETS ....................................... 100.0% $1,906,471,957
====== ==============
* Cost for Federal income tax and financial reporting purposes is identical.
PERCENT OF
PORTFOLIO DISTRIBUTION (UNAUDITED) PORTFOLIO
---------------------------------- ---------
U.S. Government Agencies ......................... 100.0%
Investment Company ............................... 0.0
------
100.0%
======
See accompanying notes to financial statements.
THE PACIFIC CAPITAL FUNDS
OF CASH ASSETS TRUST
STATEMENTS OF ASSETS AND LIABILITIES
MARCH 31, 2008
Cash Tax-Free Government
Fund Fund Fund
-------------- -------------- --------------
ASSETS:
Investments at value and amortized cost (note 2) ........ $ 402,518,401 $ 297,444,070 $1,908,399,157
Repurchase agreements (note 2) .......................... 62,000,000 -- --
Cash .................................................... -- 2,040 --
Interest receivable ..................................... 1,087,358 2,226,402 779,329
Other assets ............................................ 12,768 7,012 46,772
-------------- -------------- --------------
Total Assets ......................................... 465,618,527 299,679,524 1,909,225,258
-------------- -------------- --------------
LIABILITIES:
Payable for security purchased .......................... -- 3,050,000 --
Dividends payable ....................................... 780,400 368,219 1,810,682
Adviser and Administrator fees payable .................. 194,749 100,550 661,353
Distribution fees payable ............................... 29,997 15,962 235,992
Accrued expenses ........................................ 76,685 17,136 45,274
-------------- -------------- --------------
Total Liabilities .................................... 1,081,831 3,551,867 2,753,301
-------------- -------------- --------------
NET ASSETS .............................................. $ 464,536,696 $ 296,127,657 $1,906,471,957
============== ============== ==============
NET ASSETS CONSIST OF:
Capital Stock - Authorized an unlimited number of shares,
par value $0.01 per share ............................ $ 4,645,223 $ 2,961,151 $ 19,064,017
Additional paid-in capital .............................. 459,890,293 293,156,153 1,887,406,069
Undistributed net investment income ..................... -- 10,336 --
Accumulated net realized gain (loss) on investments ..... 1,180 17 1,871
-------------- -------------- --------------
$ 464,536,696 $ 296,127,657 $1,906,471,957
============== ============== ==============
SHARES OF BENEFICIAL INTEREST:
Original Shares Class:
Net Assets ........................................... $ 323,257,348 $ 225,119,771 $ 807,969,001
============== ============== ==============
Shares outstanding ................................... 323,475,708 225,109,766 807,939,204
============== ============== ==============
Net asset value per share ............................ $ 1.00 $ 1.00 $ 1.00
============== ============== ==============
Service Shares Class:
Net Assets ........................................... $ 141,279,348 $ 71,007,886 $1,098,502,956
============== ============== ==============
Shares outstanding ................................... 141,046,598 71,005,355 1,098,462,481
============== ============== ==============
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, 2008
Cash Tax-Free Government
Fund Fund Fund
-------------- -------------- --------------
INVESTMENT INCOME:
Interest income .................................. $ 20,793,426 $ 8,655,585 $ 86,348,186
-------------- -------------- --------------
EXPENSES:
Investment Adviser fees (note 3) ................. 1,531,627 808,526 6,120,103
Administrator fees (note 3) ...................... 627,241 240,599 1,341,856
Distribution fees (note 3) ....................... 350,675 174,056 2,737,670
Trustees' fees and expenses ...................... 98,491 67,112 222,686
Fund accounting fees ............................. 37,578 36,523 37,002
Registration fees and dues ....................... 34,401 3,400 44,906
Insurance ........................................ 34,023 16,502 120,128
Auditing and tax fees ............................ 17,500 17,500 17,500
Legal fees (note 3) .............................. 17,239 16,977 75,239
Transfer and shareholder servicing agent fees .... 11,621 10,888 10,552
Shareholders' reports ............................ 10,730 2,299 12,140
Custodian fees (note 5) .......................... 6,689 10,875 8,233
Chief Compliance Officer (note 3) ................ 4,557 4,557 4,557
Miscellaneous .................................... 10,667 6,062 29,872
-------------- -------------- --------------
Total expenses ................................... 2,793,039 1,415,876 10,782,444
Expenses paid indirectly (note 5) ................ (13,224) (6,391) (5,779)
-------------- -------------- --------------
Net expenses ........................................ 2,779,815 1,409,485 10,776,665
-------------- -------------- --------------
Net investment income ............................... 18,013,611 7,246,100 75,571,521
Net realized gain (loss) from securities transactions -- 17 --
-------------- -------------- --------------
Net change in net assets resulting from operations .. $ 18,013,611 $ 7,246,117 $ 75,571,521
============== ============== ==============
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
------------------------------ ------------------------------ ------------------------------
Year Ended Year Ended Year Ended Year Ended Year Ended Year Ended
March 31, 2008 March 31, 2007 March 31, 2008 March 31, 2007 March 31, 2008 March 31, 2007
-------------- -------------- -------------- -------------- -------------- --------------
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income .......... $ 18,013,611 $ 21,770,080 $ 7,246,100 $ 6,389,796 $ 75,571,521 $ 62,145,714
Net realized gain (loss)
from securities transactions . -- -- 17 237 -- 340
-------------- -------------- -------------- -------------- -------------- --------------
Net change in net assets
resulting from operations .... 18,013,611 21,770,080 7,246,117 6,390,033 75,571,521 62,146,054
-------------- -------------- -------------- -------------- -------------- --------------
DIVIDENDS TO SHAREHOLDERS
FROM NET INVESTMENT INCOME:
Original Shares .............. (12,330,517) (13,877,905) (5,399,668) (4,219,673) (32,166,752) (22,368,853)
Service Shares ............... (5,683,094) (7,892,175) (1,818,985) (2,197,571) (43,404,769) (39,776,861)
-------------- -------------- -------------- -------------- -------------- --------------
Total dividends to
shareholders from net
investment income ......... (18,013,611) (21,770,080) (7,218,653) (6,417,244) (75,571,521) (62,145,714)
-------------- -------------- -------------- -------------- -------------- --------------
CAPITAL SHARE TRANSACTIONS
(at $1.00 per share):
Proceeds from shares sold:
Original Shares .............. 562,646,046 729,865,243 284,550,654 230,204,313 1,643,427,314 1,604,790,944
Service Shares ............... 528,686,800 633,141,409 102,239,090 130,614,157 2,659,302,311 3,243,154,899
-------------- -------------- -------------- -------------- -------------- --------------
1,091,332,846 1,363,006,652 386,789,744 360,818,470 4,302,729,625 4,847,945,843
-------------- -------------- -------------- -------------- -------------- --------------
Reinvested dividends:
Original Shares .............. 208,192 307,349 33,682 45,489 191,143 175,409
Service Shares ............... 5,683,053 7,891,836 1,818,753 2,197,555 43,404,774 39,776,852
-------------- -------------- -------------- -------------- -------------- --------------
5,891,245 8,199,185 1,852,435 2,243,044 43,595,917 39,952,261
-------------- -------------- -------------- -------------- -------------- --------------
Cost of shares redeemed:
Original Shares .............. (526,645,395) (728,327,507) (230,094,077) (192,184,780) (1,520,979,513) (1,349,057,009)
Service Shares ............... (558,678,949) (645,130,780) (121,406,410) (137,479,845) (2,683,075,444) (3,091,306,685)
-------------- -------------- -------------- -------------- -------------- --------------
(1,085,324,344) (1,373,458,287) (351,500,487) (329,664,625) (4,204,054,957) (4,440,363,694)
-------------- -------------- -------------- -------------- -------------- --------------
Change in net assets
from capital share
transactions ................. 11,899,747 (2,252,450) 37,141,692 33,396,889 142,270,585 447,534,410
-------------- -------------- -------------- -------------- -------------- --------------
Total change in net assets ..... 11,899,747 (2,252,450) 37,169,156 33,369,678 142,270,585 447,534,750
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* ............. $ 464,536,696 $ 452,636,949 $ 296,127,657 $ 258,958,501 $1,906,471,957 $1,764,201,372
============== ============== ============== ============== ============== ==============
* Includes undistributed
(distributions in excess of) net
investment income of: $ -- $ -- $ 10,336 $ (17,111) $ -- $ --
============== ============== ============== ============== ============== ==============
See accompanying notes to financial statements.
THE PACIFIC CAPITAL FUNDS
OF CASH ASSETS TRUST
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2008
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. FASB Interpretation No. 48 "Accounting for Uncertainty
in Income Taxes" ("FIN 48") was adopted on September 28, 2007. Management
has reviewed the tax positions for each of the open tax years (2004-2008)
and has determined that the implementation of FIN 48 did not have a
material impact on the Fund's financial statements.
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. There were no reclassifications for
the year ended March 31, 2008.
i) ACCOUNTING PRONOUNCEMENTS: 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,
2008.
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, 2008, the following amounts of $607 Cash
Fund; $382 Tax-Free Fund; $2,097 Government Fund were incurred for legal fees
allocable to Hollyer Brady Barrett & Hines LLP ("Hollyer Brady") and Cash Fund
$15,959; Tax-Free Fund $16,462; Government Fund $72,343 to its successor, Butzel
Long PC, counsel to the Trust, for legal services in conjunction with the
respective Funds' ongoing operations. 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 2008 and 2007 were as
follows:
Cash Fund Tax-Free Fund Government Fund
-------------------------- -------------------------- --------------------------
2008 2007 2008 2007 2008 2007
----------- ----------- ----------- ----------- ----------- -----------
Ordinary income ..... $18,391,172 $21,537,828 $ 17 $ 10,100 $76,602,203 $60,709,774
Net tax-exempt income -- -- 7,290,811 6,253,366 -- --
Capital gain ........ -- -- -- -- -- --
----------- ----------- ----------- ----------- ----------- -----------
Total ............... $18,391,172 $21,537,828 $ 7,290,828 $ 6,263,466 $76,602,203 $60,709,744
=========== =========== =========== =========== =========== ===========
As of March 31, 2008, the components of distributable earnings on a tax
basis were as follows:
Tax-Free Government
Cash Fund Fund Fund
------------- ------------- -------------
Undistributed ordinary income . $ 781,580 $ -- $ 1,812,553
Undistributed tax exempt income -- 378,572 --
Accumulated net realized loss
on investments .............. -- -- --
------------- ------------- -------------
$ 781,580 $ 378,572 $ 1,812,553
============= ============= =============
8. RECENT DEVELOPMENT
In May, 2007, the U. S. Supreme Court agreed to hear an appeal in
DEPARTMENT OF REVENUE OF KENTUCKY V. DAVIS, a case concerning the
constitutionality of differential tax treatment for interest from in-state vs.
out-of-state municipal securities, a practice which is common among the majority
of the states. On May 19, 2008, the U. S. Supreme Court upheld the right of
states to tax interest on out-of-state municipal bonds while exempting their own
state's bond interest from taxation. The U.S. Supreme Court said differential
tax treatment for interest from in-state vs. out-of-state municipal securities
does not decriminate against interstate commerce, but rather promotes the
financing of essential governmental services.
PACIFIC CAPITAL
CASH ASSETS TRUST
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
ORIGINAL SHARES
---------------------------------------------------------------------
Year Ended March 31,
---------------------------------------------------------------------
2008 2007 2006 2005 2004
--------- --------- --------- --------- ---------
Net asset value, beginning of period .................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
--------- --------- --------- --------- ---------
Income from investment operations:
Net investment income+ ............................... 0.043 0.046 0.032 0.014 0.009
--------- --------- --------- --------- ---------
Less distributions:
Dividends from net investment income ................. (0.043) (0.046) (0.032) (0.014) (0.009)
--------- --------- --------- --------- ---------
Net asset value, end of period .......................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
========= ========= ========= ========= =========
Total return ............................................ 4.35% 4.75% 3.20% 1.36% 0.90%
Ratios/supplemental data
Net assets, end of period (in millions) .............. $ 323 $ 287 $ 286 $ 366 $ 287
Ratio of expenses to average net assets .............. 0.57% 0.57% 0.58% 0.37% 0.21%
Ratio of net investment income to
average net assets ...................... 4.23% 4.65% 3.09% 1.39% 0.90%
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%
Ratio of net investment income to
average net assets ................................. ++ ++ ++ 1.19% 0.54%
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%#
SERVICE SHARES
---------------------------------------------------------------------
Year Ended March 31,
---------------------------------------------------------------------
2008 2007 2006 2005 2004
--------- --------- --------- --------- ---------
Net asset value, beginning of period .................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
--------- --------- --------- --------- ---------
Income from investment operations:
Net investment income+ ............................... 0.040 0.044 0.029 0.011 0.007
--------- --------- --------- --------- ---------
Less distributions:
Dividends from net investment income ................. (0.040) (0.044) (0.029) (0.011) (0.007)
--------- --------- --------- --------- ---------
Net asset value, end of period .......................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
========= ========= ========= ========= =========
Total return ............................................ 4.09% 4.49% 2.94% 1.11% 0.65%
Ratios/supplemental data
Net assets, end of period (in millions) .............. $ 141 $ 166 $ 169 $ 166 $ 119
Ratio of expenses to average net assets .............. 0.82% 0.82% 0.83% 0.61% 0.46%
Ratio of net investment income to
average net assets ...................... 3.98% 4.40% 2.91% 1.12% 0.65%
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%
Ratio of net investment income to
average net assets ................................. ++ ++ ++ 0.91% 0.29%
The expense ratios after giving effect to the expense offset for uninvested cash balances were:
Ratio of expenses to average net assets ............ 0.81% 0.81% 0.83% 0.61%# 0.46%#
- ----------
+ 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,
---------------------------------------------------------------------
2008 2007 2006 2005 2004
--------- --------- --------- --------- ---------
Net asset value, beginning of period .................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
--------- --------- --------- --------- ---------
Income from investment operations:
Net investment income+ ............................... 0.029 0.030 0.022 0.011 0.008
--------- --------- --------- --------- ---------
Less distributions:
Dividends from net investment income ................. (0.029) (0.030) (0.022) (0.011) (0.008)
--------- --------- --------- --------- ---------
Net asset value, end of period .......................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
========= ========= ========= ========= =========
Total return ............................................ 2.90% 3.09% 2.21% 1.16% 0.84%
Ratios/supplemental data
Net assets, end of period (in millions) .............. $ 225 $ 171 $ 133 $ 134 $ 99
Ratio of expenses to average net assets .............. 0.47% 0.50% 0.50% 0.29% 0.17%
Ratio of net investment income to
average net assets ................................. 2.80% 3.04% 2.20% 1.17% 0.84%
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%
Ratio of net investment income to
average net assets ................................. ++ ++ ++ 0.96% 0.50%
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%#
SERVICE SHARES
---------------------------------------------------------------------
Year Ended March 31,
---------------------------------------------------------------------
2008 2007 2006 2005 2004
--------- --------- --------- --------- ---------
Net asset value, beginning of period .................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
--------- --------- --------- --------- ---------
Income from investment operations:
Net investment income+ ............................... 0.026 0.028 0.019 0.009 0.006
--------- --------- --------- --------- ---------
Less distributions:
Dividends from net investment income ................. (0.026) (0.028) (0.019) (0.009) (0.006)
--------- --------- --------- --------- ---------
Net asset value, end of period .......................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
========= ========= ========= ========= =========
Total return ............................................ 2.64% 2.83% 1.96% 0.90% 0.59%
Ratios/supplemental data
Net assets, end of period (in millions) .............. $ 71 $ 88 $ 93 $ 72 $ 50
Ratio of expenses to average net assets .............. 0.72% 0.75% 0.75% 0.53% 0.42%
Ratio of net investment income to
average net assets ................................. 2.55% 2.78% 1.94% 0.92% 0.59%
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%
Ratio of net investment income to
average net assets ................................. ++ ++ ++ 0.71% 0.25%
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%#
- ----------
+ 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,
---------------------------------------------------------------------
2008 2007 2006 2005 2004
--------- --------- --------- --------- ---------
Net asset value, beginning of period .................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
--------- --------- --------- --------- ---------
Income from investment operations:
Net investment income+ ............................... 0.042 0.047 0.032 0.014 0.010
--------- --------- --------- --------- ---------
Less distributions:
Dividends from net investment income ................. (0.042) (0.047) (0.032) (0.014) (0.010)
--------- --------- --------- --------- ---------
Net asset value, end of period .......................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
========= ========= ========= ========= =========
Total return ............................................ 4.30% 4.80% 3.25% 1.41% 0.96%
Ratios/supplemental data
Net assets, end of period (in millions) .............. $ 808 $ 685 $ 429 $ 354 $ 263
Ratio of expenses to average net assets .............. 0.43% 0.44% 0.45% 0.27% 0.11%
Ratio of net investment income to
average net assets ................................. 4.18% 4.72% 3.25% 1.42% 0.96%
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%
Ratio of net investment income to
average net assets ................................. ++ ++ ++ 1.24% 0.62%
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%#
SERVICE SHARES
---------------------------------------------------------------------
Year Ended March 31,
---------------------------------------------------------------------
2008 2007 2006 2005 2004
--------- --------- --------- --------- ---------
Net asset value, beginning of period .................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
--------- --------- --------- --------- ---------
Income from investment operations:
Net investment income+ ............................... 0.040 0.045 0.030 0.012 0.007
--------- --------- --------- --------- ---------
Less distributions:
Dividends from net investment income ................. (0.040) (0.045) (0.030) (0.012) (0.007)
--------- --------- --------- --------- ---------
Net asset value, end of period .......................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
========= ========= ========= ========= =========
Total return ............................................ 4.04% 4.54% 3.00% 1.16% 0.71%
Ratios/supplemental data
Net assets, end of period (in millions) .............. $ 1,099 $ 1,079 $ 887 $ 578 $ 575
Ratio of expenses to average net assets .............. 0.68% 0.69% 0.70% 0.52% 0.36%
Ratio of net investment income to
average net assets ................................. 3.93% 4.46% 3.02% 1.16% 0.71%
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%
Ratio of net investment income to
average net assets ................................. ++ ++ ++ 0.98% 0.36%
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%#
- ----------
+ 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 Vice Chair Vice Chair and Chief Executive Officer of Aquila 12 ICI Mutual Insurance
New York, NY of the Board Management Corporation, Founder of the Aquila Group of Company.
(02/25/58) of Trustees Funds and parent of Aquila Investment Management LLC,
since 2003, Administrator since 2004, President and Chief Operating
President Officer since 1997, a Director since 1984, Secretary
since 1998 since 1986 and previously its Executive Vice President,
and Trustee Senior Vice President or Vice President, 1986-1997; Chief
since 2004 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 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
(a trade organization for the U.S. fund industry
dedicated to protecting shareholder interests and
educating the public about investing) and head of its
Small Funds Committee since 2004; active in charitable
and volunteer organizations.
NON-INTERESTED TRUSTEES
Theodore T. Mason Chair of Executive Director, East Wind Power Partners Ltd. since 8 Trustee, Premier VIT.
New York, NY the Board 1994 and Louisiana Power Partners, 1999-2003; Treasurer,
(11/24/35) of Trustees Fort Schuyler Maritime Alumni Association, Inc.,
since 2004 successor to Alumni Association of SUNY Maritime College,
and Trustee since 2004 (President, 2002-2003, First Vice President,
since 1984 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 Fort Schuyler Maritime
Foundation, Inc., successor to 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 President, Courtney Associates, Inc., a venture 5 Chairman of the Board
Sewickley, PA since 1984 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 President, Waste Management of Hawaii, Inc. and Corporate 4 Trustee, Pacific
Honolulu, HI since 1993 Vice President - Hawaii Area for Waste Management, Inc., Capital Funds(R),
(04/05/36) 2001-2005; Trustee, The King William Charles Lunalilo which includes 12
Trust Estate since 2001; President and Chief Executive bond and stock funds;
Officer, The Chamber of Commerce of Hawaii, 1996-2001; First Insurance Co.
Director PBS - Hawaii Foundation since 1998; Regent, of Hawaii, Ltd.,
Chaminade University of Honolulu since 1991; Trustee, the Lanihau Properties,
Nature Conservancy of Hawaii since 1998; Trustee, Child Ltd., The Westye
and Family Service since 2005; Director, The East West Group - West
Center Foundation since 2006; St. Louis School since (Hawaii), Inc., Heald
2007; and a director of other corporate and community Education LLC.
organizations.
Russell K. Okata Trustee Executive Director, Hawaii Government Employees 5 Trustee, Pacific
Honolulu, HI since 1993 Association AFSCME Local 152, AFL-CIO 1981-2007; Capital Funds(R),
(03/22/44) International Vice President, American Federation of which includes 12
State, County and Municipal Employees, AFL-CIO 1981-2007; bond and stock funds;
director of various civic and charitable organizations. Chairman, Royal State
Group (insurance).
Douglas Philpotts Trustee Retired; formerly director, Chairman of the Board and 4 Trustee, Pacific
Honolulu, HI since 1992 President of Hawaiian Trust Company, Limited, a Capital Funds(R),
(11/21/31) predecessor of The Asset Management Group of Bank of which includes 12
Hawaii; present or former director of various bond and stock funds.
Hawaii-based civic and charitable organizations.
Oswald K. Stender Trustee Director, Hawaiian Electric Industries, Inc., a public 4 Trustee, Pacific
Honolulu, HI since 1993 utility holding company, 1993-2004; trustee, the Bernice Capital Funds(R),
(10/08/31) Pauahi Bishop Estate 1990-1999; trustee, Office of which includes 12
Hawaiian Affairs and a member or trustee of several bond and stock funds;
community organizations. director, Grace
Pacific Corporation,
an asphalt 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 and Founder and Chairman of the Board, Aquila Management N/A N/A
New York, NY Chairman Corporation, the sponsoring organization and parent of
(05/12/29) Emeritus since the Manager or Administrator and/or Adviser or
2004, Trustee, Sub-Adviser to each fund of the Aquila Group of Funds;
1984-2004, and Chairman of the Manager or Administrator and/or Adviser
Chairman of or Sub-Adviser to each since 2004; Founder and Chairman
the Board Emeritus of each fund in the Aquila Group of Funds;
of Trustees, previously Chairman and a Trustee of each fund in the
1984-2003 Aquila Group of Funds since its establishment until 2004
or 2005; Director of the Distributor since 1981 and
formerly Vice President or Secretary, 1981-1998; Trustee
Emeritus, Brown University and the Hopkins School; active
in university, school and charitable organizations.
OFFICERS
Charles E. Childs, III Executive Executive Vice President of all funds in the Aquila Group N/A N/A
New York, NY Vice President of Funds and the Administrator and the Administrator's
(04/01/57) since 2003 parent since 2003; formerly Senior Vice President,
corporate development, Vice President, Assistant Vice
President and Associate of the Administrator's parent
since 1987; Senior Vice President, Vice President or
Assistant Vice President of the Aquila Money-Market
Funds, 1988-2003.
Sherri Foster Vice President Senior Vice President, Hawaiian Tax-Free Trust since 1993 N/A N/A
Lahaina, HI since 1997 and formerly Vice President or Assistant Vice President;
(07/27/50) 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 Assistant Secretary of the Aquila Group of Funds since N/A N/A
New York, NY since 1990 and 1995 and Vice President of the three Aquila Money-Market
(12/17/39) Assistant Funds since 1990; Vice President of the Administrator or
Secretary its predecessor and current parent since 1990.
since 1995
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 Chief Compliance Officer of the Trust and each of the N/A N/A
New York, NY Compliance other funds in the Aquila Group of Funds, the
(08/23/40) Officer since Administrator and the Distributor since 2004, Compliance
2004 and Officer of the Administrator or its predecessor and
Assistant current parent 1998-2004; Assistant Secretary of the
Secretary Aquila Group of Funds since 2000.
since 2000
Joseph P. DiMaggio Chief Chief Financial Officer of the Aquila Group of Funds N/A N/A
New York, NY Financial since 2003 and Treasurer since 2000.
(11/06/56) Officer since
2003 and
Treasurer
since 2000
Edward M. W. Hines Secretary Shareholder of Butzel Long, a professional corporation, N/A N/A
New York, NY since 1984 counsel to the Trust, since 2007; Partner of Hollyer
(12/16/39) Brady Barrett & Hines LLP, its predecessor as counsel,
1989-2007; Secretary of the Aquila Group of Funds.
Lori A. Vindigni Assistant Assistant Treasurer of the Aquila Group of Funds since N/A N/A
New York, NY Treasurer 2000; Assistant Vice President of the Administrator or
(11/02/66) since 2000 its predecessor and current parent since 1998; Fund
Accountant for the Aquila Group of Funds, 1995-1998.
- ----------
(1) The Trust's Statement of Additional Information includes additional
information about the Trustees and is available, without charge, upon request by
calling 800-437-1020 (toll free) or by visiting the EDGAR Database at the SEC's
internet site at www.sec.gov.
(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(R) of Cash Assets Trust, 380 Madison Avenue, Suite 2300, New York, NY
10017.
(4) Because the Trust does not generally 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. Ms. Herrmann is the daughter of Lacy B. Herrmann,
the Founder and Chairman Emeritus of the Trust.
(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."
(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,
2007 and held for the six months ended March 31, 2008.
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, 2008
Beginning Ending Expenses
Actual Account Account Paid During
Total Return(1) Value Value the Period(2)
- --------------------------------------------------------------------------------
CASH FUND
Original Shares 1.91% $1,000.00 $1,019.10 $2.83
Service Shares 1.79% $1,000.00 $1,017.90 $4.09
- --------------------------------------------------------------------------------
TAX-FREE FUND
Original Shares 1.28% $1,000.00 $1,012.80 $2.37
Service Shares 1.15% $1,000.00 $1,011.50 $3.63
- --------------------------------------------------------------------------------
GOVERNMENT FUND
Original Shares 1.84% $1,000.00 $1,018.40 $2.17
Service Chares 1.71% $1,000.00 $1,017.10 $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 0.56% 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 MARCH 31, 2008
Hypothetical
Annualized Beginning Ending Expenses
Total Account Account Paid During
Return Value Value the Period
- --------------------------------------------------------------------------------
CASH FUND
Original Shares 5.00% $1,000.00 $1,022.20 $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).
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FEDERAL TAX STATUS OF DISTRIBUTIONS (UNAUDITED)
This information is presented in order to comply with a requirement of the
Internal Revenue Code. NO CURRENT ACTION ON THE PART OF SHAREHOLDERS IS
REQUIRED.
For the fiscal year ended March 31, 2008, $7,290,811 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, 2008, shareholders were mailed the appropriate tax
form(s) which contained information on the status of distributions paid for the
2007 CALENDAR YEAR.
- --------------------------------------------------------------------------------
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INFORMATION AVAILABLE (UNAUDITED)
Much of the information that the funds in the Aquila Group of Funds
produce is automatically sent to you and all other shareholders. Specifically,
you are routinely sent 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.
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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.
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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 (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 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
(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 Funds 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, 2008 (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
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
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 $13,000 in 2006 and $13,000 in 2007.
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
$1,500 and $1,500 in 2006 and 2007, respectively, for return preparation
and tax compliance.
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
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Vice Chair, President and Trustee
June 5, 2008
By: /s/ Joseph P. DiMaggio
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Chief Financial Officer and Treasurer
June 5, 2008
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
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Diana P. Herrmann
Vice Chair, President and Trustee
June 5, 2008
By: /s/ Joseph P. DiMaggio
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Joseph P. DiMaggio
Chief Financial Officer and Treasurer
June 5, 2008
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.